ESPN Bet: Conflict of Interest or Just Good Business?

I want you to imagine something with me. Yes, you.

You are going to the doctor’s office, the same doctor you have gone to for 10 years for a routine check-up. You walk into the office and you suddenly notice there are advertisements for a new pharmaceutical company that owns the hospital.

A bit overkill to advertise in your own building but whatever. You don’t think much of it.

Fast-forward and you are sitting with your doctor and she is telling you that you have some minor issues that you need a new medication for. 

She says, “Well, you could get some other medication but I would highly suggest this drug from ‘Insert big Pharma company here.’”

You remember that this is the company that owns this building and the name of the company you saw advertising in the hall way as you walked in. 

Massive Red Flag.

What is running through your mind?

Are you concerned that your doctors judgement has been clouded by the fact that she has to sell a certain product to her patients because of a new deal that is funding the hospital? 

Are you concerned that she is worried more about the business rather than the most important thing, your health?

That concern you are feeling is real. It is legit.

And it is caused by a major Conflict of Interest.

PENN gets into Bed with ESPN

In the past week, massive news broke as PENN Entertainment announced that it would be discontinuing its relationship with the Pirate Boys, Dave Portnoy and Barstool Sports and moving on to deeper, more extensive waters.

PENN Entertainment revealed it would be getting into bed with the World Wide Leader in Sports, ESPN, to rebrand its sports book and create ESPN BET, ESPN’s very own regulated, state of the art sports book.

Update: ESPN has entered an agreement with PENN Entertainment to launch ESPN Bet — its own branded sportsbook, via @fos pic.twitter.com/qCLVawmRTF

— Dov Kleiman (@NFL_DovKleiman) August 8, 2023

This was obviously a massive move for many reasons, reasons that I will touch on below but my first reaction was and still is “How is this not a Conflict of Interest?”

Well, News Flash…it is. 

And you as a sports bettor need to pay attention and act accordingly. Because a shift is coming in the sports betting industry and this was the first major domino.

Here is what you need to know…

How the PENN & ESPN Deal Happened?

Before we dive into what this deal means and the different ways I believe this will change the sports betting industry as we know it, for better or for worse, here is recap of what happened and how it happened.

This Tweet thread from Adam Ryan from WorkweekInc does a great job explaining the ins and outs of this deal. Click on it and read through the thread. The main point I am going to make about this deal he touches on in this thread.

The Barstool deal is the talk of Twitter.

The company was sold for $500M to Penn in 2020.

Three years later, Portnoy acquired 100% of the brand back for $0.

But that's not the whole truth. Here's what really happened 👇

— Adam Ryan 🤝 (@AdamRy_n) August 8, 2023

Here’s a Recap…

• Barstool Sports was sold to Penn Entertainment for $500M in 2020. Three years later, last week on August 8th 2023, David Portnoy acquired 100% of the brand back for $0.
• Penn announced they became the official sports book of ESPN. ESPN gets 117M unique visitors/month vs BarstoolSports get 8M.
• Part of the deal is that Barstool has a noncompete with Penn. Before the Penn acquisition, the largest advertising client of Barstool was sportsbooks. Now, no money is coming in from their best profile of clients. Which puts constraints on the business.
• On top of that, Barstool cannot launch it’s own sportsbook.
• Lastly, if Dave ever does a liquidation event or dividend, Penn gets 50% of the proceeds. So basically if there ever was a reason to sell Barstool Sports Penn would get 50%.

In short, Penn wasn’t making nearly the headway in the regulated industry with its partnership with David Portnoy and Barstool and it wanted a bigger slice of the sports betting pie than what was being served up by Barstool Sportsbook.

So they jumped off the Portnoy Pirate ship and waltzed into the Disney castle (ESPN is owned by Disney don’t forget).

That is a basic run down of what happened and how it happened. There is more to that story and if you want to know all the ins and outs of this deal, you can read about it here.

But for me, this is about what this deal MEANS to the sports betting industry as a whole.

And why this deal could be a massive conflict of interest for ESPN.

ESPN to Cover it All…but How?

As you know, Sports betting is becoming more and more a normal part of life as sports fans. You can’t turn on any sporting even without seeing advertisements for various Sportsbooks and the different promo codes and ways to bet on the current game you are watching and other amazing offers.

Advertising at its finest.

I am not here to tell you that I think it is a bad thing that sports betting has become much more front facing in the past 2 years, since its legalization via the repeal of PAPSA in 2018.

If anything, I absolutely love it.

But we have entered a very interesting period as more and more states legalize online sports betting and more sportsbooks are wanting to get a piece of the pie.

Now, with the news that ESPN Bet is set to launch in the fall of 2023, the game will change forever.

What Does it Mean?

Let’s go back to my example from the beginning of this piece, you sitting in your doctors office.

That feeling of the doctor only selling you the medication because of her ties to the big Pharma company that purchased the hospital.

Remember that feeling?

Now, I want you to imagine you have downloaded ESPN Bet and they suggest you take a Moneyline bet on the Miami Heat to win, and you notice that game is featured on ESPN that night. There is a boost on the Heat to win as well.

What do you think?

Are you going to take that wager?

The inexperienced to average sports bettor is going to take that bet, without knowing a lot about the game, simply due to the fact that “Hey the Game is on ESPN, might as well just bet it there too.”

Well, it has already been proven that taking wagers from companies connected to the outcomes and production of these games and major sporting events can be fishy, or even dare I say fraudulent. Just ask Shams Charania and FanDuel…

It’s Already Happening, Can it be Stopped?

 

Before I continue, I want to say that I love sports and I do not and will never believe that sports are rigged or that there is foul play during games to affect the outcomes.

I believe in the purity of the game in play and will continue to maintain that point of view until proven otherwise.

However, media coverage in association to news that affects the lines and betting odds of events or games I 100% believe is starting to be manipulated to feed into particular betting narratives. It is happening slowly and infrequently right now, but with this ESPN deal, this will become more and more the norm.

A prime example of this occurring very recently was right before the 2023 NBA draft.

Shams Charania, the NBA Insider for the Athletic and FanDuel TV, reported that there was serious movement towards Scoot Henderson being drafted #2 overall in the NBA draft.

Sources: Scoot Henderson is gaining serious momentum at No. 2 with the Charlotte Hornets in tonight’s NBA draft. Hornets have been torn over the last week between Henderson and Brandon Miller. Team has final meetings today to settle on decision.

— Shams Charania (@ShamsCharania) June 22, 2023

Now, he never came out and flat out said that but he made it clear that it was a definite option and had “inside information” that it was going to happen.

This moved the line for Scoot Henderson to go 2nd overall, which ended up not happening and many bettors landed flat on their face.

This piece from USA Today covers this story well, and makes this point to close the article:

So, are people reading too much into this situation? Maybe. But it doesn’t take much reading to see how market manipulation by insiders could be a major problem at some point in the future.

As more reporters inevitably get into bed with sportsbooks, it’s something bettors should keep in mind.

Well, that day has come. Reporters are not only getting in bed with the books, the books are now a major part of the bed.

And this is why ESPN and ESPN Bet is a major conflict of interest. In more ways than one.

What Can You do About it?

Well, there are multiple things you can do but the first and most important thing is remind yourself of what you have read in this article.

This is an irreversible situation. This is happening and it is going to continue to happen so use this information to remind yourself of these things when and where you place your sports wagers.

There is a list of Sports books we have reviewed here at Betting News that have no ties to any markets or tv channels and provide you with the lines, best bets and most importantly, no conflict of interest.

Just a friendly reminder that you can bet somewhere else OTHER THAN ESPN Bet and FanDuel.

Secondly, stay informed about your wagers and where you get the information about them. ESPN Bet, FanDuel and others want you to wager at their books. So much so that they could begin to manipulate the data you use and the information you receive about the games you know and love.

Always check your sources and check to see if they have any sports book ties before taking into account their ‘breaking news’.

As I said, this is only the beginning. Sports betting is challenging enough with the millions of unknown variables at play when you go to press those buttons.

Hell, that’s why we love it.

Don’t let the manipulation of the market by ‘insiders’ and the World Wide Leader in Sports with their new Sportsbook sway your judgement and take away the fun of the wonderful world that is sports betting.

Whether ESPN Bet is a Conflict of Interest or Just Good Business, time will certainly tell.

For now, we wait…

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