Following its split with Barstool and new partnership with ESPN last summer, PENN Entertainment had high hopes of becoming a leading sports betting operator. While the retail segment of its sports betting business is thriving in Michigan, the online segment has yet to gain similar traction.
PENN Entertainment recently celebrated the successful opening of its new ESPN BET retail sportsbook, which launched just before the NFL Draft last month. April’s figures reveal a strong performance for the retail sportsbook, bolstered by Detroit hosting the NFL Draft.
However, the ESPN BET online sportsbook in Michigan continues to lose ground, as evidenced by April’s revenue figures.
Retail success doesn’t translate to online performance
PENN Entertainment hosted numerous events at Hollywood Casino at Greektown during the NFL Draft, contributing to the successful launch of the first ESPN BET retail sportsbook. The events featured notable personalities conducting podcasts, radio, and TV shows, including:
– First Draft podcast with Field Yates, Domonique Foxworth, Mina Kimes, and Matt Miller
– Unsportsmanlike with Evan Cohen, Chris Canty, and Michelle Smallmon
– Greeny Show with Mike Greenberg
– ESPN BET Live with various hosts
Hollywood Casino at Greektown led in handle among Detroit’s retail sportsbooks in April:
– Hollywood Casino at Greektown: $7.5 million
– MGM Grand Detroit: $3.9 million
– MotorCity Casino: $3.8 million
Despite the absence of major betting events like March Madness and NFL games in April, Hollywood Casino at Greektown delivered impressive results, generating $31.6 million in handle for 2024 so far, leading Detroit’s casinos.
Online struggles continue for ESPN BET
The success of the retail segment hasn’t translated to the online sportsbook. ESPN BET has been losing market share in Michigan’s online sports betting market each month in 2024:
– January: 10.2%
– February: 8.6%
– March: 8.1%
– April: 7.9%
ESPN BET’s online sportsbook has consistently ranked fourth, behind FanDuel, DraftKings, and BetMGM. During PENN’s Q1 2024 earnings call, CEO Jay Snowden stated his goal is to achieve between 10% and 20% market share. However, the current figures are far from meeting this target, which is crucial for PENN’s overall profitability.
In April, retail wagering accounted for just 23% of ESPN BET’s total sports betting handle in Michigan. The majority, over $25 million (77%), of the $32.6 million total handle came from online betting, highlighting the importance of the online segment.
Reasons behind ESPN BET’s online struggles
Snowden identified several factors contributing to ESPN BET’s slow start and declining online market share in Michigan. He noted that the hold percentage, or the amount of money retained from bets, has been a challenge but is improving:
– January: 0.9%
– February: 5.9%
– March: 7.8%
– April: 8.4%
Additionally, PENN has observed lower spending per user compared to the average. Snowden anticipates this will improve as users become more familiar with the app and sports betting, and as ESPN BET’s integration with ESPN becomes more seamless.
Snowden also mentioned that PENN has not fully leveraged its VIP bettors, which is crucial for sports betting success. The recent hiring of Chief Technology Officer Aaron LaBerge is expected to drive product improvements, including deeper integration with ESPN’s app and fantasy app, as well as enhanced home screen navigation and more competitive parlay and prop markets.
Future improvements and outlook
Snowden hinted at upcoming improvements that will start appearing at the beginning of the NFL season, with additional features rolling out through the football season and into 2025. These include integration with ESPN’s new direct-to-consumer streaming service, which could offer account linking and deeper platform integration.
As these enhancements are implemented in the coming quarters, it remains to be seen if they will help ESPN BET’s online sportsbook gain ground in Michigan.
