Massachusetts Sports Betting Approves ESPN Bet Launch

The launch of ESPN Bet has been making waves throughout the sports betting industry since it went live on November 14. And that makes sense. It represents a stark shift in the industry. But while it debuted in 16 states to start, it almost didn’t crack the Massachusetts sports betting market.

This will come as a surprise at first glance. Though the Massachusetts Gaming Commission has been among the most stringent when evaluating online sportsbook operators in the United States, ESPN Bet enters the fold with a certain cache. They are backed by not only the Disney-owned ESPN media company, but also Penn Entertainment, a veteran operator of the gaming industry with an extensive footprint in the United States.

Naturally, this raises the question: Why were Massachusetts sports betting officials reluctant to green light ESPN Bet’s launch?

ESPN Bet’s Unofficial Affiliation with Barstool Sportsbook Gave Massachusetts Gaming Commission Pause

Two factors drove The Bay State’s reluctance when it came to approving ESPN Bet to launch in Massachusetts. The first issue was more about branding and affiliation.

Officials apparently took exception to ESPN Bet and Penn Entertainment repurposing the “skins” of the now-defunct Barstool Sportsbook. From Colin A. Young from the Telegram and Gazette:

“At issue was whether the [Massachusetts Gaming Commission] would require anything more of Penn, which operates Plainridge Park Casino in Plainville and the Barstool Sportsbook mobile betting app, or otherwise stand in the way of the planned Nov. 14 launch of the newly rebranded ESPN BET mobile wagering platform. After more than 90 minutes of back-and-forth with Chris Rogers, Penn's executive vice president, chief strategy officer and secretary, the commission decided it wouldn't block the launch but made clear that it wants Penn and ESPN to share more information about how bright lines between the entities will be established.”

Penn Entertainment cleared up some concerns by explaining their marketing plan to the Massachusetts Gaming Commission. ESPN Bet will run differently than Barstool Sportsbooks, they say, and adhere to strict guidelines.

This figures to be a different-maker, even if only temporarily. Remember: Barstool Sportsbook was once investigated for questionable promotional practices. Mainly, they ran a segment that officials argued could be construed as misleading. The assumption here is that ESPN Bet has more rigid promotional guidelines they will follow and implement.

Furthermore, the rebranding of Barstool Sportsbook properties appears to be going off without a hitch. Searches for it redirect to ESPN Bet or to pages that offer updates on ESPN. In the end, it may be the second factor at play that leaves the Massachusetts Gaming Commission lukewarm on the ESPN Bet launch.

ESPN Bet Blurs the Lines Between Media and Sports Betting Properties

For the most part, sports betting in Massachusetts is dominated by gambling operators. Companies offering the opportunity to place wagers are not considered media companies. ESPN Bet changes that.

Indeed, Penn Entertainment is not a traditional media property. But the ESPN-centric branding will invariably link the application to the sports media company itself. What’s more, ESPN Bet will be promoted across all ESPN platforms and by plenty of ESPN personalities. Officials from the Massachusetts Gaming Commission are, in turn, worried about ESPN Bet promotions being interpreted as advice and outright endorsements. As MGC Commission Eileen O’Brien said:

“Just as one commissioner, I can say there's a lot to be excited about about this relationship. And then there's that part of it that we're going to have to watch very closely. I'm concerned about the name being the same and being that level of exclusivity and integration, which again, from a business perspective, I totally understand. But it is an area that I would love to get, when you have it, the more detail on the guardrails. Because to me, that's critical for this.”

The question at the core of this concern: How will ESPN Bet make it clear that it’s different from ESPN programing, analysis and properties?

Penn Entertainment has pointed to the differences in branding. The name isn’t entirely the same, and ESPN Bet’s logo varies from the official ESPN logo. But differentiating the color schemes and designs only goes so far when the name is basically the same. It will be on ESPN and Penn Entertainment to prove that they can effectively draw a line between the sports media company and the Massachusetts online sports betting app that is neither owned nor operated by said media company.

Could ESPN Bet Portend a New Issue for the Sports Betting Industry?

The Massachusetts sports betting market isn’t alone in expressing concern over ESPN Bet’s ties to a sports media company known for its analysis and opinions. It is, without question, a slippery slope for the industry at large. Is it truly ethical for a company that covers and disseminates information on pro sports leagues to also offer or affiliate itself with sports betting services? That is, quite literally, the billion-dollar question.

Many will point out that online sportsbooks throughout the United States such as FanDuel and DraftKings also provide analysis on teams, players, news and betting lines. Some, such as FanDuel, have leaned harder into traditional media coverage, as well. But these properties began as sportsbooks. People associate their names with gambling rather than analysis and news coverage.

The issue is fundamentally different for ESPN Bet. It’s following the reverse course. ESPN was a media company first. Consumers will generally recognize anything with its branding as one in the same.

Perhaps Penn Entertainment and ESPN Bet will successfully differentiate the app from the media company. But if they don’t, it could have repercussions. The Massachusetts sports betting market has strict gambling guidelines in place and has shown on multiple occasions they will be enforced. What’s more, if ESPN Bet raises red flags in Massachusetts, it could dissuade other markets in the United States from licensing the application to operate in their region.

All of which makes ESPN Bet in Massachusetts a relationship worth monitoring. The stakes are high—not just in The Bay State, but for the sports betting industry in general.

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