ESPN Bet’s One-Year Performance Review and Future Outlook

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00:00I mean, what do you know?

00:03It's already been a year since this big transition from Penn Gaming, DraftKings, everything else

00:09to move over to ESPN BET.

00:12It's been one year since this has happened.

00:14And I know that you had a chance to dive a little bit deeper into what we've seen over

00:17the past year.

00:18I know it was a slow start for ESPN BET.

00:20Do you personally feel like anything has picked up in terms of momentum for them?

00:25Yeah, it's an interesting question, Craig.

00:29It was a very unique year for ESPN BET, Penn Entertainment moving on from Barstool.

00:35In some sense, things have picked up for them in terms of reaching their long-term vision,

00:41which was talked about at the conference this week, where ESPN always, every year, talks

00:45about their new technology advancements, new things going in in the background they're

00:50excited about.

00:51And in a lot of other senses, things have really slowed down in terms of the actual

00:56numbers you look at every month.

00:59The things investors really care about.

01:01This year, sports betting wasn't really a big talk at the conference, although Disney

01:07Chair Bob Iger and ESPN Chair Jimmy Pataro did talk about kind of where it fits in, in

01:14terms of their new upcoming direct-to-consumer subscription service, which has been long

01:19rumored.

01:20It's nicknamed Flagship.

01:21It's essentially this all-in-one personalized experience where you watch SportsCenter, you're

01:26going to see the things you want to see as a fan on SportsCenter, the things you want

01:30to see as a fantasy player, you log into the ESPN app, you see these things that are personalized

01:35to you.

01:36They did mention where sports betting kind of fits in, in that vision.

01:39And I think that gets to the point of reaching kind of their long-term goals of having this

01:44all-in-one, seamlessly integrated experience.

01:47I did catch up with Mike Morrison, who is the Vice President of ESPN Betting and Fantasy,

01:53and he talked more kind of on the side about this all-in-one sort of super app where you

01:59go into the ESPN Bet app that's going to be linked with all of the ESPN articles you read,

02:05with all of the streaming games that you want to see, kind of all in one place, this big

02:09all-in-one ecosystem, which Penn was really excited about when they moved on from Barstool

02:14and took on ESPN.

02:16It wasn't essentially just trading one partner, one marketing brand for another.

02:20It was really being able to unlock all of ESPN's kind of core assets.

02:24But to get back to your question, we've seen Penn's market share really slip ever since

02:30they launched ESPN Bet in 17 states.

02:33Last November, they had pretty big gains originally.

02:37A lot of that came from people downloading the app to get the free sign-up offers and

02:41free sign-up bonuses.

02:43We've really seen that slip in recent months, recent weeks, especially in the football season.

02:48Our Eric Ramsey does a great job breaking down all the data.

02:51And you see they're kind of only at 2% market share right now, which is a big far cry from

02:56their long-term goal of 20%.

02:58But again, these people at ESPN have reiterated some of the things that they've done recently,

03:03like connecting the brands, having this account linking between ESPN and ESPN Bet, will eventually

03:09unlock this vision where everything's all seamlessly integrated together.

03:13Now it's still a far, far way away from that.

03:16We're seeing sort of incremental steps to get there.

03:19And you have to wonder as Penn is facing a lot of pressures as a company from their investors

03:24as well, if we're going to get to that, have they bought themselves kind of enough time

03:28while the immediate stuff kind of slips as well?

03:31So more of this long-term kind of big vision trying to play out.

03:35But essentially right now, you've seen them kind of not match up with what the other apps

03:39are trying to do.

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