ESPN Bet Making Progress, North Carolina Could Be Big, Says Analyst

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On the back of a steep fourth-quarter loss notched by the newly minted ESPN Bet mobile application, shares of Penn Entertainment (NASDAQ: PENN) are struggling, but at least one analyst sees runway for the company to get things right with online sports betting.

An image from an ESPN Bet tutorial. An analyst believes the operator can thrive in North Carolina and New York. (Image: YouTube)

In the final quarter of 2023, ESPN Bet, which debuted last November, was hampered by promotional spending and favorable outcomes for bettors. Deutsche Bank analyst Carlo Santarelli, who noted ESPN Bet has approximately 8% market share in the states in which its operational, can work through those hurdles.

This topic has been largely muted in the discussion around the performance in the period,” he wrote in a new to clients following meetings with Penn management.

He rates Penn “hold” with a $23 price target, which implies upside of 25.6% from today’s closing price of $18.31. Shares of the regional casino operator are off 29.57% year-to-date and 39.2% over the past year.

North Carolina Could Be Game Changer for ESPN Bet

Currently, ESPN Bet is live in 17 states — Arizona, Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, New Jersey, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia.

The operator is launching in North Carolina in the coming days and that’s pertinent because that state will be the first in which the app will debut alongside rivals rather than entering a market with entrenched incumbents. Santarelli noted that’s potentially advantageous for Penn and should ESPN Bet claim 10% share in North Carolina, analysts and investors would likely turn attention to other states in which the gaming company can accomplish that feat.

The timing is crucial because North Carolina is one the states most enthusiastic about college basketball and the NCAA Tournament — one of the most wagered on events in the US — commences later this month.

Santarelli added that ESPN Bet could be more competitive in North Carolina than it has in other states because its parlay menus and links to ESPN Fantasy could attract new customers.

New York, Other Potential Catalysts for ESPN Bet

The Deutsche Bank analyst also pointed out that Penn hinted at a new leader for its interactive gaming division, which includes ESPN Bet. While that person was identified, it is believed to be someone with strong engineering and technology experience – pivotal traits in the hyper-competitive world of US online sports betting.

New York, where Penn recently paid $25 million to WynnBet to acquire its sports wagering license, could also be a catalyst for ESPN Bet market share gains later this year and into 2025.

“We believe each of these enhancements will be in place ahead of football season, while the launch in New York, which we believe could also boost share in neighboring states, is also slated for prior to the football season,” Santarelli concluded.

The post ESPN Bet Making Progress, North Carolina Could Be Big, Says Analyst appeared first on Casino.org.

 

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