ESPN Sports Betting Brand Gives State Regulators Pause

November 12, 2023 | Sports Betting

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BOSTON, MA (November 12, 2023) — The blurred lines between sports media and sports betting were in the spotlight of the Massachusetts Gaming Commission earlier this week as regulators probed the marketing deal between Penn Entertainment and the self-proclaimed worldwide leader in sports, ESPN.

At issue was whether the MGC 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.

In August, Penn announced that it would divest from Barstool Sports and instead enter a licensing deal with ESPN to create ESPN BET. The companies said the rebranded platform “will be ESPN’s exclusive sportsbook and will be part of ESPN’s programming and content integrations starting in the fall. Audiences will be able to place bets through ESPN’s digital products.”

Rogers told the commission Tuesday that Penn and ESPN developed guidelines to be followed when promoting ESPN BET on social media and other channels; adopted a policy regarding the promotion of ESPN BET on college campuses, including as it relates to the popular College Game Day show on ESPN; that there will be “comprehensive guardrails” around the integration of sportsbook offers within ESPN customer campaigns; and that ESPN is developing a set of employee guidelines meant to ensure that ESPN maintains its journalistic integrity.

He said Penn is “confident that our new marketing collaboration with this well-established and trusted brand will result in meaningful economic impact to the commonwealth” and said ESPN is “committed to the highest standards of compliance and responsible gaming.”

“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,” Commissioner Eileen O’Brien said. “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.”

Commissioners zeroed in on questions about how it will be made clear to viewers that ESPN the news provider is different from the ESPN BET wagering platform, particularly when ESPN personalities or guests on ESPN shows talk about betting or about insider information that could have an impact on betting activity.

“Let’s take my one of my favorite personalities, Pat McAfee, one of my favorites. He does a show that’s very, very popular. In fact, it was so popular [that] ESPN purchased it from a sports wagering company, right. and in this show, he sets up the entire week’s NFL games. He has the lines that are set, he goes through each one and he starts talking about, with a panel, who he thinks is gonna win, why they’re gonna win, which players are in, which players are hot … where’s the line?” Commissioner Jordan Maynard said.

He added, “Is he being an analyst? Is he being a, is he marketing? What’s he doing in that show, right? and which bucket do we put that into, right? and how do we protect consumers? Because that’s our job and our number one priority. How do we protect consumers to make sure that they’re not listening, like I do, to Pat McAfee and then making, potentially, a bad bet, right? Or potentially, the business is making a lot of money on something that that show is saying.”

Rogers told commissioners that “the key point there is making sure insiders remain independent from ESPN BET, so there will be no connection between the ESPN insiders, reporters or the news desk with anyone who handles risk and trading for Penn.”

But he acknowledged that there can be a perception that bettors are on the outside looking in when news-breakers who have access to important injury or gameplan information work for a media company that is partnered with a betting company that could use that information to sharpen its advantage.

“I think there’s more of a perception than anything. The sportsbooks are completely separate from media partners. and I feel confident saying even that with regards to our competitors,” Rogers said. “I think the perception is that from a consumer standpoint, if you if you believe that the sportsbook has access to inside information that you do not as a consumer, then that causes a concern from a customer standpoint.”

He added that ESPN is working on its newsroom policy “to make sure that they really maintain their journalistic integrity, and it’s really about perceptions for them.” Rogers said he thinks ESPN’s policy “is going to be probably overly conservative” to make sure it is clear that the sportsbook and Sports Center are distinct.

Though commissioners did not fully buy his argument, Rogers contended that what Penn and ESPN plan to do is really no different from the numerous other examples of sports wagering operators partnering with sports media companies. O’Brien said she views the Penn-ESPN deal as different because “you’re taking what is already a pre-existing, known brand with consumer loyalty, knowledge and affinity for what also happens to be the actual product that’s being bet on, and then you are putting a brand new relationship on that on your app and on your sports betting app.”

Rogers acknowledged that tapping into the existing knowledge and goodwill around the ESPN brand is important to Penn, but said he thinks it will be clear to consumers that ESPN BET is something different.

“There’s a lot of content around sports betting now in media. and when I think about what ESPN is going to be doing for us, the brand is part of it. and I think the brand, to me, it’s important from the standpoint of you piggyback on the trust and credibility of ESPN as a provider and I think that’s certainly an enhancement from what we’ve seen in the market,” he said. “As far as the distinction, they’re currently today, for ESPN, they’re giving odds attribution to Caesars Sportsbook. So when they talk about odds, they say, ‘odds brought to you by Caesars.’ They currently do integrations with both Caesars and DraftKings, they’ve worked with other sportsbook partners. I think the consumer is able to differentiate the difference between editorial and sportsbook.”


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