The media and entertainment giant Walt Disney is making a big move into the world of online sports betting by partnering with casino operator Penn National Gaming to launch a new betting platform called ESPN Bet. This deal is not without risks.
Walt Disney Enters Online Betting Industry Through ESPN
The venture comes as Disney looks to revitalize its flagship sports network ESPN, which has struggled with declining subscribers and rising content costs in recent years. Under the terms of the deal announced this week, Penn National will pay ESPN $1.5 billion upfront and offer approximately $500 million in stock warrants in exchange for using the ESPN brand name and promotional services.
ESPN has flirted with the sports betting industry since 2016, when it purchased a stake in sports data company BamTech to integrate betting data and analytics into its programming and ESPN+. But this new deal represents a full-fledged entry into facilitating actual wagers, allowing ESPN audiences to both view sports content and bet on games within ESPN digital products and services.
“Our focus continues to be serving sports fans and delivering great sports betting experiences,” said ESPN Chairman Jimmy Pitaro. “Together, we will now expand the reach of ESPN’s unparalleled sports brand and content to tap into the fast-growing interactive sports wagering landscape.”
The goal appears to be using ESPN’s brand equity and massive audience to capture market share and battle rival sports betting platforms like DraftKings. Penn National will rebrand its existing sportsbook under the ESPN name this fall in each of the 16 states where it holds sports betting licenses.
However, the deal is not without risks. Penn National is essentially abandoning its own $500 million investment in Barstool Sports’ betting brand after just three years in order to hitch its wagon to ESPN. And if certain market share thresholds aren’t met, ESPN can walk away entirely after three years.
But Penn seems willing to gamble on the power of ESPN to attract bettors, eyeing the network’s reach into millions of American households. With nearly 50 million paid subscribers, fantasy leagues, sports talk radio shows, and more, ESPN dominates the sports media landscape. Now it hopes to parlay that influence into a leading position in the expanding US sports betting industry as well.
Ryan is a savvy casino player from Toronto. In 2021, he founded Clever Casino to teach others smarter gambling.
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