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Sunday, June 16, 2024

Why ESPN is heavy into North Carolina sports betting

ESPN is the most prominent media company connected to the surging new business of sports betting in North Carolina.

That reflects the public’s trust in the ESPN brand and owner Walt Disney Co.’s conviction that ESPN should be meeting sports fans where they are headed, says Mike Morrison, vice president of ESPN BET and ESPN Fantasy. That’s the same company that brothers Walt and Roy Disney founded in 1923 to entertain Americans with family-friendly cartoons, films and later theme parks.

“You skate to where the puck is going,” Morrison notes, citing the famous cliche attributed to hockey superstar Wayne Gretzky. “Betting and sports have always been present … it adds to the enjoyment of the event.”

ESPN partnered with gaming company Wyomissing, Penn.-based Penn Entertinament to create ESPN BET, one of several sports book companies licensed to offer betting in North Carolina. Penn National, whose main business is running casinos, agreed to pay ESPN $1.5 billion over 10 years, plus another $500 million worth of warrants to buy Penn common shares. The latter clause depends on how ESPN Bet performs.

Early indications are that it’s going very well with officials “thrilled” with initial demand, Morrison says. ESPN has the most trusted brand name in sports betting, he notes.  Morrison is a former radio and TV journalist in Washington D.C. and New York who has been an ESPN executive since 2007. He most recently was vice president of business development.

The media company says it’s created a strong wall between its news and gaming businesses. Reporters covering games and events aren’t part of the betting promotion. Stephen A. Smith, one of the network’s most famous personalities, appeared at a promotional event last week in Charlotte to spur interest in ESPN Bet. “Stephen has a huge voice, but he’s not breaking news,” Morrison says.

Penn National runs the betting operation and risk analysis, while ESPN’s role is to drive traffic and awareness. The network has various betting-focused shows, runs odds on its programs and has covered the gaming industry for many years.

“I think ESPN’s setup is unique among all the gaming companies. For one, it gets paid from Penn regardless of whether ESPNBET does well,” notes David Bockino, a sports media professor at Elon University. “Two, its talent has been talking about gambling for decades,  so it’s not like this is new.”

Sports betting is exploding with more than 30 states now permitting the business. The American Gaming Association estimated that $93 billion was bet at sports books in 2022, a 63% increase from a year earlier.

North Carolina bettors are expected to wager about $4 billion in the first year and top $6 billion within a couple of years, with the state collecting as much as $100 million annually in taxes and fees.

ESPN, based in Bristol, Connecticut, will measure its success by how its product is received and how fans are interacting with the betting framework, Morrison says.

He notes North Carolina astutely started sports betting on March 11 in time for the ACC and NCAA basketball tournaments. The national gaming association predicts $2.7 billion will be wagered at sports books on the NCAA men’s and women’s tournaments over the next month. That’s more than the $1.4 billion bet on this year’s Super Bowl, the group said.

That’s a fraction of the $15.5 billion that the group estimates was bet with unlicensed sports books and bookmakers, according to the association.

State Rep. Jason Saine and other key promoters of sports betting cited the amount of illegal sports betting as a key reason for North Carolina lawmakers to approve the business.

Other sports betting groups licensed by North Carolina are FanDuel, BETMGM, DraftKings, Fantatics, bet365, Underdog Sports Wagering and the Eastern Band of Cherokee Indians’ Tribal Casino Gaming Enterprise.

 

David Mildenberg
David Mildenberg
David Mildenberg is editor of Business North Carolina. Reach him at dmildenberg@businessnc.com.

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