With ESPN Bet, Disney brokers a marriage between sports betting and the entertainment industry. ESPN Bet is scheduled to launch this fall. WITH THE DISNEY Bundle, you can have it all. Bored of Pixar? Watch the latest Marvel movie. Bored of Marvel? Check out a nature documentary on National Geographic. Bored of animals? Head over to ESPN and gorge on baseball. Still not satisfied? Have you considered gambling?
Earlier this month, ESPN, owned by Disney since 1995, announced the launch of an online betting brand—ESPN Bet. PENN Entertainment, which recently ended its association with controversial Barstool Sports owner Dave Portnoy, will pay ESPN $2 billion over 10 years to use the ESPN brand for the new betting service, set to launch in the fall. And the entertainment industry, in turn, will deepen its association with gambling.
Disney is leaving the bookmaking to third parties: PENN, not ESPN, will be handling the bets. Still, this move shouldn’t come as a surprise. Since May 2018, when the US Supreme Court overturned the Professional and Amateur Sports Protection Act and US states began to legalize sports betting, the House of Mouse has grown ever more entangled in the industry.
Disney CEO Bob Iger’s move here is a notable one. In 2023, Iger admitted that he “was probably on the more conservative side about [gambling] for a long time,” worried that any association would damage the company’s family-friendly values, but that—provided Disney wasn’t playing bookie—his opinion had shifted with public acceptance. “When billions of dollars are on the line, [Disney] apparently does not mind jumping into bed with a sports gambling platform,” says Darren Heitner, the founder of the sports law firm Heitner Legal.
This is the same Disney, remember, that prohibited casinos on its cruise ships and fought the expansion of gambling establishments in Florida. Yet, in the words of former Disney CEO Bob Chapek, ESPN’s marriage with sports betting has proven too “perfect” to miss. The Daily Wager, ESPN’s sports betting show, launched in 2019 and has been a ratings hit. DraftKings and FanDuel, PENN’s rivals with a 70 percent market share on sports betting in the US, advertise prominently on ESPN. “Sports betting has been baked into the ESPN experience for years,” says Chris Grove, CEO of American Affiliate, a sports betting investment portfolio. “This new deal ties the ESPN brand to betting in a deeper and more direct fashion, but it’s not a fundamental shift for Disney.”
“For ESPN, this is the next step in the sports betting process, and certainly what fans want from us. Sports betting has reached national interest, offers unique storytelling potential, and directly ties to higher levels of engagement,” says Mike Morrison, ESPN’s VP of sports betting. “This is going to be a big opportunity for everyone in sports, and we see the room for us to grow within it.”
The launch of ESPN Bet is tangled up in Disney’s long-term plan to uproot its sports business from the old world of cable TV into the not-so-new streaming era. (ESPN+, which launched in 2018 but is also losing subscribers, shows some live MLB and NHL games, but doesn’t yet include NBA and NFL, which are only available through an ESPN TV subscription.) In 2017, Bloomberg traced how ESPN, once a money-printing machine for Disney, had begun to post shrinking profits. These struggles were blamed on the rise of streaming and social media—the mass cord-cutting that continues to reshape the entertainment industry. At the same time, the cost of sports rights has shot up.
Today, ESPN is in around 70 million US households, 30 million less than 10 years ago, and Disney is exploring a sale of a stake in the company to, as Iger put it, help with “distribution or content.” Media insiders have speculated such a move could signal a potential ESPN spinoff from Disney.
As streaming giants, searching for profitability, cut costs, hike prices, and clamp down on password-sharing, ESPN Bet feels like a punt for a surer revenue stream. In America, 34 states have now legalized sports gambling, and Americans have wagered $245 billion since the 2018 Supreme Court decision. Sports book revenue in the US hit $7.5 billion in 2022, up 75 percent from the 2021 total of $4.29 billion.
“This is about new growth opportunities to expand ESPN’s brand and audience and increase fan engagement, especially as more states legalize sports betting,” says Morrison. “Sports betting has become endemic to the overall experience of the sports fan—and the ESPN Bet deal is in line with ESPN’s mission to serve them.”
In a recent earnings call, Iger argued that ESPN Bet will attract younger gamblers. ESPN’s foray into gambling has echoes of the UK’s Sky Bet, which is now a seamless part of match-day advertising—with ads often featuring the same cast of characters as the Sky Sports broadcasts they interrupt. In the UK, deregulation paved the way for sports gambling’s hegemony, but it was the adoption of smartphones that changed the game and made placing a bet as easy as posting on social media.
The same story is now playing out in the US. The frictionless, app-facilitated portals between entertainment and gambling—of which ESPN Bet will soon be a part—have, in turn, attracted more and more young gamblers, says Lia Nower, the director of the Center for Gambling Studies at Rutgers University. “Sports betting is really appealing to a younger demographic, to kids, to teens,” she says. The same is true of in-play betting—again made all-too-easy by smartphones—which is more associated with problem gambling. “The younger ones are much more likely to gamble in-game, which is more dangerous because you don’t have that cool head,” Nower adds.
Team loyalty, peer pressure, and thrill-seeking combine to encourage fans to bet impulsively and recklessly, Nower says. Player data in New Jersey suggests an increasing trend in the involvement of younger gamblers; across the United States, the National Council for Problem Gambling found a 50 percent increase in problem gambling risk among adults between 2018 and 2021. And the US, unlike the UK, has few preventive measures in place, placing an onus on addicts to self-exclude.
In recent years, researchers have warned of the societal impacts of the rampant monetization tactics used across sports and video games. American sports are no different: Data-driven and advert-saturated, with long and frequent breaks, they have proven perfect fodder for in-play gambling. At one level, then, the smooshing of “ESPN” and “Bet” is an inevitable next step in the rapidly expanding sports betting industry. Yet at another, Nower says, ESPN Bet gives ESPN’s—and by extension Disney’s—“seal of approval” to the notion that sports and gambling are inextricable. “That’s going to have some long-term implications,” she says.
https://www.wired.com/story/espn-bet-future-disney/