Disney, PENN Entertainment Launch Highly-Anticipated $2 Billion Project ESPN Bet

Disney and PENN Entertainment’s joint sports betting venture was cemented Tuesday with the launch of the new online betting platform ESPN Bet.

The brand-new sportsbook is available in 17 states and comes with web, online, and mobile sports betting apps. It will also combine the traditional sports coverage and media content of ESPN with up-to-the-minute betting odds and sports wagering.

PENN previously operated Barstool Sportsbook and sold it back to Barstool founder Dave Portnoy for just $1 to enter the market with Disney and ESPN. Their agreement will see PENN pay Disney $1.5 billion over 10 years with another $500 million in stock warrants.

There’s no doubt that legal sports betting is the new American craze.

Over $220 billion has been wagered since the federal court system deemed the practice legal in 2018, and now, the Worldwide Leader in Sports is giving PENN the largest platform in the sports world to put gambling in front of even more eyes.

ESPN had slowly grown into the world of sports betting even before its partnership with PENN. Announcers would read live betting odds during games to monitor how they’d evolved since the opening minutes, show hosts would share their favorite picks for a particular game, and sports betting companies would sponsor various show segments.

Now, ESPN will mix betting odds from ESPN Bet into its regular content. Take a quick look at an upcoming NFL or NBA game, and odds from ESPN Bet will be displayed near the bottom of the preview page.

ESPN Bet is live in all of the following states: Arizona, Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, New Jersey, Ohio, Pennsylvania, Tennessee, Virginia and West Virginia.

The company was able to launch with such a wide base because of PENN, which already received licensure in these states during its time as the operator of Barstool.

PENN will own and operate the sportsbook, while Disney and ESPN will use the annual payments to market the sportsbook across its multimedia channels. It also has the chance to integrate sports betting in a way other operators have not been able to thanks to the existence of its ESPN and ESPN Fantasy apps, among others.

Popular betting show Daily Wager will also be rebranded as ESPN Bet Live and will serve as a taste of what could be on the horizon.

Disney has long mulled an entry into the sports betting world. It was engaged in conversations over purchasing DraftKings (which it already owned a 5% stake in) but opted to stay out of the sports betting world. It also sold its stake in the company for a $90 million profit last quarter.

Former Disney CEO Bob Chapek said in 2022 that the company wanted to enter sports betting but not as a sole proprietor. Instead, they wanted the help of a partner (like PENN).

“We’re never going to be a book, that’s never in the cards for the Walt Disney Company,” Chapek said during an interview with CNBC. “But at the same time, to be able to partner with a well-respected third party can do that for us.”

Current CEO Bob Iger confirmed that Disney had spoken to multiple parties before deciding to work with Penn.

“We’ve been in discussions with a number of entities over a fairly long period of time. It’s something that we’ve wanted to accomplish, obviously, because we believe there’s an opportunity here to significantly grow engagement with ESPN consumers, particularly young consumers,” Iger said.

The goal for ESPN Bet is to achieve a 10% market share within the first three years of operation. Top operators FanDuel and DraftKings, and to a lesser extent, BetMGM and Caesars, recently increased their dominance over their smaller rivals within sports betting. But if there’s a company with the infrastructure and capital to put up a good fight, it’s Disney.

Customers will be able to link their ESPN and ESPN Bet accounts to create a more immersive experience. The company will also offer promo codes and other deals for returning customers.