ESPN Bet To Launch In New York After $25M License Approved
Penn Entertainment's new branded sports betting platform, ESPN Bet, is preparing to launch in New York with regulatory approval from the New York State Gaming Commission (NYSGC). The approval follows Penn's $25 million acquisition of a sports betting license from Win Interactive Holdings, which had been vacant after Win closed its Win Bet operation in New York State. With the move, ESPN Bet will join the highly competitive New York sports betting market.
The approval will allow Penn Entertainment to proceed with the ESPN Bet launch in Empire State. Vice President Chris Rogers, Penn's chief strategy and legal officer, told the NYSGC hearing that while some technical preparations remain, he plans to prepare for a soft launch in the coming days. "We'll be ready to launch in a few days. Maybe we can have a soft launch before the weekend or we can get approval here today," Rogers noted.
ESPN Betting Targets New York Market Expansion
As part of Penn's strategy, the launch of ESPN Bet aims to attract new viewers in the New York betting environment. Since its national debut in November 2023, ESPN Bet has been made available in 17 states, including Arizona, Colorado, Michigan and New Jersey. Rogers stressed at the hearing that ESPN Bet is expected to bring new bettors to the market instead of cannibalizing existing players.
"We attract different kinds of betters," Rogers says. "We expect to grow the market. I think we've seen control of the market [which we're launching] go up as people try new platforms." The company expects the New York launch to follow a similar trend of new betters testing the ESPN Bet platform, increasing the overall betting handle.
New York, one of the largest online sports betting markets in the U.S., is a significant opportunity for growth. Since New York State opened its online sports betting market in January 2022, operators have attracted around $49 billion in bets and generated more than $4.3 billion in total gaming revenue. Entering this market is especially essential for Penn and ESPN Bet, which aim to take advantage of the NFL season and other major sports events.
Raising concerns about college student marketing
The NYSGC hearing raised concerns about ESPN Bet's potential impact on college campuses, particularly with regard to ESPN brands" deep involvement in college sports. Rogers convinced the committee that Penn was taking responsibility seriously for not marketing to individuals or students underage.
It has been working to ensure that it does not target or affect individuals under the legal betting age, especially at events such as ESPN's College Game Day on college campuses. Penn's management has also said that while general marketing efforts may still be visible to younger viewers, it will focus on promoting the platform to those who are legally eligible to gamble.
Pen Entertainment Challenges and Financial Losses
Despite the excitement surrounding the ESPN Bet launch in New York, Penn Entertainment faces financial hurdles. The company's interactive division, including ESPN Bet, reported a $196 million adjusted EBITDA loss for the first quarter of 2023. Although it generated $277.7 million in revenue, the division struggled to offset costs and improve its financial position.
New York's high tax rate, set at 51%, is another challenge for Penn. CEO Jay Snowden acknowledged the challenges of the New York state economic model in his earnings call but remained optimistic: "We look forward to bringing ESPN Bet to the largest regulated online sports betting market in North America."
https://www.powerballsite.com/