ESPN Bet losing millions -- how can that be?

How has ESPN Bet performed thus far? "Not too good," to borrow the Bubble Boy's words.

Here is a disclaimer before we proceed further. DraftKings and NBC have a gaming agreement; PFT, the internet company, has never had such an agreement.

We've been presented with chances. For a variety of reasons, we've moved on. Among other things, I'm still worried that too many people will see sports betting as a means of generating income rather than for what it is: a kind of pleasure that, for the great majority of participants, carries a substantial degree of risk of financial loss.

That's okay too. Individuals can spend or lose discretionary income in a variety of ways. However, it's a dependable method of earning money, with the exception of a select few advantage players, mostly for the side making the lines.

That is, excluding Penn National.

Following the collapse of its agreement with Barstool Sports, Penn turned to ESPN Bet, where it signed a ten-year deal worth $1.5 billion that included the option to purchase up to 31.8 million shares of Penn National stock. Now that the first full quarter of the new partnership has concluded, ESPN Bet is the reason Penn National's earnings estimate was missed.

ESPN Bet lost $196 million, according to Sports Business Journal, making it a "drag on the bottom line" for Penn National. Revenue decreased by 3.6 percent compared to Penn and Barstool's first quarter of 2023.

In an attempt to fill the more-than-half-empty glass, Penn National president Jay Snowden stated, "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."

What that implies for ESPN viewers and customers is still to be determined. Penn will probably want ESPN to push additional gaming goods to its audience as it looks to boost profits. (Recently, ESPN sent out an email offering a $1,000 extra bet in the event that you lose your initial wager, known as a "first bet reset."). Once more, that's acceptable as long as everyone is aware of how gaming operates. If done properly, it can be enjoyable. Additionally, over time, you probably will lose more than you win.

It isn't a method of bill payment. It won't make you wealthy. Granted, a very select few people have managed to crack the code. Gambling is still, for most people, a tax on our own illusion that there is a quick way to get rich when there most surely isn't. No matter how many times they include the phrase "please gamble responsibly" in the fine print, advertisements that either directly or indirectly push those buttons exacerbate the issue.

Sportsbooks are not a part of the government. Their goal is to generate revenue. They profit when you lose it. It's an obvious fact. That is something that every bettor needs to know. If someone doesn't grasp it, they shouldn't gamble and risk developing a gambling problem.

And a totally different kind of gambling problem exists in any sportsbook that isn't profitable. Maybe all it takes is for DraftKings and FanDuel to already establish themselves as the Coca-Cola and Pepsi of sports betting, with the mediocrity of Royal Crown Cola being the greatest there is left to be.

Source:

“ESPN Bet is off to a bad start” , Mike Florio, NBCsports.com, May 5, 2024.