Over the course of greater than twenty years with ESPN, anchor Scott Van Pelt has endeared himself to viewers by commentating on the long-lasting 18th gap on the US Masters golf match and delivering breaking information on the broadcaster’s flagship SportsMiddle programme.

In an advert launched to advertise Tuesday’s launch of ESPN Bet, the Disney-owned sport community’s betting enterprise with on line casino group Penn Entertainment, Van Pelt, identified affectionately by viewers as SVP, pumps his fist as a notification flashes up on his cellphone declaring him a “winner!”

The 15-second industrial is a glimpse into why Penn agreed to pay ESPN $150mn a 12 months to safe a 10-year licensing deal, wagering that its broadcast stars and 200mn-strong month-to-month viewers will assist crack the duopoly of DraftKings and FanDuel, which collectively management greater than two-thirds of the $9bn US on-line sports activities betting market.

“People that think this battle has been fought and won are way ahead of where I think the market is,” stated Steve Bornstein, ESPN’s former chief govt who runs betting knowledge group Genius Sports’ North America division. “Obviously there are some very dominant players . . . but we’re still in the go-go growth stage, the market is not calcified.”

For ESPN, Penn affords experience within the playing sector and the know-how to energy the brand new app, which the on line casino group acquired in its $2bn takeover of Canadian gaming app theScore in 2021. Penn additionally operates greater than 40 bricks-and-mortar casinos.

Penn will pump a further $150mn a 12 months into advertising and marketing ESPN Bet, which is launching in 17 states.

ESPN Bet is just not the one latecomer hoping to interrupt right into a market which has quickly consolidated within the 5 years because the US Supreme Court overturned a 1992 legislation banning sports activities betting. In August, sports activities merchandise firm Fanatics launched its betting app in 4 states, hoping a suggestion of a free sports activities jersey after inserting $50 value of bets would entice followers.

But “first-mover advantage”, mixed with the fine-tuned know-how utilized by DraftKings and FanDuel, imply “it’s going to be pretty difficult for any other companies to break 10 per cent market share”, predicted Chad Beynon, a gaming business analyst at Macquarie Group. In the 26 US states, in addition to Washington DC, the place sports activities betting is authorized, corporations which have launched even simply months after the legalisation date discovered it “incredibly difficult to acquire customers”, famous Beynon.

Since the beginning of the NFL season, Fanatics and its sister app FactorsBet, which the sports activities merchandise group acquired for $150mn final 12 months, have been downloaded 371,000 instances by smartphone customers, the fourth highest for any sports activities betting app over the interval, in response to JMP Securities. But the Fanatics app has thus far failed to attain larger than a 3.5 per cent market share in any state.

“Ultimately, we’re a second mover . . . we embrace that as permission to frankly move more methodically,” acknowledged Matt King, chief govt of Fanatics betting app, who beforehand ran FanDuel between 2017 and 2021. He added that “the quest for short-term market share bumps” had traditionally led betting apps “to light a lot of money on fire”.

By subsequent spring, Fanatics may have migrated the entire FactorsBet clients over to its app, enabling clients in as many as 20 states to entry the brand new app. “Our view is let’s take time to get our product right,” added King.

But Penn doesn’t have the posh of time to make successful of ESPN Bet. Three years into the partnership, ESPN can activate a termination clause on the association if the app fails to achieve vital market share. ESPN Bet “needs to come out of the gates firing”, stated Bernie McTernan, a senior analyst with Needham & Co. The deal additionally grants ESPN the power to finally change into a major shareholder in Penn.

In investor conferences, Penn and ESPN executives have talked up a Jefferies survey of greater than 1,400 informal sports activities bettors, which confirmed that 53 per cent had been open to making an attempt ESPN Bet and 25 per cent anticipated to make it their main betting platform, in response to folks acquainted with the matter.

On Tuesday, Penn will ship a immediate to the 2mn clients on its Barstool sportsbook to obtain the ESPN Bet app. But the larger hope is that the app will enchantment to ESPN customers who use the game networks to examine scores however presently “have to leave ESPN’s ecosystem” to position a wager, Jay Snowden, Penn’s chief govt, defined at a launch occasion this month.

Snowden has beforehand pointed to the success of the UK’s Sky Bet, which makes use of broadcaster Sky Sports’ model identification and now has the identical guardian firm as FanDuel, as a blueprint for ESPN Bet. “There’s only one worldwide leader in sports so this was the opportunity of the century,” stated Snowden.

ESPN Bet branding will probably be rolled out throughout ESPN’s TV reveals within the coming months. On the app, ESPN’s hosts, similar to Van Pelt, will advocate bets for customers.

Since sports activities betting was legalised, Disney has toyed with the thought of launching an ESPN betting model as a method of returning the broadcaster, which generates $2.9bn in annual earnings, to progress, however chief govt Bob Iger was initially cautious.

Iger stated on an earnings name in 2019 that he doubted ESPN could be “getting into the business of betting” any time quickly. But in his second stint as Disney chief govt, that place has modified as ESPN considers promoting a few of its 80 per cent stake to a strategic associate which may help it prosper within the streaming period as revenues from cable subscriptions fall.

Sports betting was all the time ESPN’s “manifest destiny”, stated John Kosner, a former ESPN govt accountable for its digital merchandise however who now runs business consultancy Kosner Media. “What it means to be the worldwide leader in sports is different in 2023 than it was in 2013,” defined Kosner.

ESPN held superior talks with main sports activities betting operators, together with Caesars Entertainment and DraftKings, with whom it had promotional agreements that didn’t show profitable, in response to an individual acquainted with matter. “It seemed like we were on the 10-yard line . . . for several years with a bunch of different people,” stated an govt near the talks.

ESPN chief govt Jimmy Pitaro opted for Penn as a associate after first assembly Snowden on the sports activities community’s headquarters in Connecticut earlier this 12 months. Reflecting on the assembly, Snowden stated: “It was very clear to Jimmy that this isn’t something that ESPN wants to do, this is something that ESPN has to do because sports fans are demanding it.”

But the doorway of Disney — the leisure big behind Mickey Mouse and Pixar animation studios — into playing, a product linked to habit, is just not with out dangers. “I’m not sure we’ve heard the end of people complaining about gambling in the States,” warned a former senior ESPN govt. “There are going to be negatives because there are people dead set against it, there’s certainly problem gambling.”

However, the prize for brand spanking new entrants is a tantalising one. The US sports activities betting market is ready to develop an extra 60 per cent by 2027, reaching annual gross gaming revenues of practically $18bn, in response to business consultancy Eilers & Krejcik Gaming.

Will the US sports activities betting business stay a duopoly in the long run? “Forever is a long time,” stated David Katz, an analyst at Jefferies. The two dominant gamers “cracked the code” of in-game accumulator bets, probably the most worthwhile and common product, added Katz. “But there’s going to be some next big thing and whether FanDuel or DraftKings get there first, or whether it’s somebody else, I think is a fair question,” he stated.

For a very long time after its launch in 1979, ESPN “was not taken seriously” as a sports activities community, recalled Kosner, previously of ESPN, however it flourished into the world’s largest and “the rest is history”. “I wouldn’t bet against ESPN Bet either.”