ESPN Bet launched in New York in the latter part of September 2024 just missing out on the start of the NFL season but still being in a position to capitalize on most of the football action this year.
Market analysts haven’t been very optimistic about ESPN Bet and the approach that Penn Entertainment are taking. However, this may prove to be premature.
Looking at sector performance in New York State from July 2024 to October 2024 we see a rapid increase in brand searches for ESPN Bet. This is very significant as from a marketing standpoint organic traffic is essential for sustainable new user Cost Per Acquisition (CPA). It also is a proxy for brand awareness.
In the State of New York, search volume for ESPN Bet has overtaken both FanDuel and DraftKings in October 2024. This is remarkable after one full month of operation.
New York Brand Search Volume Sports Betting
*source Google Keyword Planner – Note: we aggregated “Name1 Name2” and “Name1Name2” searches
This will take time to build into a customer base. The reason is the ratio of existing customers versus prospective customers is much different to the DFS brands who have years of customer acquistion behind them. Given this, the handle and GGR numbers ESPN Bet achieved in October in context of brand searches is impressive.
New York Sports Betting Handle and GGR – Jan – Oct 2024
Note: we have rearranged numbers released by the New York State Gaming Commission to match search terms on Google for illustrative purposes only.
Source: New York State Gaming Commission
It usually takes several years for a sportsbook to build a customer database large enough to become profitable against operational and marketing costs. However, once this critical mass is reached, revenues can be layered year on year driving substantial growth. The core element of success is user retention and avoiding unnecessary promo costs.
Achieving $40 million in handle at a margin of approx. 8% in the first full month of operation signals the potential for fast growth.
November and December numbers will give us all a better perspective. But for now, things look positive. ESPN Bet has achieved similar relative brand search numbers nationwide. This shows good performing Above The Line (ATL) marketing and brand recognition.
If ESPN Bet can deliver solid conversion and retention numbers, they could become a serious market challenger in the state of New York much quicker than many have expected.
Conclusion and Learnings – ESPN Bet New York Launch
Penn Entertainment’s assumption that ESPNs brand equity would translate into brand awareness and customer acquisition seems to be paying off at this early stage. However, converting and retaining customers is key.
We expect revenue to increase as more registered customers comprise a higher percentage of brand searches.
As they scale, it is essential that ESPN Bet focus on product, retention and customer experience improvements.
All in all, time is key as we see how performance holds up after the NFL season ends. If ESPN Bet can maintain relative momentum they could be in a great place in time for the start of the next NFL season.
