Disney is going to raise profits with sports betting
One of the largest U.S. holdings in the entertainment industry, Disney plans to develop a new direction, namely, sports betting. Among the reasons were the unfulfilled forecasts for this year's financial performance.
Despite low profits, the company's sports division has shown steady growth. Sports video streaming service ESPN+ (owned by Disney Media) increased its audience by 66% over the past year. Furthermore, almost 90% of all Disney television broadcasts with the highest number of views were sports events.
One more factor was the repeal of the ban on sports betting imposed by the U.S. Supreme Court in 2018. Since then, bookmakers have started operating legally, and this sector has begun to develop rapidly. According to the American Gaming Association, in the first half of 2021 alone, Americans have bet $24 billion. In the future, this amount is expected only to grow.
It is still unknown how Disney will implement the betting, either directly (requiring a license) or through intermediaries. In the summer, the Wall Street Journal reported on the company's negotiations with DraftKings and Caesars Entertainment. According to the magazine, it was about entering into a licensing agreement at a rate of about $3 billion.