As to the “why?” It’s pretty simple: DraftKings, and to a much lesser extent FanDuel, routinely — and by routinely, I mean daily, at least in DraftKings’ case — offer boosted markets.
A 33% boost on any college basketball bet. A 25% boost on any SGP. An additional +300 on any golfer to win a tournament.
For a recreational gambler like myself –- maybe I bet five, 10 times a week –- going to DraftKings is, to me, the obvious choice. I know there’s going to be a boost, and if I like Devin Booker’s three-point prop at -110, I’m going to like it even more at +115.
Yes, I know other top betting apps will sometimes have offers like these, but none with the daily regularity of DraftKings.
Most other sites (including DraftKings) offer specific boosts, tied to pre-made bets. I don’t like those. Mostly because I don’t trust them, and oftentimes, when I price them out at other sportsbooks, they don’t add up.
For instance, at the time of this writing on Thursday, February 22, 2024 at 8:30 a.m. ET, DraftKings is offering a 50% SGP boost on the Devils and Rangers game.
I’m probably going to on this, but bettors get to create their own wager, and then get a 50% price bump. Who could complain?
Over at ESPN BET, the featured bet is a +400 wager on whether Stephen Curry and LeBron James will combine for over 64.5 points in the Warriors-Lakers game.
One, I don’t know if this is an +EV bet, but I’m guessing it’s not. And two, James was ruled out –- 12 hours ago.
Are you even trying, ESPN BET?
Tough Q4 2i254f
It has been a weird and cruel February for PENN Entertainment. The stock was trading at $17.27 Wednesday morning, the lowest it’s been since the COVID shutdowns, and down off its high of over $130 back in March of 2021 (and off the $70 or it was trading at when they announced the ESPN deal).
So what happened? A listen to last week’s earnings call sheds some … interesting light.
Basically, ESPN BET proved to be too popular.
The app garnered a million new sign ups in the six-week period after launch last autumn. And their monthly active s in Q4 rocketed to 771,000, up from 189,000 in Q3.
This would seem to be good news.
Alas, it wasn’t, as ESPN BET was offering new s –- as well as existing Barstool sportsbook customers –- $250 worth of bonus bets. (I lost all of it, naturally.) At the time, it was the most generous offer in the industry, and, again – you didn’t need to sign up. Everyone who already had a Barstool could get it.
No wonder they had 771,000 active s in Q4. They were handing out $250 to anyone who showed up at the door.
As a result? The company’s digital unit lost a staggering $333.8 million, walloping analysts estimates of a $151 million loss.
Also notable: The promo ended Dec. 31, and ESPN BET went from 11% market share in Q4 to 7% market share in January.
, this is a company that is hoping, at the high end, for 20% market share.
Spending down 2qs2w
“On the positive side, ESPN BET has acquired a lot of new s,” said Ryan Sigdahl, a partner and analyst at Craig-Hallum Capital Group. “On the negative side, the company is spending about twice as much as they initially guided, yet it has equated to high-single-digit handle share initially versus their medium-term targets of 10-20% share.”
The company has already reeled back promotional spend, and it’s not going unnoticed.
“ESPN BET’s share of revenue has been correlated to its share of promotional spend since launch,” Lloyd Danzig, the managing partner of Sharp Alpha Advisors, said. “That spend has been elevated in previous months and is just now starting to normalize.”
Danzig notes the next step for ESPN BET is how well it leverages the ESPN name – -and the ESPN app, channel, magazine, and everything else –- into the betting product.
“Incremental custom integrations have begun rolling out — for example, betting odds in the ESPN scores app,” Danzig notes. “With more moderated marketing spend, the attractiveness of ESPN BET’s product offering and the ability to uniquely leverage ESPN’s media assets will manifest through market share data in the coming months.”
Sigdahl has questions.
“The biggest question from here is retention and what share trends do through the rest of 2024,” he said. “Management expects to increase with product improvements and better ESPN integrations, but investors/analysts are more skeptical.”
For Sigdahl, it comes down to a pretty basic notion.
“Our view: promotions get s to the app and make an initial deposit, but product and experience retain that and reap high LTV [lifetime value] of players,” he said.
I want my LTV 2k3o1s
And for this … well, I check DraftKings and FanDuel every day. Can’t say the same for ESPN BET. My retention rate there is pretty much 0%.
The reason, again, is simple: There’s nothing in the product that catches my eye. The promos are all pre-made bets, there’s never –- at least to my knowledge –- simple percentage boosts. ESPN BET is not offering me anything I can’t get anywhere else.
“ESPN BET launched quickly after g with Penn, ostensibly to capitalize on the strategic advantages of rapid market entry – building loyalty and recognition while preventing ESPN viewers further ingraining habits on competing platforms,” Danzig said. “However, the expedited launch meant going to market with the same product that had previously performed unremarkably under Barstool, raising concerns about the potential loss of a unique chance to impress s.”
Well, that’s me. Color me unimpressed.
Is it possible I’m on an island? Perhaps I’m too close to the action, covering the industry.
A recent YouGov.com poll would seem to indicate that.
They asked 1,000 people –- not specifically sports bettors, but just U.S. adults -– what their opinion of ESPN BET is. According to the results, people would be more likely to recommend ESPN BET than other sportsbooks, think ESPN BET offers better value than other sportsbooks, and has a better reputation than other sportsbooks.
So sure, maybe in the more square communities, ESPN BET has made inroads.
I hope none of them are betting that Curry-James boost.
Be better, please 571o54
Truth is, I want ESPN BET to raise their game. I’m in New Jersey, and I have options. At last check I have at least 15 books and two exchanges. I’ll price shop now and again, especially for futures, but on the day-to-day level, when I’m just looking to bet a game or a prop? It’s DraftKings, it’s FanDuel, and it’s whichever percentage boost is more attractive.
These two apps have me, and they have me because they offer me regular value, and I’ll look past minor pricing differences to save time. You would think ESPN BET — which is clearly hoping to become America’s sportsbook — would be offering a similar value-add to would-be customers, but they aren’t.
I reached out to ESPN BET to ask if there were any future plans to add to their daily boost menu, but emails were not answered on the subject.
Is it all this simple? Would a few percentage boosts each day turn me into an ESPN BET customer?
Actually, for me, it is pretty much that simple. I’m surprised PENN and ESPN BET aren’t taking that page from DraftKings and FanDuel’s playbook. It’s the lowest hanging fruit out there, and it would make ESPN BET a daily stop.
