Why media-branded sportsbooks keep flopping: ESPN Bet joins gambling graveyard

The sports betting landscape is pocked with a slew of high-profile branding failures:

• Penn Entertainment announced Thursday that ESPN Bet is coming to an end after an underwhelming two years.
• Barstool Sportsbook also failed to gain enough traction to justify the branding deal. It gave way to ESPN Bet in 2023.
• SI Sportsbook, Fox Bet and MaximBet all flamed out despite heavy promotion and ties to popular brands.

The big picture: DraftKings and FanDuel's fantasy-sports roots gave them a built-in following and massive head start in U.S. sports gambling.

• "By the time ESPN Bet launched in 2023, we were already five years into legal U.S. sports betting," gambling industry consultant Dustin Gouker tells Axios. "FanDuel and DraftKings had entrenched themselves as the dominant forces."

The impact: When Penn — which owns about two dozen casinos — struck the branding deal with Disney in 2023 and renamed its sportsbook from Barstool to ESPN Bet, the goal was to nab 10% to 20% U.S. market share within three years.

• But today the app has only about 3%, making it the sixth most popular sportsbook in the U.S., according to Gouker.

Between the lines: Sports media organizations may have overestimated how much their on-air commentators would encourage viewers and readers to wager on games via their branded sportsbooks, according to gambling experts.

• "I do think that authenticity is a huge part of who's talking about sports betting and whether or not people are going to take what they're hearing from that person and actually bet on stuff," Covers.com sports betting reporter Geoff Zochodne said on the "Pat Mayo Experience" podcast.
• "It's a big leap to get people to be like, 'Yes, I trust you now with betting the same way I trusted you with talking about the X's and O's of a football game," Zochodne added.

Zoom in: Penn had been paying Disney's ESPN $150 million per year for the rights to its brand. ESPN, in turn, agreed to actively promote the sportsbook. But Penn apparently overestimated its ability to convert ESPN viewers into gamblers on its platform.

• "Expecting ESPN viewers to switch allegiance and some of their sports betting spend from an existing sportsbook to ESPN Bet was arguably a tough lift," Gouker tells Axios. "It was even tougher because there was nothing special about what bettors were getting from ESPN Bet."

Zoom out: It was a similar story at Barstool Sportsbook, SI Sportsbook, Fox Bet and MaximBet despite significant investments in customer acquisition and marketing.

What's next: ESPN struck a new partnership with DraftKings Thursday, saying it will highlight the sportsbook's odds and promote DraftKings services "with a full rollout expected in 2026."

• But DraftKings won't change its name.