ESPN Bet may soon challenge the top operators in the US market according to Truist’s latest nationwide report on consumer preferences.
Market leaders FanDuel and DraftKings could soon be under threat, with data from Truist Securities analysts suggesting Penn Entertainment’s ESPN Bet gaming brand can potentially challenge the big two.
In its 2024 Interactive Gaming Survey, Truist found that ESPN’s position as the main app for bettors to check scores may help the brand’s sports betting platform compete.
Forty-four per cent of sports fans surveyed said they used ESPN to check scores, while 64% of those said they had an interest in integrated betting.
Of those interested, 52% stated ESPN Bet would likely become their main betting platform, while 45% said it was possible.
ESPN Bet’s Chances Of Overtaking DraftKings And FanDuel
Truist managing director Barry Jonas discussed ESPN Bet’s potential after the brand launched near the end of 2023.
Jonas said: “I think their stated goal is to be a podium player, in the top three. Our sense is if they can execute and offer strong technology, we think ESPN as a lead generator will be very strong.
“The issue becomes when people migrate from checking scores on ESPN to bet mode, and if they can keep folks using it as their primary app.
“The challenge of overtaking DraftKings and FanDuel is that you can’t assume those incumbents are staying still.”
Although Penn Entertainment has been in the online sports betting game for some time before launching ESPN Bet, the company may be somewhat behind the curve in the short term after pivoting in November.
Jonas added: “ESPN Bet will be playing catch up to where they are today, when DraftKings and FanDuel are evolving.”
“It’d be a challenge to tackle market leaders, but ESPN Bet can become top three and a podium player.”
ESPN Bet Has A Way To Go Yet
Although Truist had a very positive view on ESPN Bet’s potential, it still sees DraftKings and FanDuel as the top two for the foreseeable.
The survey placed DraftKings in top spot, used by 29% of sports bettors compared to FanDuel’s 22%.
Of those who use both platforms, DraftKings was the preferred operator for 61% of survey respondents. This contradicts state-reported date, Truist noted.
As an example, the New Jersey Division of Gaming Enforcement posted figures that had FanDuel on top in February. Meadowlands, who partner FanDuel, hit $35.1 million in GGR, while DraftKings partner Resorts Digital only managed $24.2m.
The same was seen in Michigan, with FanDuel recording $152.4m mobile betting handle in February, while DraftKings posted $109.9m.
In Truist’s report, it stated: “Reasons for that preference were generally mixed, leading us to believe the consumer generally views the two as largely equal today.”
Can BetMGM Stay Ahead Of ESPN Bet?
Favored by 12% of users, BetMGM is still a major operator. But Jonas is not convinced it can catch the top two, or even stay ahead of the upcoming ESPN Bet brand.
He said:“BetMGM still has strong omnichannel potential and igaming advantages that others don’t have.”
“The question is, can they take the investment year and use it on technology and improve their offering?
“It boils down to execution. It’s hard to say yes or no. It has a very strong brand and the ownership structure is complex, which has likely at times been both beneficial and detrimental. That’s something to look at to see if it starts to lean towards more beneficial.”
A joint enterprise between Entain and MGM Resorts, BetMGM relies on both partners for its funding and resources. Although this gives acces to Entain’s specialist trading solutions, rumours suggest casino operator MGM Resorts may be looking to buy out its partner.
Discussing the partnership, Entain interim CEO Stella David said: “In the US, we’re very proud of the successes that we’ve had with BetMGM and its performance quite rightly is a key focus for us.
“And where I like to think of MGM and ourselves, Entain, that we are the co-parents of BetMGM. But being fully transparent, it took us, and that is Entain, some time to realise just how quickly we needed to feed BetMGM with better product, better customer experiences and better, more focused US-tailored products.”
Responsible Gambling a Key Concern
In the survey, numerous questions were asked about sports betting and iGaming. Respondents gave valuable insight into consumer preferences and behavior.
Predictably, changes in the cost of living have impacted the industry to a degree. Despite this, 40% of respondents said their gambling habits had not changed as a result of the crisis.
Of the 554 eligible responses received by Truist, 76% were online sports bettors while 77% played online casinos. Almost a quarter (23%) bet only on sports, while a similar figure (24%) only played icasino games, with 54% doing both.
Truist has stated its survey demonstrates a positive view on US digital gaming. And yet, there are growing concerns in some corners.
Problem gambling, adversing policies and other aspects have been under increased recently.
“It’s clearly incumbent on US operators to learn lessons from across the pond, the continent and Australia,” Jonas said.
“Companies understand the risks and are actively working to prevent any irresponsible gaming and prevent improprieties. In many cases, DraftKings is taking the lead in spotting fraud.
“As long as they focus on responsible gambling, then they’re doing everything they can. In terms of federal regulation, gaming historically is under the state’s domain.”
Offshore Gambling A Significant Factor
A large number of respondents admitted to betting offshore. In states where online betting is still illegal, betting through offshore sportsbooks is common practice.
Discussing these offshore markets, Truist’s Patrick Keough said: “It’s not in anyone’s best interests for players to turn to illegal markets.
“There is player protection onshore that isn’t available offshore. I think longer term, it could be a tailwind if players bet exclusively onshore, but the path there is a little murky.”
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