ESPN could soon strike a betting partnership with DraftKings

The news: Disney is close to striking a deal with DraftKings to bring betting to the sports broadcasting company ESPN, Bloomberg reports.

What would the deal look like? Exactly how the partnership could take form is unclear, but other broadcast and sportsbook crossovers provide hints.

• ESPN could begin producing DraftKings-sponsored programming or content on statistics and betting. In fact, gambling content is already a part of ESPN’s slate: It regularly features articles with betting tips as well as videos suggesting how best to wager on matches.
• But the partnership will almost certainly go beyond that. FuboTV, for example, recently allowed users in some states to place bets directly via their TVs and apps. It may not be long before ESPN begins to feature in-app betting on phones and TVs, or at the very least overlays with data relevant to gambling.
• Multi-screening is also likely to be encouraged, especially if ESPN doesn’t end up allowing betting through its own services. We’ve seen sportsbooks push for similar behavior: FanDuel’s upcoming TV network will be “the first network built from the ground up that is designed to be watched with a phone in your hand,” CEO Mike Raffensperger said.

No matter how it goes down, one thing’s for certain: While Disney will almost certainly get a cut of gambling revenues, it will not handle wagers itself. Gambling’s legalization may be reducing its stigma, but it’s still a fraught topic that Disney wants to keep its Mickey Mouse gloves washed clean of.

• In a recent interview, CEO Bob Chapek stated that “ESPN is never going to be a sportsbook,” and instead was looking for a “respected” partner to handle wagers.

Why the sports betting push? Thankfully, this one’s pretty simple: There’s money to be made.

• Sports betting is generating significant revenues. In its first nine days in New York state this year, mobile sports betting topped $600 million.
• Demand for sports gambling is also increasing. The number of online sports bettors increased 40.6% last year, and sports gambling ad spending more than doubled. Gambling integration could help ESPN carve more space out in the increasingly fractured and competitive sports streaming space.
• For DraftKings, it means a partnership with one of the world’s biggest media companies and sports broadcasters that could spare it from having to spend big on advertising—something that’s been a point of concern for sportsbooks and driven their stocks down.

The big takeaway: Sports betting is a no-brainer for ESPN, or any sports broadcaster for that matter. But the logistics are still complicated, as are the repercussions on company brands.

• A betting partnership would certainly funnel more users and dollars into Disney’s coffers, but the still-fraught space could open it up to unwelcome scandal.

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