Penn Entertainment’s (NASDAQ: PENN) ESPN Bet mobile sportsbook, launched just over a year ago, is already showing benefits from its association with the renowned sports broadcast network.

A recent YouGov survey ranks ESPN Bet as the fifth-largest sportsbook operator in the U.S., behind DraftKings, FanDuel, BetMGM, and Caesars Sportsbook. However, ESPN Bet’s affiliation with “the worldwide leader in sports” is proving advantageous, attracting potential clients who hold favorable views of the ESPN brand.

The survey highlights a notable contrast in consumer attitudes: “Among Americans with a strongly negative rating for ESPN, nearly 0% say they would consider ESPN Bet. By comparison, 5% of this group would consider DraftKings or FanDuel. Fortunately for ESPN Bet, Americans with a strongly positive view of ESPN outnumber those with a strongly negative view by a ratio of over 2:1 (23% vs. 10%),” notes YouGov.

FanDuel and DraftKings Still Dominate, but ESPN Bet Gains Ground

The YouGov survey comes amid evidence that FanDuel and DraftKings continue to dominate the U.S. online sports betting market. Nonetheless, Penn’s sportsbook is showing signs of progress, giving hope to investors.

High Costs, High Expectations

Penn Entertainment paid a hefty price for the ESPN branding rights. The August 2023 agreement with ESPN involved a $1.5 billion payment over 10 years, along with $500 million in equity warrants granted to the media company. While some investors have criticized the cost, early indicators suggest the investment is beginning to yield results.

ESPN Bet has distinguished itself by attracting a younger demographic and more female bettors compared to competitors like DraftKings and FanDuel. According to YouGov, 43% of ESPN Bet users are aged 21 to 29, compared to just 30% for DraftKings and FanDuel. Additionally, nearly a third of ESPN Bet’s weekly users are women, slightly higher than DraftKings (27%) and FanDuel (28%).

Unique Niches: A Path to Growth

While football and basketball dominate U.S. sports betting, ESPN Bet is carving out a niche by appealing to fans of less traditional betting markets.

These unique demographics and preferences suggest that ESPN Bet could grow its market share without heavily relying on football, offering Penn Entertainment a potential avenue for long-term success in a highly competitive market.

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