Gambling on Gambling

Will the Action Network make a billion on sports betting or be a total bust?

"Bet Sports Now!" sign at The Monmouth Park Sports Book is viewed on the first day of legal sports betting in New Jersey on June 14.
The Monmouth Park Sports Book is viewed on the first day of legal sports betting in New Jersey on June 14. Dominick Reuter/AFP/Getty Images

Colin Cowherd has a theory about the NFL. When a good quarterback gets blown out on national television, the Fox Sports host believes, he’s likely to lead his team to victory the following week. Cowherd recently shared this hypothesis on Chad Millman’s podcast, explaining that savvy sports fans could make a mint by following this piece of betting advice. Millman—

Millman—who left his perch as a senior executive at ESPN last year to become the head of media at the sports gambling startup the Action Network—asked his colleagues to run the numbers. Alas, Cowherd’s theory is wrong. Since 2005, good offensive teams are just 11–12–4 against the spread the week after a prime-time blowout.

While these sorts of sports debates have existed forever, their contours changed in May when the Supreme Court overturned a decades-old law that limited most legal sports gambling to Nevada. The decision paved the way for states to legalize sports gambling and, in the process, potentially revolutionize the way sports are consumed and covered in the United States.

As Jordan Weissmann explained in Slate in 2014, nobody knows how much money is bet on sports in the United States each year. What we do know is that Nevada sports books took nearly $5 billion in bets in 2017, and that the volume of illegal and offshore wagers is certainly much, much higher. The Action Network’s research suggests between 8 million and 10 million Americans bet on sports more than once a week. Now that legalization is afoot, that number will surely grow, and Action believes it’s in position to ride that growth to profitability.

A corkboard in the company’s midtown Manhattan office tracks the status of legislation across the country. Eight states, including Nevada, have already legalized sports gambling in some form, while a host of others are considering bills. Action’s CEO Noah Szubski told me he expects around 35 states to legalize sports betting in the next several years.

Action, which was created last year by the Chernin Group, a holding company with stakes in Barstool Sports and the Athletic, doesn’t want to take your wagers; it wants to help you place them. Two weeks after the Supreme Court’s ruling, Action debuted a gambling show, I’ll Take That Bet, on ESPN’s new streaming service, ESPN+. It’s now looking to create similar content partnerships with the major pro sports leagues, and has kicked the tires on launching a Cheddar-style sports betting network that could air on social media platforms like Twitter, streaming platforms like Roku and Apple TV, and perhaps even traditional cable providers. Action isn’t alone in thinking there’s money to be made here. The Vegas Stats & Information Network, which last year brought on broadcasting legend Brent Musburger, airs 13 hours of daily gambling-themed sports talk on Sirius satellite radio. Other sites, like and, have launched recently to cover the expanding industry.

All of these companies are flinging themselves into a totally unsettled field. Sports betting will get sorted out state by state, with each legislature settling on different provisions. Mississippi, for instance, has made mobile wagering illegal outside casino property—a huge damper on the potential growth of the industry there. (In the United Kingdom, 80 percent of soccer bets get placed via mobile devices.) The major North American pro sports leagues, meanwhile, are still working through what legalization means. The NBA has signed a sponsorship agreement with MGM Resorts, making it the first of its brethren to partner with a sports book. Major League Baseball has also joined the NBA in lobbying to get a percentage of all the money bet on their games. The NFL, by contrast, has been less aggressive. And when asked about gambling recently, University of Michigan football coach Jim Harbaugh replied, “Don’t gamble. Don’t associate with gamblers. Avoid it like the plague. Don’t walk away from that. Run.”

Those notes of caution have done little to dampen Action’s enthusiasm. If this is a gold rush, Millman says, then Action is providing “the picks and shovels” to bettors hoping to strike it rich. Zach Leonsis, the general manager of Monumental Sports Network, an investor in several gambling companies whose family owns the NHL’s Washington Capitals and NBA’s Washington’s Wizards, put it to me another way. “Everybody wants to be the Jim Cramer,” he said. “Everybody wants to be the CNBC of sports gambling.”

The Action office has a startup-y vibe: concrete floors, open floor plan, lots of TVs on the walls. Next to the main room is a makeshift studio, where the show I’ll Take That Bet gets produced several mornings a week. The show centers on 10 predetermined bets, with two Action personalities taking turns picking sides. On the morning I visited, Millman made his picks from the studio; Chris Raybon, a former accountant whose Twitter bio includes the quote “Let’s get this shmoney!”, appeared via video. “What’s with the tie?” Millman asked his co-host as the show began. “I just wanted to look good at your funeral because I’m about to murder you!” Raybon shot back.

Millman took the favorite Mexico to beat South Korea in a World Cup matchup; Raybon liked 66-to-1 odds for the Pittsburgh Steelers’ trio of Ben Roethlisberger, LeVeon Bell, and Antonio Brown to lead the NFL in passing, rushing, and receiving. It felt a lot like any other debate show on ESPN, which was precisely the point. For Action, I’ll Take That Bet is a potential gateway to a huge pool of potential customers—people who are already betting or have been primed to bet by virtue of the rise of fantasy sports. ESPN, in turn, gets to test out a program dedicated solely to gambling, to see how it wants to handle a subject area that has long been considered taboo.

ESPN, like every other mainstream sports media outlet, has tended to treat gambling as a disreputable side venture, one that’s shunted onto a little-promoted vertical on its website (that Millman pushed to create) and that gets tittered about on the late-night SportsCenter.
But the network is clearly experimenting with ways it could feature gambling more prominently on the air, including highlighting the betting expertise of one of its anchors, Doug Kezirian. The competition is ramping up, too, as Fox Sports 1 reportedly has a betting show in the works, and Sports Illustrated launched its own gambling vertical just this week.

As I watched the taping of I’ll Take That Bet, the production team reminded an intern that, per instructions from ESPN, he could not write out “Pittsburgh Pirates” in an on-screen caption; “PIT” had to be used. An ESPN spokesperson told me different leagues have different policies regarding how their official names and marks can be used in gambling-related content, so the network has a strict policy to use only tri-letter codes. At this point, it’s clearly more important to ESPN—which has rights deals with the NBA, NFL, and MLB—to keep those leagues happy than to develop programming for viewers who want to bet on basketball, football, and baseball. “We can recognize that as the world evolves here, there will be more and more interest in that space,” John Lasker, ESPN’s vice president of digital, told me. “But there’s not a sketched-out plan to serve that need at this point.”

That leaves an opening for Action, which wants to attract sports fans with wall-to-wall betting content that captures the culture of an obsessive world. Millman has hired the likes of former All-Star catcher Paul Lo Duca and BlackJack Fletcher, who quit his job as a criminal defense attorney to become a full-time sports betting pundit. The network’s frattier personalities are paired with more traditional reporters, like longtime basketball writer Matt Moore and ESPN’s former golf writer Jason Sobel. In early August, Action brought on NBA commentator Rob Perez, who comes to the company bearing nearly 250,000 Twitter followers.

Action’s written content has run the gamut from a basic glossary to a betting guide on the Scripps National Spelling Bee to a deep dive into the card game that led Washington Wizards teammates Gilbert Arenas and Javaris Crittenton to confront each other with guns in the locker room. The goal here is twofold. First, familiarize sports fans with the language of betting, making terms like parlay and reverse line movement as mainstream as pick-and-roll and pass rush. Second, make gambling feel at once cool and commonplace, erasing the image of bettors as lonely old men wagering compulsively at off-track betting facilities.

The company also has a database of public betting information going back decades, which allows it to run the numbers on things like Cowherd’s prime-time blowout theory. Then there is the Action app, which enables fans to track their bets. (The company says 9 million individual bets have been registered to date.) Come football season, Action will start sending individualized alerts offering advice on when to hedge or double down. Given that, 80 percent of sports bets globally are made after a game starts, per the sports data company Sportradar, that kind of functionality is crucial.

For Action to succeed, it needs to find a larger audience that’s looking for more than the latest odds. “There’s an excess of supply in terms of sports content and the question anyone has to wrestle with is what are you going to do differently so a customer goes through you and not ESPN or Fox or whoever the big media companies are,” said Chris Grove, the managing director at the research and consulting firm Eilers & Krejcik Gaming. “How much do bettors want to live in the betting culture? Can it gain cachet? If that happens, then you’re looking at narrow companies that can do really well.”

But even if betting never goes mainstream and Action doesn’t build an enormous audience, it still has an opportunity to generate big revenue. Sports books in search of customers pay big fees for referrals. That is how a site like has operated so profitably over the years—by feeding new bettors to offshore bookmakers. In the United Kingdom, this “affiliate model” can be incredibly lucrative. Market rates for referral fees in the U.K. range from 100 pounds to 200 pounds for a single customer, in addition to 25 to 30 percent of that customer’s lifetime wagers.

Szubski, Action’s CEO, imagines a future in which the company’s app allows users to convert in-game gambling advice into a bet at an affiliated sports book in mere seconds—with Action collecting a percentage. “If I have 8 million qualified users spread around the country and each one can legally bet through a book and there’s an affiliate fee and a percentage of lifetime money, it’s like happy fucking birthday,” Szubski told me. “That’s the billion-dollar business.”

For now, this is all still notional. Action has yet to partner with any of the sports books that have opened since the Supreme Court’s ruling. “We’re very much heads down on building the product and building the content team,” Millman told me. “Most of the casinos are figuring out how to operate, and we just haven’t been aggressive about that particular part of the business yet.”

Bill Adee, the former sports editor at the Chicago Tribune who’s now the chief operating officer at VSiN, chuckled when I asked him about his company’s interest in the affiliate business. “You can see why this was an attractive business model, coming from the newspaper industry,” he said, noting that VSiN intends to make affiliate revenue a prominent part of its business model. Adam Small, an entrepreneur who has worked in the affiliate business for years—mostly with poker sites—launched his new site with affiliate revenue in mind. “People don’t want to say it publicly, but the model works better than a traditional news advertising model,” he said. Catena Media, a European company that specializes in lead generation for casinos, also bought this year for the express purpose of capturing an audience for its affiliate business.

There is a natural follow-up question here: If bettors are such a valuable commodity, wouldn’t the biggest sports media companies want to cash in? ESPN, which like pretty much every other cable network has been hemorrhaging subscribers, comes to mind. When I explained my understanding of the affiliate business to Lasker and asked if ESPN was having discussions about it, he told me my understanding of the concept was “sound, but there’s nothing on the record I can say to you about ESPN’s thoughts or pursuits there.” (He declined to add anything off the record.)

Michael Daly, Catena’s general manager in the United States, told me he’d like to partner with ESPN and other large sports media companies to help them navigate the affiliate world. “Undoubtedly, someone is telling them they can get into this business, but the biggest challenge for a big company is the regulatory and compliance side, and the differences in every state,” he said. Small told me he expected ESPN would start selling ads to sports books but avoid the likely more lucrative affiliate model, in part because the major sports leagues ESPN does business with might consider such an association too risky or unseemly. “There’s still a paranoia of association with the mafia and illegal activities,” Small said. But he acknowledged that if ESPN did get into the affiliate business, “They could crush.”

For now, ESPN is happy to let someone else take all the risk. On the day I visited Action’s headquarters, ESPN had sent a photographer to take portraits of some of the talent. Lo Duca was there, and so was BlackJack Fletcher, dressed in a cowboy hat and a red-sequined jacket.

As I sat with Millman in the studio, the photographer clicking away outside, I asked him what Action’s biggest hurdle was. “Time,” he told me. It’s not hard to imagine, as sports betting grows more commonplace and as more states legalize the practice, established media brands will try to take back whatever ground they’ve ceded to upstarts like Action. And if Action has early success, then those established brands will take on that task with even more urgency.

Action’s challenge, then, is to establish itself while it still feels too dangerous for the big companies to do so—to build a big enough audience that it can’t be wiped off the map if and when others make their moves. “ESPN is going to move into this and that’s going to be enough for some people,” Matt Restivo, Action’s chief product officer, told me. He added, “I’ve got to build a better app than ESPN.”