Three months after unveiling ESPN Bet in the U.S. sports betting market, PENN Entertainment President and CEO Jay Snowden aims to enhance the betting platform even as it prepares to debut in North Carolina.

Snowden shared his outlook during PENN’s 2023 Q4 earnings call after the company ditched the Barstool Sportsbook to rebrand its betting operations under the ESPN banner, in a $1.5 billion decade-long agreement.

Early ESPN Bet Success But Room for Growth

In its first two months post-launch, ESPN Bet scored over 1 million app downloads – a figure Snowden didn’t expect to hit for a full year. The strong early interest has ESPN Bet holding 7% market share, currently third among operators.

However, steep promotional investments to attract customers have impacted profitability. PENN posted a $358.8 million Q4 net loss, with Snowden admitting, “Promotional spend was much higher than we anticipated.”

But the CEO expects less aggressive promotions moving forward as ESPN Bet transitions from acquisition to retention. “People are weaning off those early promos,” Snowden explained. “They’re dipping into their wallets, making deposits and continuing to play with us.”

Targeted deals around events like March Madness may still occur but won’t be the norm. Snowden forecasts future promotional spending at roughly 3% of handle, far below last November’s mark.

Preparing for North Carolina Sports Betting Launch

On March 11th, ESPN Bet enters North Carolina in its first new market since debuting in November across 17 states. The Tar Heel State launch offers a unique opportunity as ESPN Bet opens simultaneously with other sportsbooks there for the first time.

Snowden remains bullish on ESPN Bet’s prospects, noting 7% handle share significantly undersells its almost 2x share of weekly active users.

“If we can be at 7% handle market share in the early days…we feel really good about where those are going to take us over the course of the next 12 months, 18 months, 24 months,” he said. “We don’t anticipate that 7% is going to be as good as it gets by any means.”

Product Improvements Now the Focus

With the major launch phase complete, Snowden said engineering teams can concentrate on adding features and enhancing functionality. Efforts will focus mainly on expanding same-game parlay options.

Deeper integration with ESPN’s media platforms and fantasy sports offerings are also on the roadmap. These product investments look to close the gap on current market leaders FanDuel and DraftKings.

“We’re not really super focused on where we are today on market share,” explained Snowden. “It’s where are we going to be in September and beyond.”

So while the early emphasis has been user acquisition through North Carolina sports betting apps and promotional deals, PENN seems confident that ESPN Bet’s market position will continue improving as the product matures.

And the upcoming entrance into North Carolina’s opening sports wagering market gives ESPN Bet a high-profile springboard to showcase its platform to potentially millions of sports fans across the state.

✅ Fact Checked on February 16, 2024 by Ken Weaver