Chicago sports marketing expert Larry Mann believes ESPN Bet replacing the Barstool Sportsbook brand in Illinois could be just the catalyst the sportsbook needs to improve on its low ranking.
The numbers don’t lie. The Barstool Sportsbook has struggled to make a dent in the Illinois online sports betting market. Since the start of legal sports betting in Illinois, Barstool ranks fifth in market share in both handle (5.4%) and revenue (4.3%) out of seven operators.
Mann is a partner in rEvolution, a sports marketing company that has its global headquarters in Chicago. Now that PENN Entertainment is rebranding its US sports betting operations under the ESPN banner, Mann told PlayIllinois that just on brand alone, ESPN may have more universal appeal than Barstool’s narrower, young male target demographic.
“The ESPN brand is going to resonate a little bit more than Barstool, even though Barstool probably resonates within that core 21 to 34 audience that ESPN wants to embrace,” Mann said. “I think just the nature of the ESPN brand will help them, but I still think it’s going to be a fight.
“I think [ESPN will] have success, but I’m not sure they’ll have success right away because, in Illinois, there’s a lot of competitors. You have BetRivers you’ve got MGM, you’ve got you’ve got obviously FanDuel and DraftKings.”
All this led to a number of other marketing questions.
Will gambling help ease ESPN and Disney’s troubles?
Mann said having ESPN in the gambling space, once approved by the Illinois Gaming Board, will be a positive “because they are the worldwide leader in sports.”
Despite challenges related to the financial woes of ESPN’s parent company Disney, the fact viewers are unsubscribing from cable television in droves and the recent firing of some high-profile ESPN on-air talent, Mann said ESPN is still a huge name and big operator in the sports world.
“I think they’ll bring a lot of dollars to the table [in the gambling space] and I think they will have an impact,” Mann said. “I think the impact will be more on the DraftKings and FanDuels of the world. It will be interesting to see from an acquisition perspective who’s able to do what.
“ESPN, whatever they touch tends to have success. [But whether they have] success in the [gambling] space will interesting because, obviously, there’s a lot of competitors all chasing the same acquisition.”
Tying the ESPN brand to gambling is not a panacea
Tying a successful brand to gambling isn’t without its pitfalls, Mann said.
“[Gambling] is still not 100% universally accepted,” he said. “And there’s a lot of brands that aren’t going to get involved in it. I still have brands that won’t look at doing a hospitality program in Vegas around Super Bowl because it’s Vegas… I still think there’s a [hesitancy] around gambling and some brands are definitely gun shy a little bit. And that’s even with all the proliferation and the growth of gambling. There are brands that want to stay away from it.”
Plus, remember, this is Disney we’re talking about. The company has long been reluctant to stray too far from its family-friendly roots.
Still, the acceptance of gambling is changing rapidly. One simply needs to look at the professional sports leagues’ 180-degree turnaround with respect to gambling. Just a few short years ago, gambling was considered abhorrent and a threat to the integrity of the games. Today, leagues have willingly jumped into lucrative sponsorship deals with sportsbooks.
“A few years ago, it was more risque, but gambling has become such a forefront of sports… now it’s prevalent,” Mann said. “We’re now branding the [gambling] brand the way we would brand any other brands.”
Will FanDuel and DraftKings continue to advertise with ESPN?
Yet, how and where the Illinois sports betting operators choose to try to build their brands could become complicated in the case of ESPN, said Mann (above).
“I know you’re looking at this just from an Illinois perspective, but I find it fascinating because I think it will be interesting to see if FanDuel and DraftKings continue to advertise on the ESPN platform or ESPN networks and digital platforms, now with them being in the competitive gambling space,” he said,
Consequently, would any loss in ESPN advertising revenue be offset by ESPN Bet?
Remember, margins are extremely thin in the sports betting world and profitability for sports betting operators has been elusive, especially when customer acquisition typically involves a high spend.
Plus, Barstool ranks fairly low in competition with DraftKings and FanDuel not just in Illinois, but most states where they are currently legal. Making money via gambling won’t be easy, even for a name as prominent as ESPN, when starting near the bottom.
Will ESPN programming become more gambling-centric?
There’s the other end of this, as well. What will happen to ESPN programming once they are in the gambling game? Will programming become much more gambling-centric? Mann said he doesn’t think so.
“[ESPN is] still beholden to their league partners,” Mann said. “And I think their league partners are okay with some gambling, but especially with what’s going on right now in the NCAA with all these gambling investigations, and then the NFL obviously suspending some of those football players for betting while they were in the team facility, even though they weren’t betting on pro football games. So I think there’s definitely a lot of concern.
“Obviously, [the leagues] don’t want ESPN to come out and tout, but ESPN certainly has its fair share of programming. They’ve got the Daily Wager, they’ve got a few shows. They certainly included [gambling] in their SportsCenter programming with wagers of the night and things along those lines. You may see more of it on some of their audio platforms, especially here in Illinois like on ESPN 1000 here in Chicago.
“The question will be, will [gambling content] grow? Will they do more now that they’re in the space? I don’t think so. Maybe a little bit. They may end up taking one of their channels, whether it be ESPN News or one of those and turn that into more of a gambling-centric channel. That would make sense, but I don’t think you’re going to see more gambling on ESPN, ESPN2.”
Will the Fanatics brand help its sports betting operations to grow?
While we’re on the subject of branding, Mann was asked whether brand would help Fanatics’s sports betting fortunes now that it is taking over PointsBet’s sportsbook in Illinois (subject to IGB approval, of course).
“I know [CEO Michael] Rubin wants Fanatics to become one-stop shopping for the sports fan,” Mann said. “But, you know, the Fanatics brand doesn’t have that brand cachet that even a Barstool or ESPN has.”
Though, Mann did say Fanatics does have a couple of positives in its corner in attempting to grow in Illinois. PointsBet is now the fourth-ranked Illinois sportsbook lifetime (7.3% market share in handle, 7% in revenue).
“[ESPN and Fanatics] both wanted to have the pre-existing gambling platform established. So, buying PointsBet was key [for Fanatics]. And whatever Rubin has touched, he’s done pretty well. He’s got a lot of relationships, a lot of high profile people that that believe in him, but there’s only so much pie to go around and I think it’s going to be interesting to see how they’re able to grow acquisition.”
Branding might not be as important
Through all of this, it’s important to remember that branding may not be as important in gambling as it is in other products.
Mann said rEvolution does work for smaller, European-based sports betting operator Betfred that is not legal in Illinois, but is legal in Ohio, Pennsylvania, Arizona, Colorado, Maryland, Iowa and Virginia. rEvolution’s Betfred marketing strategy is not built around brand awareness as much as customer acquisition.
“Everything’s tied to the bottom line,” Mann said. “And FanDuel and DraftKings drove their acquisition just by money. They gave away free bets, gave away dollars. But then a lot of private equity money that was supporting those companies has dried up. So, you might see a transition to more of an awareness branding campaign and then acquisition. I don’t know, but I’d obviously like to see [more marketing spend] in our space.”
As ESPN Bet, Fanatics, Hard Rock Bet, Circa and maybe even Betway become new sports betting names in Illinois in coming months, expect there to be an increased marketing spend as they try to grab market share in a mature sector that has long been stagnant in terms of operator names.
Whether brand appeal will be key to driving growth will be interesting to watch.
