Online sports betting company DraftKings Inc (DKNG  ) has been a sector leader since it first launched. Its recent quarterly financial results showed strong growth and raised guidance.

A highly anticipated sportsbook competitor could be something to watch for DraftKings investors.

What Happened: Through a licensing deal with The Walt Disney Company (DIS  ), casino company PENN Entertainment (PENN  ) launched the ESPN Bet sports betting platform on Nov. 14.

The betting platform will be promoted on ESPN shows and by several of their leading personalities.

ESPN Bet launched in the following 17 states: Arizona, Colorado, Iowa, Illinois, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Maryland, Michigan, New Jersey, Ohio, Pennsylvania, Tennessee, Virginia and West Virginia.

"We are extremely excited to announce the planned launch of ESPN Bet prior to the active Thanksgiving week sports calendar that include the NCAA college football rivalry week and the Super Bowl rematch of the Kansas City Chiefs and the Philadelphia Eagles televised on ESPN's Monday Night Football," Penn Entertainment previously said.

To help kick off the launch of ESPN Bet, the company is offering several promotional offers to customers. ESPN Bet is offering $200 in bonus bets for users who place at least one wager. The company also has a $1,000 100% deposit match offer.

ESPN's Senior Product Manager of Sports Betting, Michael Maghsoudi, highlighted how ESPN Bet shot up to the top of the app charts.

"Still here. Still 80+ spots above the next sports app in the overall charts. But the haters will tell you every app in history goes to #1 overall, no biggie!" Maghsoudi tweeted.

Maghsoudi said the launch of ESPN Bet marked "the beginning of ESPN's journey into sports betting."

"This is a natural extension of ESPN's mission to serve sports fans - and now sports bettors."

With many sportsbooks for bettors to choose from, ESPN Bet has one item that could differentiate itself from the competition.

One of the rising in popularity bet options for NFL games is anytime touchdown, which pays out if the selected player scores a touchdown in the game. ESPN Bet is offering two-way betting on anytime touchdown, allowing users to bet on a player not scoring a touchdown.

Competition for DraftKings, Others: Sports betting company DraftKings is one of the companies dominating the sector and is closely watching the ESPN Bet launch.

DraftKings hosted an analyst day on Nov. 14, the same day ESPN Bet launched.

Guidance from DraftKings at its investor day may have been conservative according to Needham analyst Bernie McTernan.

The analyst, who has a Buy rating and $50 price target, said the company doesn't often provide upside from new state launches.

"DKNG has also made improvement to its products that resulted in market share gains," McTernan said.

While ESPN Bet could provide competition, the total addressable market for sports betting could continue to grow according to Benchmark analyst Mike Hickey.

The analyst, who has a Buy rating and raised the price target from $37 to $41, said DraftKings has strong momentum and industry leadership in the space.

"The company's strategic focus on product innovation and competitive differentiation positions it well to capitalize on the significant TAM, which is expected to grow from $20B to approximately $30B by 2028," Hickey said.

The product differentiation and path to profitability stand out for DraftKings, Guggenheim analyst Curry Baker said.

The analyst, who has a Buy rating, raised the price target from $39 to $45.

DraftKings is a "share taker" due to its strong product, tech, data, customer service, scale and brand, Baker added. "We continue to believe DraftKings is well-positioned to capture a significant share of the rapidly growing North American Online Sports Betting and iGaming markets."

The recent launch of ESPN Bet and new promotional offers saw Morgan Stanley analyst Stephen Grambling lower the price targets on several sports betting stocks.

"We are adjusting EBITDA estimates across CZR/MGM/DKNG/ESPN Bet/FanDuel digital businesses to reflect recent reports and potential for incremental promotions amidst new entrants," Grambling said.

Grambling lowered the price target of MGM Resorts International (MGM  ) from $42 to $40 and said the company's BetMGM joint venture could be impacted by the ESPN Bet launch.

"BetMGM has lost decent share over the past year and we anticipate BetMGM will deploy some promo/marketing investments to attempt to reinvigorate market share at the cost of profits over the next couple of years."

DKNG, PENN Price Action: DraftKings shares trade at $36.47 versus a 52-week trading range of $10.69 to $38.03. Shares, which recently hit new 52-week highs are up over 230% year-to-date in 2023.

Penn shares trade at $24.56 versus a 52-week trading range of $18.35 to $37.67. Shares of Penn are down 16% year-to-date in 2023, but up 19% in the last month of trading thanks to quarterly earnings and anticipation for ESPN Bet.