With ESPN striking a lucrative and sweeping gambling deal with Penn National, questions instantly have emerged as to the connection between reporters that traffic in knowing things just before they happen and consumers who would very much like to act on that information for betting purposes.
Michael McCarthy of FrontOfficSports.com reports that ESPN will “implement strict lines of demarcation between journalism and sports betting,” and that ESPN’s insiders “will be kept far away from gambling-focused programs.”
Even if they don’t appear on shows that focus on gambling, their market-moving information will take on a different vibe, now that ESPN has a $1.5 billion deal with Penn National.
Before the NBA draft, Shams Charania’s reporting regarding a possible curveball to be thrown by the Charlotte Hornets with the second overall pick caused the betting market to shift dramatically. His employment by FanDuel, a leading sports book, raised concerns regarding the extent to which reporting can morph into touting.
In Charania’s case, any bettor who acted on his claim that Scoot Henderson was “gaining serious momentum” to go No. 2 by placing a wager with FanDuel ultimately gave FanDuel free money.
ESPN has a small army of reporters and insiders. Adam Schefter (pictured) spends nearly every waking moment trying to report on transactions that will be inevitably announced not long after his tweet — sometimes by just a matter of minutes. (Some teams, as we’ve explained in the past, specifically engineer their announcement to give Schefter the five-minute window to be credited with “breaking” news that is about to be officially unveiled anyway.)
Who has that information before Schefter tweets it? Who is acting on it? Will Schefter tell Penn National before tweeting it, so that they can adjust the odds as to, for example, a player’s next team or some other proposition driven not by what happens on the field but decisions made by humans?
There’s also a chance for chaos. Look at what happened just yesterday. ESPN initially reported that running back Kareem Hunt was expected to sign with the Saints. Then, ESPN reported that Hunt had left New Orleans without a deal. Then, apparently to make the initial error seem less egregious, ESPN reported that Hunt left New Orleans because the Colts, in an unexpected twist, had suddenly offered Hunt more money. This created the clear impression that Hunt was about to sign with the Colts. Then, ESPN reported that the Colts are considering other running backs in addition to Hunt.
While those reports came from multiple different reporters, it’s all originating under the ESPN umbrella. On Tuesday, that umbrella got turned inside out by a strong gust of wind.
It’s just one of the various challenges that ESPN will face as it adapts its broader reporting function to its new and highly lucrative relationship with a sports book. With specific employees having information that can move markets — and with the possibility that some of that information will turn out to be incorrect — how ESPN handles and presents that information will become critical to how ESPN does, or does not, unduly influence betting trends and betting markets.
