May 25, 2024

ESPN Bet is off to a bad start

How is ESPN Bet doing so far? To quote the Bubble Boy, “Not too good.”

Before going any farther with this, here’s a disclaimer. NBC has a gambling deal with DraftKings; PFT the online operation has had no gambling deal, ever.

We’ve had opportunities. We’ve passed, for various reasons. Among other things, I’ve got lingering concerns that too many people will view sports betting as a way to make money and not what it truly is — a form of entertainment that entails, for the vast majority of those who do it, a high degree of certainty that you will lose money.

And that’s fine. People lose (spend) discretionary income in all sorts of ways. But it’s a reliable way to make money only for the house.

Except for Penn National, that is.

After its deal with Barstool went belly up, Penn pivoted to ESPN Bet with a deal that pays $1.5 billion over 10 years, along with the ability to buy up to 31.8 million shares of Penn National stock. Now, with the first full quarter of the new relationship completed, Penn National missed its earnings estimate — due to ESPN Bet.

Via Sports Business Journal, ESPN Bet was a “drag on the bottom line” of Penn National, with a loss of $196 million. Revenue fell 3.6 percent from the first quarter of 2023, when it was Penn and Barstool.

“While we are pleased with the early ESPN BET adoption and engagement results, our focus heading into this football season will be on enhancing our product offerings,” Penn National president Jay Snowden said, in an effort to fill the more-than-half-empty glass.

It remains to be seen what that means for the ESPN viewer/consumer. As Penn tries to goose earnings, it likely will want ESPN to sell more gambling products to its audience. Again, that’s fine — as long as everyone is on the same page about how gambling works. It can be fun, when done responsibly. And you are likely to lose more than you win, over time.

It’s not a way to pay bills. It’s not a way to get rich. Sure, there are the rare few who have cracked the code (until they haven’t). For most people, gambling remains a tax on our own delusion that there’s a way to get rich quick when there most definitely is not. Ads that directly or indirectly push those buttons add to the problem, regardless of how many times they put “please gamble responsibly” in fine print.

Sportsbooks aren’t a form of public assistance. They’re there to make money. They make money by you losing it. It’s a simple truth. Anyone who bets needs to understand that. Anyone who doesn’t understand that shouldn’t bet, or they’ll end up with a gambling problem.

And any sportsbook that isn’t making money has a very different kind of gambling problem. It might be as simple as DraftKings and FanDuel already becoming the Coke and Pepsi of sports betting, and the best anyone else can ever be is RC.