There’s no doubt PENN Entertainment’s launch of ESPN Bet is going to change the landscape of the Pennsylvania sports betting market. However, ESPN Bet is going to have a huge impact on the online casino side, too.
In fact, according to the newsletter Earnings + More, analysts at Wells Fargo believe ESPN Bet’s “key launch focus” will be Pennsylvania, Michigan and New Jersey — the country’s biggest online casino markets.
Pennsylvania is off to a head start with Hollywood Casino Online PA because it already features a standalone app and has a strong retail presence. Although, with Hollywood’s platform integrated with ESPN Bet, a successful sportsbook launch could impact its success in the Pennsylvania online casino marketplace even more.
PENN Entertainment’s updated plans for an ESPN Bet launch
It’s safe to say that the better ESPN Bet Pennsylvania does, the more that success will also translate to the online casino for PENN Entertainment.
PENN and ESPN signed a 10-year deal, but have the right to cut ties after three years if the two sides fall short on the market share threshold agreement.
“We’re not doing this deal to be 4% or 5% market share players,” PENN Entertainment CEO Jay Snowden said last month during a Q2 2023 earnings call. “That’s not going to be acceptable for us. It’s not going to be acceptable for ESPN. And so, you should assume if those are the ranges you’re in, that’s not going to work out long term.”
Earnings + More learned that PENN Entertainment is shooting for “high double-digit level” market share, according to Wells Fargo analysts.
How ESPN Bet debut can improve PA online casino performance
During DraftKings’ Q2 2023 earnings call, CEO Jason Robins often boasted about his company’s cross-sell initiatives. DraftKings reported one of its best quarters in Q2 2023, and Robins said customer retention has been better than expected. A lot of that can be attributed to DraftKings’ cross-sell strategies.
“It’s kind of like this halo effect of when you retain better and cross more people into the NBA on the sports side, that then has some spill-over effect on iGaming,” Robins said last month. “More active players on the online sports betting platform cross-sell into active players on the iGaming products. So that’s really, I think, what I would attribute to Q2.”
Since Hollywood Casino PA is going to be integrated within ESPN Bet, PENN Entertainment’s cross-sell strategies must be effective to reach its goals.
Wells Fargo analysts said ESPN Bet’s success will “come down to its product, which management is confident can be competitive.” In PENN Entertainment’s presentation to investors, the company announced it is planning for a 20% sports betting share and 16% online casino share.
A great product will retain customers, and therefore “spill over” onto Hollywood’s online platform right from ESPN Bet.
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Hollywood isn’t foreign to Pennsylvania online casino players
As mentioned earlier, Pennsylvania is the only state where Hollywood Casino PA has a standalone online casino app.
Pennsylvania players are already familiar with the Hollywood brand, and that’s not to mention the four retail locations the company offers.
In a bit of a surprise, PENN Entertainment is electing to expand on its Hollywood name and not launch an ESPN-branded online casino.
Hollywood’s online casino is partnered with its land-based brand, which has generated a state-high $557.4 million in revenue through August. The Pennsylvania Gaming Control Board (PGCB) does not break down revenue by operator, so it’s difficult to tell the exact figures Hollywood has posted. Though the license is made up of BetMGM Casino PA, DraftKings, Barstool and PointsBet, Hollywood must be pulling its weight in order to integrate with ESPN Bet.
It helps that Pennsylvania players are already familiar with Hollywood’s online platform. The launch of ESPN could push the online casino brand even further.
