PENN CEO: Market share will be “growing steadily” for ESPN Bet

PENN Entertainment CEO Jay Snowden has said ESPN Bet’s market share will be “growing steadily” as the operator plans for further product improvements and deeper ESPN integrations.

Speaking on an analyst call following the release of the firm’s Q4 results, Snowden was bullish on the future of ESPN Bet following its mid-November launch.

Despite quarterly losses for the Interactive arm landing at $338.8m and revenue reaching $31.5m, ESPN Bet reported several strong growth metrics in its early launch period.

Average monthly actives landed at 771,000 compared to 189,000 in Q3, while handle had risen by 289% by January compared to October 2023 prior to ESPN Bet’s launch.

The operator’s online sports betting market share by handle has been pegged at 7% in the early stages by analysts, with Snowden expecting to see this increase in the coming months.

The CEO said that by Q4 2024, ESPN Bet would see improved product and deeper integration with ESPN “really come together” before noting that when exiting 2024, the brand will have “real momentum” from a handle market share perspective.

Snowden did say market share could fluctuate between now and the start of the new NFL season in September, and that management wasn’t “super focused” on the metric for the time being.

When asked if a 7% handle market share could lead to the business being ultimately profitable, given the nine-figure quarterly losses for the online division in Q4, Snowden said a decline in promo spend would allow this to be the case.

ESPN Bet promo spend has tightened from 32.2% of handle in November to 2.8% in January. Launches in North Carolina and New York could see promo spend increase as ESPN Bet looks to achieve cut through.

Snowden said: “The opportunity, of course, is to close the gap of handle market share.

“We believe that if we can get 7% handle market share in early days with these things that we know are at the first inning or second inning of the game, we feel really good about where those are going to take us over the course of the next 12 months, 18 months, 24 months. So, we don’t anticipate that 7% is going to be as good as they get by any means.

“We think that the market share is going to be growing steadily as we continue to make product improvements and add more deeper integrations with ESPN.

“If we were to be at 7% a couple of years out, can we be profitable? The answer to that is yes.

“What we don’t know as we sit here today is how many more states will legalize from a sports betting and online gaming perspective. But you should feel as though 7% and above is a level that we could definitely generate a profit.”

Elsewhere, Snowden provided a brief update on the hunt for a new head of interactive after the New York-listed operator confirmed the upcoming departure of the Levy family earlier this year.

The Levys, who founded theScore, which was acquired by PENN, will depart by April, with PENN on the hunt for a new online boss to replace the outgoing Benjie Levy.

Snowden added: “We also started a quiet search in the fourth quarter, because we didn’t want this to get out in advance and create uncertainty, and we’re very far along in that process.

“We’re very close, and we’re very excited. The level of talent that we are considering is incredible.

“We feel good about the timeline with the Levys leaving in April that we should have something announced obviously before that, and we’re working to have this be a super seamless transition where the new head of interactive would be there at that time, maybe a little sooner, maybe a little after, but not have a gap in leadership.”

Image credit: PENN Entertainment