00:00 (upbeat music)
00:03 Now let's move forward to what the future of Penn does
00:08 with ESPN bet, because I don't know if this is the beginning
00:13 of a trend in some of their promotional spends, Jim,
00:16 or if it's just one state based on results.
00:19 But rewinding a little bit here, of course,
00:22 Barstool and Penn broke up, essentially.
00:25 Penn takes over the ESPN bet, they partner up,
00:28 decide to do a deal, and now we have ESPN bet,
00:31 we've seen that.
00:32 And in November, to get themselves in the game,
00:35 in Maryland, Jim, they spent $13 million
00:40 to put themselves back in.
00:42 Now, as you can see there on your screen,
00:46 unless you have a phone, then you gotta maximize
00:48 and make it a little bit bigger.
00:49 In December, that number dropped off significantly,
00:52 but it was still a fat number, 5.8 million.
00:55 But Jim, what has happened in January?
00:57 Why has Penn decided to drop off their promotional spend
01:01 so significantly?
01:03 Is it just because they feel they've captured
01:05 the people they wanna capture online?
01:07 Is it because things are not working out for them
01:09 as well in Maryland?
01:10 Is this a natural progression for how some
01:13 of the sports betting operators use
01:15 their promotional money?
01:16 Tell us more.
01:17 - Yeah, I think it's a combination of all of those factors
01:22 that you just mentioned, Craig.
01:24 We've been talking for the last couple of weeks
01:27 about this topic here on the show,
01:30 just when would we see the promotional spend drop off,
01:35 not only in Maryland, but in the dozen plus other markets
01:41 that ESPN, Bet, and Penn are operating in.
01:44 So I do think it is just the sort of natural progression
01:48 that we would expect to see after a,
01:53 we'll call it a new app, launches in a state
01:56 and everybody gets the very promo heavy
02:01 and trying to, in this case, entice former users
02:06 to hop back on the app and also entice new users.
02:11 And interestingly enough,
02:12 on Penn's quarterly earnings call yesterday,
02:15 they said that the number of people that took advantage
02:19 of those promos and either rejoined the app
02:23 or downloaded it for the first time,
02:26 exceeded even their expectations,
02:28 which drove that promo spending, not only in Maryland,
02:33 but in all of the markets where they're alive,
02:36 drove that promotional spending a lot higher
02:40 than they had originally projected.
02:42 Now, what have we seen from ESPN, Bet here in,
02:46 you know, two and a half, three months now,
02:48 is fairly consistent, right?
02:51 I think in most states,
02:53 they're around that 7, 8% of handle,
02:57 not really nipping at the heels of the top two
03:01 in DraftKings and FanDuel.
03:03 So perhaps seeing how that trend and staying consistent
03:08 in terms of their market share has been since they launched,
03:13 perhaps that also played a factor
03:15 in the reduction of promotional spending,
03:19 you know, not necessarily moving up in the ranks,
03:22 if you will.
03:23 One other thing that I thought was interesting in Maryland,
03:29 their revenue for January was less than a million dollars
03:35 when you remove their promotional spending.
03:38 So still again, like we've seen there
03:41 since the middle of November,
03:43 just how heavy that promotional spend was
03:46 in relation to the amount of money
03:49 that they were generating is, you know,
03:52 that sort of difference is still quite stark.
03:57 One other note going on across the country for Penn,
04:01 they did just recently purchase
04:04 the WinBet license in New York.
04:06 So they will be launching the ESPN Bet app in New York,
04:12 which, you know, as we know is one of,
04:15 if not the biggest sports betting market
04:17 in the country right now.
04:19 So extra eyeballs, extra users
04:22 that they could potentially capture there.
04:26 I think we're probably looking at sometime later in the year
04:30 for the debut of ESPN Bet in New York.
04:34 (upbeat music)
04:37 [MUSIC]
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