Can you write in? Our next presenter probably doesn't need too much of an introduction, and I'm not surprised that it's a pretty full room for you. So it's my pleasure to welcome the management team from PENN Entertainment. To my left, Jay Snowden, Chief Executive Officer, and to his left, Felicia Hendrix , Chief Financial Officer. So Jay, Felicia, thanks for doing this with us.
Yeah, great to be here.
Thanks, Shaun.
We were just joking about how our summers may not have played out exactly how they thought it, they, we thought they would. Jay, you just had a little bit going on. So, you know, let's just kinda hop right into it. You know, the big news, obviously, ESPN BET, a huge change, both internally, very large strategic agreement, I mean, massive partner, transformative to the sports landscape. I've spent a disproportionate amount of time learning about ESPN and, you know, changes in the media landscape, too, in the last few weeks. So, you know, take us through this just for a moment, you know, kind of what drove the pivot here? You know, what are we really looking forward to?
And then I really quickly want to get into some of the unique features that ESPN is gonna bring to you, and you're gonna be able to grow this platform with, so.
Yeah, happy to. Look, so what's sort of changed in, over the course of the last 3.5-four years? PASPA was overturned five years ago. States started to legalize online sports betting soon thereafter, and then really the last three years, you've just seen a significant ramp as legalization has continued across the U.S. And as you look now versus maybe what we all thought we knew three or four years ago, but you look now at sort of, what is that recipe for success to be on the podium? There's a few things that I think are very clear in that recipe. You can actually bump to the next slide, Mike, it's perfect.
I think this really speaks to what we believe that recipe looks like if you're gonna be on the podium in online sports betting, is that, one, you have to have a brand that has got a ton of equity with sports fans, is very relevant, has an extremely broad reach, is mainstream, and has been around for a while, right?
Right.
So we know that that's the case for sure. You also have to have best-in-class product. That's super clear, and I think that's become abundantly clear as you've seen market share continue to consolidate at the top, and the two at the top right now definitely have had the best product and continue to iterate and innovate on that product. We made an investment in acquiring theScore and a big piece... That was a couple of years ago. The big piece of that investment thesis was the technology that came with it. It wasn't just the brand, it wasn't just the access to Ontario. theScore, for those of you who don't know, is essentially the ESPN of Ontario, of Canada.
And so we made the acquisition of that media company, got the brand, but of course, got the technology that came with it and the talent that came with it. They built out all of their own media products from the ground up on the media side, and they were in the middle of doing that for the betting side as well. Well, fast forward, it takes a while to do that, and so you have to have best-in-class product. And what we found when we launched initially with the Barstool brand, is that we had the top of funnel. We had the media integrations with Barstool Sports, and it was working.
If you look at the first two states that we launched in, in 2020 and 2021, Pennsylvania and Michigan, market share was well over 10% in both of those markets for many, many quarters. But you can only keep customers, retention can only be so strong if your product is not competitive. And we had third-party product, third-party platforms, fine partners, but there's a difference between having your own product and, and borrowing somebody else's. And when you're not in control of the product roadmap and the features and functionality, the UI, UX, then you're gonna lose people because there's better products out there. And so we got people initially, and then we started to leak them out. So we're now at a point where we have what we believe to be a very competitive product. It's been proven out in Ontario.
We've been live in Ontario on this platform for over a year now, and we've had a great success on media integration, retention results, and market share sustainability, both on the online sports betting and online casino side. We've migrated that technology and those platforms that we've built back to the U.S. We've been live on those for the last couple of months.
Right.
You know, it was just baseball season, so there was no real, fireworks going off about that. But we felt like now that we have a great product, we really need to lead with a brand that has the reach, that has the equity, and honestly, also has access to crazed fans, including their year-long fantasy sports database, which is over 10 million people. And so when you look at all of that together, we felt like that's a recipe that can win. We see that that is the recipe that is currently working in the U.S. And when we got to know the folks at ESPN over the course of the last several quarters, you really felt a tremendous amount of alignment in terms of, for the sports fan, that is continuing to ask ESPN why they're not in the betting business.
Because I think you saw there was some research that came out a couple of days ago, from one of your competitors, but it was actually a really good survey of information, and 80% of the over 1,500 people surveyed go to ESPN as their primary source for sports consumption. So that's a lot on the top of funnel. 80%, right? That's. So think about that across America, most people in this room would say the same thing is true. It certainly has been for me for decades. Now that you've got a great product, and you believe you can move people into that product, and you have the ability to retain them, and we'll talk a lot about the product, I'm sure. We feel like that's, that is the right recipe. And then lastly, ESPN wants to be in this business for two reasons: one......
They believe that we can win together. If you have great product, and you've got the brand, and you've got the commitment, and we have alignment, right? So the way that we structured this deal, it's not just a-- it's not an ad deal. It's not just cash out the door. There's also significant value of warrants every year, and so if the stock's not moving, there's no value. If the stock's moving, then there's value for Disney and ESPN as well. So there's a lot of alignment there, but there's also this other piece that ESPN has found to be true already, before even launching their own, ESPN BET branded product, is that the fans who consume sports, when you add an element of betting, there's a lot more engagement that happens. They pay closer attention. They spend more time in your digital products.
They watch Monday Night Football all the way throughout. They watch the halftime show if there's betting elements. And so for ESPN, obviously, they're very committed to this through the way we, the way that we structured the relationship. The fact that we're using their brand, I think, is sometimes getting overlooked. ESPN doesn't utilize their brand to not be a top player, and so they're committed, we're committed, and we feel really good about the recipe and the ability to succeed in the space.
So, you know, ESPN, as you know, has already done some smaller deals, basically link-out partnerships.
Yes.
And a little bit of branding stuff with other operators in the space. So we get this question all the time. I'm sure it's front of mind for a number of people sitting, you know, in front of us. You know, what are you going to have access to that these other partners haven't? Because, you know, those definitely subscale deals relative to what you've struck here, have not, you know, delivered, I think, as much as maybe people thought that ESPN bump was going to. So walk us through what are some of the things? You mentioned fantasy, possibly one, but what are you going to have access to that's new here?
Almost everything. So think about it this way. I think the question is not where will you see ESPN BET integration with the ESPN assets? It's where will you not, as opposed to the link-out deals that were in place before. And I think this question of how much value were, you know, the previous two partners getting, there's things that are said publicly, and then there's things that happened privately about the value that was being received, and I don't think there would be nearly as much attention on this announcement and this partnership if it simply wasn't working before. There's a lot of attention on what we're doing, and I think it's because everyone understands the power that ESPN brings, the value that they bring. And I think it really starts with the using of their brand, which I've talked about.
Sure.
That, that is different than anything that was in place before. But think about it this way, that you're gonna have access to top talent, that's going to be exclusively promoting ESPN BET versus anything else out there at ESPN. That was not part of those previous deals. We're gonna have access to their social media network, which is massive across the United States, their fantasy database, which is massive, over 10 million people and growing every year. Really important, I think, the integrations around editorial content, live broadcasts, Monday Night Football, NBA playoffs. You're going to have people talking about ESPN BET during these live games, and they have sports rights that are unmatched, obviously, across the United States. And so...
You have odds attribution, so any time that they're talking within editorials, story, storylines, any time that there's any mention of betting lines, futures, chances of the Tennessee Titans win the Super Bowl, it's all going to be attributed to ESPN BET. So it's really, it's everything, as opposed to an ad deal. And I think that's... Look, people in this room obviously aren't in the meetings that we have with ESPN that are happening daily, and we have a number of different work streams, from marketing to product, to launch plans, to PR, and it's very clear when you're in those meetings how important this is to ESPN. Now, Disney's got a lot going on right now, so this may not be the top of the list of things they talk about publicly.
I would tell you, within ESPN, this is a—it's a very significant priority, and you feel it, you see it, you hear it. I jump into a lot of these work stream calls, sometimes participate, sometimes to listen in, and I couldn't be happier with the, the energy, the resources. This is a strategic priority for ESPN, as it obviously is for us at PENN.
Can you help us, like, even go a layer deeper? Let's fast-forward, you know, two months from now when this goes live. What are we going to see as a customer? So when we talk about an integration, right, are we gonna? You know, we, we're actually able to open theScore. We're able to see, you know, we've got a, we've got a menu, and then you've got, you know, at the bottom, you've got a button, theScore Bet. It's going to take me, it's going to take me through-
Yes.
to your platform, right? Is it that level of depth? I mean, is there going to be an ESPN BET button in the ESPN app? Is there going to be a feed at the top of when I go to ESPN.com and, like, guilty as charged, I'm on there? Like, it's like, almost like a weird habit, where you just kind of like, "I'll just check theS core," and like... But is it going to be at the top of my web, like, web app, not even have to go into an app? Like, give us, give us that, that, like, feature set of, like, what am, like, how am I going to get into your back end?
Yeah, I mean, we're obviously not going to have everything I talked about done day one, right? But the, we're going to have a lot of it done day one. Think about the editorial and the live broadcast and all, all of the integrations into... And the talent. That all happens day one. The integration into the web and mobile web will be day one. So you'll be doing what you do, pulling up ESPN, and able to click onto ESPN BET and seamlessly go over to ESPN BET app if that's something that you're interested in doing. And then the integrations within the- ...Let ESPN media be the place where people go for scores and storylines and box scores, and if they're interested in betting, it'll be very intuitive, very easy to get over.
When you get over to the betting platform, it's very, it's going to be fast, seamless. All of the betting markets you're interested in, all of the teams, the league deals, we have it all, parlay bets. When you're in there functioning, you create your bet slip, and then you want to go back over to media to follow what's going on on college football day or NFL. You can do that, and your bet slip can follow you along. If you forget what you bet, you don't have to go back to the betting app. It's like everything's just going to integrate, and you'll be able to seamlessly go back and forth without even feeling like you're having to open up separate apps. It's just taking you between the apps seamlessly.
We've been doing this in Ontario for a year now, so this is not something that's like pie in the sky. Oh, it's going to take years to do this. Some of that will be done day one, some will be done month one, some will be month, done month three, and everything we've talked about will be done, certainly in between 2023 and 2024.
You do own theScore, which allows that, your control of that integration. So we talk a lot about control of the tech platform, right? When you control the tech platform and that media app, that's going to allow you to get your talent where it needs to be. So what's ESPN bringing in on the talent side in terms of, like, the back end to help you do this? Because you will still have to work with them and make sure... So, yeah, we get that there's warrants and we get the financial piece. But is there also... I mean, it sounds like it was some of the workflow things you talked about, but can you just talk about, like, are they dedicating people to this effort internally and help us just think about that a little bit?
Yeah, I mean, look, that, that's the... I was referencing earlier, and, I'm sitting here very comfortable, right? I'm in these meetings, and when I say there's resources in the room on both sides, it's significant. And so let's take the sort of product work stream. You've got dozens of people in the room on both sides working on these things. This is not a, Oh, I was told to go to this PENN meeting, and I got to do this thing. This is a strategic priority. It's very clear that they're excited about it and their name's on it, which means a lot. There's a lot of pride at ESPN, and, this is something that they've been working on for years behind the scenes.
They had to make sure they had buy-in all the way through their organization, of course. They have that now. They had to make sure that they could land the right partner. That took some time to figure out, you know, who was the right partner. Obviously, it turned out to be us. That's great. But the first meeting we ever had, I was shocked by how many people were in the room, and this is like their full-time gig, has been working on ESPN BET behind the scenes. So this is not a part-time role for folks. They're dedicated, they're focused, they're energized, and we are too. So we're, we're looking forward to launch.
James, yeah.
Not, not to go too far down the rabbit hole on, like, thinking to the future, but, Shaun has been doing a lot of, like, in-depth research. I've been doing some anecdotal research, trying to watch the U.S. Open. I've now signed up for, like, four different streaming services because they blocked ESPN on Spectrum. Does this agreement sort of contemplate the fact that the media landscape is changing rapidly, from ESPN's perspective, how people are consuming ESPN, where it's going to be available? Like, does this fit all that to, like, ESPN+? And if, you know, now I'm watching ESPN through Hulu, because that's the only way I can right now.
Yeah. Think about it this way, that anything that is branded ESPN will be supporting ESPN BET, ESPN+, the ESPN digital assets, their app, mobile, ABC. So if you're watching sports on ABC, that's ESPN. So, it all works together. Now, I'll let Disney talk about what they're doing with, obviously, on the media and linear side. There's a lot going on right now, but I... You know, as I sit here today, I'm-- they'll figure it out. They have, they will. And we know that the brand and the distribution and what they have from a sports rights perspective, it's unmatched. I don't think anybody in this room would disagree with that.
Maybe you want to follow up with James. But, you know, on the Disney earnings call, you know, Bob Iger made a comment. It was something like: You know, Penn stepped up in a very aggressive way and made us an offer that was better than any other competitive offers, you know, out there by far.
Yeah.
That's, I think, generated some discussions as to whether or not Penn was the highest bidder here. So, could you help us understand that a little bit more? Because we also know that these, you know, some idea of this package had been around for quite a while, and shopped in various forms. So, yeah, how did this all, you know, did this come together? What, you know, what does that comment really mean?
Yeah, well, I'm not going to speak for Bob Iger or anybody for that matter. I will tell you that all of the meetings that we've had with everybody at ESPN and Disney, all the way through this process, this was about the package that the partner was bringing to the table. So my understanding is that the financial portion of it, which again, was structured different than anyone else's, there's three-quarters of it per year is in cash, and 25% of that is in warrants for strategic alignment and incentive reasons, is that the financial portion of it was competitive. Maybe it was the highest. It wasn't the highest by a lot, if it was the highest, but let's assume that it was the highest, okay?
What comes with PENN, in addition to that, was they felt like we had a product that's been built for the North American markets, which it has been. This is not built for Europe and brought over, and now you're trying to sort of figure out what to do with it and build upon a European model of soccer and other sports that are more popular there. This was built for North America.... They went through very deep due diligence on our technology and our products and came out of those meetings very excited, and they've met with everybody. So that tells you a lot about what, how we feel and how they feel about the technology and about the product. I think we have a, a lot of alignment with them around this interface between sports media and sports betting, and what's the best experience for the fan, right?
Not what's best for the company, what's the best experience for the fan. Tremendous alignment in how we're thinking about that, which I covered a little while ago. Don't try to jam one into the other and let people who are there for sports media content, let them go do that. And if they're interested in betting, it'll be very intuitive and very easy to move over to betting. You can bet, and if you want to spend more time there, great, but if you want to go back to ESPN media, you can do that as well. A lot of alignment. And then I think as we introduced more people on our teams, there was a culture fit. There was alignment on vision in terms of wanting to be on the podium.
Neither of us are doing this deal to be in, you know, fourth, fifth or sixth place. We expect to be competing for the top. That's not going to be day one, but we expect to be able to, to compete for the top spot over time. And so that's a package deal that. And then, of course, the ESPN BET brands. I think most of the folks that they were talking to didn't. They felt like they wanted to lead with their own brands, and we were ready to lead with that brands. We had a great run with Barstool, but I think it became very clear to Barstool and us that they're just not, you know, they're not. We're not a natural owner long term because of how highly regulated our industry is.
We figured out a package that was good enough for all three parties to move forward, in a way that was good for them.
So let's walk through a couple of the financial components, and I'd like to give you guys a little kind of shout out or credit, because I think it was very clear the way you laid out some of your commitment here, both from a... We know the long-term economics of the model, but more how we think about it, you know, financially as analysts. So I believe those targets were, you know, the $150 million spend per year. That's, that is largely, I think, focused on the ad spend, the committed spend to ESPN. You talked about an incremental investment, roughly the same amount to-
Yes.
kind of one time to build the brand back up, you know, talk about, you know, kind of, I think, get your name back out there in other, in other channels beyond maybe just, you know, ESPN, and then a, some promotional commitment that probably sits, you know, above that level. So we think about those components, you know, specifically on the ad spend commitment, you know, you yourself had been... You know, we go back to the Barstool days a little bit. Probably had you here a year ago. You yourself had been, you know, skeptical, maybe is the right word on, "Hey, look, what are the ROIs on that?" Now, it's different when it's your brand and maybe your spend for that brand.
Yeah.
But, yeah, help us walk through that iteration, because Barstool was this really unique scene that you guys felt like you had found where you didn't have to get into this. Now you're in the malaise, like there is a lot of dollars. You know, we were playing with numbers that could be like $2 billion that are gonna get spent over a year, you know, calendar year, just on, you know, this type of brand spend and, and advertising spend. So help us understand kind of how did you come around on that? And, and you know, why is this gonna, you know, work better for you?
Yeah, well, I would say a few things about that. One, this has been an evolution, right? So what we know today is a lot more than we knew two years ago or three years ago. I think that there is a lot of value in a very strong, powerful sports media brand to be integrated with a sports betting, especially when it is under the same brand umbrella. We had a lot of early success with Barstool. We have 1.5 million digital customers today that we didn't have before we met Barstool. So just think about that from a CPA perspective. People are like: Oh, did you get a return? It's like we have 1.5 million that are in our database today that stayed with us after we moved on from Barstool.
So CPAs have continued to come down, and I've been very critical in the past about the arms race. And because if you were advertising at the beginning of football season in 2020 or 2021, I don't know that it was effective. You couldn't watch a football game without seeing 40 commercials from five different brands, and it was just like, your head's gonna explode. That has changed. It's dialed back. I think the promotional and marketing advertising environment a lot more rational today than it was a couple of years ago. And I would also say that when you're... Let's take the ESPN spend of $150 million a year in marketing dollars, outside of, obviously, just getting the brands.
All the integrations that we talked about, we're gonna get $150 million of value that you can just look on paper and say, "There it is. There's $150 million," through TV commercials and all the typical ad stuff. But a lot of the integration stuff that we're talking about, that's not in the 150. So that 150 that we're spending with ESPN, I would make the argument, given the commitment I know from both sides to winning here, there's likely to be a multiplier on that. So if you're thinking about how are they gonna compete, when you have an exclusive relationship with the number one name in sports in the United States, that has a multiplier effect. And so what we'll spend beyond that will be very focused on returns and CPAs.
You know, we're seeing a much more attractive CPA environment today than we saw a year ago, two years ago or three years ago, a much more attractive promotional environment. And I also think the time of year that we're launching, having it be mid-season is actually great. Not, I mean, it's really been driven by preparation, and we have to reskin the app and all of that. But it's, you know, we're gonna be cutting through what a lot of noise in September, tonight, Thursday Night Football, the first game of the year. We're launching sometime in November, and so I think we're gonna be able to make a lot of noise, get a lot of attention. And you're coming in at a point in the year where people have probably burned through most of their free bet promos and deposit matches.
And so to be able to, to sort of reload mid-year with a new app and a new experience that's fully integrated with ESPN, I think that speaks to the top of funnel. Based on what we're seeing in Ontario and all the enhancements we continue to make on the product, we feel really good about our ability to retain once we get people in the top of funnel.
I think one of the big investor points that has brought people back to this space, right? Obviously, it was, you know, a huge run on that kind of front end, incredible growth piece. Then things cooled off, you know, a year ago as everybody sort of, you know, things kind of came back to Earth on growth, and we all came back to work, apparently, and all those things. And, but one thing that's really helped turn the corner for the space is the rationalization on costs and promotions, and particularly, you know, the CAC side of the equation. So, do you worry about destabilizing that at all?
I mean, you yourself are going to be out there pushing this, and the question we get back is like: Well, they're doing it, you know, what does that mean for every-- what does that mean for the landscape? Is this sustainable, or did we just push back the profitability curve for the entire industry? So how do you... Do you worry about that? I mean, you kind of got to do what you got to do, but-
Yeah.
You know, how do you keep that in check?
Yeah. Look, we're not going to be out spending for the sake of spending. We're going to be spending if we're seeing really attractive CPAs, and we're seeing retention. And you're going to spend, if that's what you're seeing, and you're going to build a business that can compete. And so that's what we're going to do. I, I really can't speak to what level of disruption that will create for the marketplace. We're trying to grow the market. That's very important to us. There obviously will be some taking of business or sharing of business with others. That's naturally going to happen. But, you know, we're not-- We're going to be measured, as we always are. We're not going to just... We don't have a dollar spend figure that we're just going to go figure out how to hit, right?
That we're going to do this in a way that if we're seeing progress, you're seeing momentum. There's going to be pieces of what you've spent on that are working and pieces of what you've spent on that aren't working. So do less of the things that aren't working, do more of the things that are working. And, look, we're probably, from just, like, a cycle perspective, we're probably a year to 18 months behind where, let's call it, DraftKings and FanDuel were or are, right? So, like, they, they were at this point of like: Hey, we can, we can see the turn down the road, 18 months from now, and that's probably where we are now. But we're, we're in... You know, we're launching this to, to win. We're launching this to, to be a real top player, and so that's the focus for 2023 and 2024.
I think 2025, you know, you should expect us to be making that turn from, you know, break even and starting to go positive.
Can we just talk about the iGaming strategy for a minute, right? Because ESPN, sports first brand, what's the move for you on the iGaming side? Still, you know, big part of the business. It's a lot of dollars and can be pretty valuable on the margin side as well. And it was an area where you were pushing before-
Yeah.
You know, this, this change and rebrand, you know, came along. So kind of where, how are you - what's the go-to-market strategy? And then could you give us a little bit of color on, like, how this has worked in Ontario? Because I think we actually have some pretty good-
Yeah.
iGaming numbers, but again, that's a sports first brand.
Yeah.
So, you know, this may work, but we may not know it works.
Yeah.
Help us understand that.
Look, it's a, it's a great question, and, you know, we, much like on the online sports betting side, same thing in iCasino. We really haven't had a good product in the U.S. until two months ago. We've had that great product for both sports betting and online casino on the same platform in Ontario for over a year now. And what we've seen in Ontario since we've launched is that our online sports betting market share, whether you're looking at handle or win, matches our online casino market share for handle and win. So they're both double digit. They have been from day one all the way to where we are now, despite when we launched in Ontario, that was a gray market for a long time, and so you're competing against those same operators for market share, and we took a strong position.
They don't report by operator. My guess is we're probably third in the market there, and we haven't lost that position despite the number of operators, legal operators, going from 25 to close to 70. And so we feel really good about having online casino platform within the online sports betting platform. We'll eventually launch a standalone online casino app as well, but for now, they're in the same brand-new platform. And so we think the success that we're seeing in Ontario, we can duplicate that here in the U.S. in terms of how successful can you cross-sell folks from online sports betting to online casino? I think if you, if you look at the online casino market share trends, they have largely mirrored online sports betting success or lack thereof.
As some of the other competitors have fallen off in online sports betting share, they've fallen off in online casino share. And as others have picked up in online sports betting share, they've picked up in online casino share. And so, you know, this is going to be... ESPN obviously is a sports first brand and sports first approach, but that is what feeds the online casino, part of the business as well, primarily.
Will it be? Do we know yet? Will it be a Hollywood, will it be... You know, Hollywood will be the branding for the casino product?
Yeah. That-
That'll be how it sort of stands?
That's right. So you'll have Hollywood Casino as a casino option within the ESPN BET app. So you can seamlessly, just like today, it's Barstool Sportsbook, Barstool Casino, it'll be ESPN BET, go into Hollywood. We felt like that was probably a better approach, given that the Hollywood brand represents close to two-thirds of our land-based properties, and so it just creates more ability from an omni-channel standpoint to cross-sell. So if you're within Hollywood online casino, to send an offer to somebody to go to a land-based casino that has the same brand, makes a lot of sense, versus a disconnect between the online casino brand and the brick-and-mortar casino brand. So that's the plan. I actually think longer term, that, having...
I think having a single online sports betting brand is the way to go, but I think having multiple online casino brands is likely the way to go. Today it's Hollywood, and we'll—it'll be Hollywood, but we'll probably have some other online casino brands in the mix as well.
Interesting. All right, I'm running out of time, and I could go on for we definitely needed an hour for this, not 35 minutes. I want to talk about product very quickly on the digital side. You know, like you said, best product has been... I think we've seen an acceleration in the importance of that, you know, as we've kind of watched our own market share trends and done our own work on that. So what will we see? You know, I mean, we're-- you're live, but we're not, you know, it's not as visible, and it's not live in New York, unfortunately.
Yeah.
So, but how would you gauge or rate your own, you know, your own product features as you think about the things that are starting to really matter? Same Game Parlays, you know, in-game betting, you know, the speed of all this stuff has really picked up.
Yeah.
Kind of, how would you rate where you're going to be when you make this transition, and then where you want to be beyond that and sort of that tech roadmap?
We're in a great spot. Listen, we're in New York, so maybe a lot of people in this room haven't spent time on our app since we migrated over in July. I would recommend you try it out in New Jersey, not a far drive. I think you'll be blown away, impressed by how fast, how intuitive. We have all the markets, all the betting options, Same Game Parlay. We actually just launched micro-bets with Simplebet a few days ago. One of the beauties of owning your own tech stack is that you can make decisions like, "Hey, do we want to add micro-bets?" We made that decision a month ago, and now we're live.
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So you can just do things a lot faster. You can innovate and iterate. One of the other things that we haven't been able to do, as we were on third-party platforms, is this whole customization of offers. So just think about, you know, as an example, I think this is a pretty exciting example. If you are an ESPN season-long fantasy player, and you don't spend as much time on the ESPN media app, but you spend a lot of time on the fantasy app, there's plenty of people who do that. Chances are you're probably more interested in player-type prop bets if you are going to place a bet. And so our...
If we know that you're an ESPN fantasy, fantasy player, and we know that you haven't placed a bet yet, to offer you a free bet on a micro market or on a player prop, on a same-game parlay, but more player-focused versus game-focused, is pretty powerful. So when you have your own promotional engine and event engine, and you can target customers based on their behavior, as opposed to, we had to just do shotgun promotions.
Right.
You know, Steelers minus four has been boosted. That goes out to everybody. We have no idea if you like the Steelers or not. Now we can target individually. So the level of customization on the marketing side is tremendous. The ability to move faster and control what that product roadmap looks like, and those priorities shift, and so you can say, "Take those two things off, throw these three, three, three things on." When you're working with third parties that are in the B2B business, that could set you back 15 months. That might set us back, you know, three weeks or four weeks. So it's really all of that, that I think having your own technology, it's a must if you're going to compete at the top levels.
Largely, you're already here, but single app, single wallet across all states that you're in.
Well, it was before and is now. Matter of fact, thank you for reminding me, 'cause we've been asked this question a few times, "Oh, are people going to have to, you know, download the ESPN BET app if they already have, they're on Barstool Sportsbook today?" And the answer to that is no. So the Barstool Sportsbook today is on our new technology, the new platforms. And so when we go live in November, it's gonna, you're gonna wake up and get an alert to say, "You need to update your app." You update the app, and it turns from Barstool Sportsbook into ESPN BET. All of your account information, your wallet, deposits, your bets, your bet slip, everything goes over with you that day, and it's ESPN BET.
So, that 1.5 million people that we've acquired with our friends at Barstool, their experience over to ESPN BET is going to be 100% seamless.
So much more I could do, so it's hard to pick one out of, like, the entire page of questions that I have. But, let's, you know, we still are at a gaming conference, so, so let's do, let's do brick and mortar for one, right?
For 56 seconds.
Yeah, even 55 seconds. You know, the... Just give us the quick reminder of where we are with the core business, the regional consumer. I think in general, you know, the steady as she goes and the margin, you know, I think holding onto your margin profile was the reiteration on the second quarter, around 36%. But just give us the quick, you know, thing, and Felicia, if you want to-
I was going to say, I've been talking the whole time.
Get yours in. Maybe now is the time.
I mean, look, the thing that we've been talking about, you know, for a while now is consistency, and, you know, we reported a great quarter. Unfortunately, it got kind of backstage to this huge announcement, but, you know, we just continue to see consistent performance. You know, we talked about and when we reported in early August, seeing, you know, early signs in August of continued consistency, like you said. Our 36% EBITDA margins are sustainable, despite, you know, some still bumps in the economy, despite the additional supply that we're seeing in markets. And so we feel comfortable with the guidance we provided at the beginning of the year. And nothing's really changed from that perspective.
Great. Well, unfortunately, very unfortunately for me, that's what we have time for. Jay, Felicia, thank you for doing this. Again, thank you for spending the day with us. Really appreciate it.
Thank you.
Yeah. This is...