ESPN Bet appears to be bringing more women into sports betting
Penn Entertainment's (NASDAQ: PENN ) recently launched ESPN Bet mobile sports betting app could expand the market by attracting more casual bettors and women into the world of sports betting.
That's the view of Bank of America analyst Shaun Kelley, who joined a growing number of analysts in praising ESPN Bet's strong start in a recent note to clients. The app launched in 17 states on November 14 and was downloaded 1 million times in its first week. It appears the venerable ESPN brand is paying off by bringing new bettors to Penn State.
We believe ESPN Bet can grow the market with more casual players and female bettors than other sportsbooks," Kelly noted.
Some research suggests this could be good news for the industry as a whole, as sportsbooks in the U.S. struggle to attract female bettors. The opposite is true across Europe and elsewhere, with data showing women are keen on sports betting and often do so on women's games.
ESPN MAY BE STEALING FROM COMPETITORS
The app's market share exceeded expectations in several states where ESPN Bet operates and has already provided data for November.
Kelly noted that ESPN Bet's November market share gains came at the expense of BetMGM, Caesars Sportsbook and DraftKings (NASDAQ: DKNG), while FanDuel, the largest online sportsbook, gained 1% market share, " We believe that” is driven by the NBA’s increased seasonality and marketing efforts. "
While ESPN Bet and Fanatics have deep financial resources and strong brand recognition, some analysts say increasing competition has not yet put pressure on DraftKings. DraftKings' customer churn and spending patterns were estimated to be normal in November and the first half of the month in states where the company competes with ESPN Bet.
Bank of America's Kelly added that the research firm "still believes strongly in DraftKings' growth story despite increasing competition."
ESPN Betting Ad Spend Review
Taking lessons from the 2020 and 2021 crazes, analysts and investors are paying closer attention to how much sportsbooks spend on advertising as a way to acquire customers. ESPN Bet critics point to generous promotions as the reason for the app's rapid launch. But Kelly sees things differently.
The Bears are concerned that ESPN Bet is gaining market share through promotions. But in Maryland and Kansas, ESPN Bet's promotion is 35% off handles, which is consistent with Kentucky's launch offer. However, given strong initial adoption and strong absolute ad revenue, we are raising our Q4 loss forecast to $185 million from $130 million. ” the analyst concluded.
The loss estimate exceeded Penn's forecast of $100 million to $150 million. Using that as a baseline, it could take ESPN Bet until 2025 to reach profitability.
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Source: www.casino.org
