Disney and Legal Gambling in Florida

Though headquartered in California, the Walt Disney Company wields enormous significance in the state of Florida. In fact, the company’s influence extends into more areas than some might realize, including into legal gambling in the state. For many decades Disney was a steadfast opponent of gambling. However, recently the company has begun to change their stance to a more favorable one.

Walt Disney World in Orlando first opened in 1971. It is the biggest entertainment resort complex in the world, covering 40 square miles. Unsurprisingly, it is the largest contributor by far to Florida’s tourism industry. It is also the largest single-site employer, not just in Florida, but in the entire United States. Disney is additionally a significant source of charitable giving, volunteerism and philanthropy, not just in central Florida but also around the state and beyond.

Of course, Disney is about more than just theme parks. The company is a gigantic multinational mass media and entertainment conglomerate. It owns multiple film studios and production companies, television and cable networks, streaming services, publishing divisions and more. As a result, “The Mouse” exerts considerable influence wherever it operates, which is just about everywhere.

Disney and the Seminole Tribe’s influence over Florida gambling

That impact is particularly evident in Florida, especially when it comes to politics and business. It’s no surprise, then, to learn that, over the years, Disney has frequently inserted itself into negotiations over legal gambling in the state. It is safe to say that perhaps only the Seminole Tribe of Florida rivals Disney’s influence when it comes to the fate of gambling in Florida.

The Seminoles have managed to open multiple casinos and gaming resorts in Florida over recent years while battling against other forms of non-tribal gambling in the state. Meanwhile, Disney has for a long time generally opposed any type of gambling. Such history proves intriguing amid the larger cultural shift in America toward greater acceptance of gambling, including sports betting.

All of this is worth keeping in mind as Florida contemplates future gambling expansion, including the legalization of sports betting.

The Disney brand

Walt Disney World calls itself “The Happiest Place on Earth,” a cheerful, “magical” place where dreams come true and conflicts never arise. Such a slogan recalls how the Walt Disney Company has always foregrounded overtly upbeat and positive messages in its marketing and products.

Theme parks like Walt Disney World and Disneyland Park, which opened in California in 1955, are family-oriented tourist destinations. They are also significant popular culture symbols representing what might be described as “traditional” values dating back to the company’s origins.

The company’s mission statement highlights its purpose “to entertain, inform and inspire people around the globe through the power of unparalleled storytelling.” Meanwhile, Disney Careers highlights a much-cited list of core values shared by the company’s employees:

Films, television shows, and other entertainment media produced under the Disney brand often also reflect these same values, or at least are intended to do so. Sometimes, however, the company’s stance has struck some as possibly out of step with a changing world, too steeped in nostalgia to adapt.

Relatively strict codes of conduct for Disney employees over the decades might suggest as much. For example, it wasn’t until 2000 that Disney dropped its ban on male employees wearing facial hair. It was not until 2021 that employees could show “appropriate visible tattoos.”

There have been other recent instances of Disney making overt moves to reflect greater inclusivity. The rollout of Pride-themed merchandise at Disney Parks during LGBTQ+ Pride month in June 2021 has been cited by some as an example. That said, at the time some suggested the company could do more to update its overall messaging and support of the LGBTQ+ community.

2022: DeSantis vs. Disney

In early 2022, that latter issue arose again for Disney. It resurfaced during debate over the controversial Florida House Bill 1557 prohibiting classroom instruction on sexual orientation or gender identity.

When it became public that Disney had earlier contributed to the campaigns of the bill’s sponsors, employees objected. Disney subsequently stated its opposition to the legislation. The bill passed and Gov. Ron DeSantis signed it into law. Disney responded by stating it would support efforts to challenge the law. The company also announced it would stop contributing to Florida political campaigns.

Gov. DeSantis and some Florida lawmakers responded to Disney’s announcement by swiftly passing a bill eliminating the special district where Walt Disney World is located. Gov. DeSantis signed that bill into law in April 2022. In February 2023, rather than eliminating the special district, lawmakers passed a law that gave DeSantis control of the district to replace members on board of the special district. But Disney struck a deal with outgoing board members that essentially handed over control to the company.

In April 2023, Disney filed a lawsuit, alleging DeSantis tried to “weaponize government power” over the company, threatening Disney’s future in the region.

In May 2023 due to this friction, Disney pulled the plug on a new $1 billion office complex in Orlando that could have created more than 2,000 jobs.

Such developments illustrate the prominence of Disney in Florida politics. They also demonstrate the challenges the company often faces when managing not just its business, but also its brand and influence.

History of Disney’s opposition to Florida gambling

Disney’s evolving stance toward gambling in Florida provides another example of the company finding itself adapting in response to a changing world. Of course, such evolving is a fairly recent development for Disney, as the company has been unambiguously anti-gambling for most of its history.

Of all the ways Disney has gotten involved in Florida politics over the years, its efforts to oppose gambling expansion in the state has been especially conspicuous. It is fair to say Disney’s commitment to family-friendly entertainment informed its historically anti-gambling stance, providing the company standing from which to launch moral objections. But Disney’s opposition to casinos also obviously has reflected the company’s interest in the bottom line, given how a preponderance of Florida casino resorts directly compete with the company for tourism dollars.

Indeed, the battle over Florida gambling has lasted decades, with the Seminole Tribe representing an ever-present antagonist for Disney.

How Disney and Seminole Tribe agreed on Florida gaming

Back in 1979, the Seminole Tribe opened the first large-scale bingo hall in the country. Later in 2004, the tribe opened its two casinos in Hollywood and Tampa. Then in 2007 the tribe acquired the Hard Rock International franchise. It was the first instance of a Native American tribe purchasing a major international company. The Seminole Tribe had become a major player in the casino industry.

In 2010, Florida negotiated a tribal-state compact with the Seminoles. Doing so paved the way for the tribe to offer additional gambling games and to open more casinos. As lawmakers considered authorizing new properties, Disney made its objection clear by contributing $2.5 million to casino-opposing candidates during the months preceding the 2012 elections.

That was the most Disney had ever spent on Florida campaign contributions. That amount would increase markedly in 2014 and 2016 though. Then in 2018, Disney spent a whopping $28.3 million during that year’s election cycle, with most of that directed toward supporting the passage of the so-called “anti-casino” Amendment 3.

The amendment required Florida voters to approve any new non-tribal casinos in the state. Requiring such approval would make any new casino expansion significantly less likely to occur. The amendment passed by a wide margin with 71% of voters supporting it.

Interestingly, Disney and the Seminoles were on the same side in their support of Amendment 3. The tribe also opposed creating conditions making it easier for other commercial entities to enter the Florida casino space.

As noted above, Disney has now stated its intention to pause campaign contributions going forward. That may or may not become relevant should new gambling-related legislation be brought forward.

Disney’s ESPN embraces sport betting in 2023

Another important factor that has more recently influenced Disney’s stance toward gambling is the company’s connection to the sports entertainment company ESPN.

In 1995, the Walt Disney Company acquired the media company Capital Cities/ABC in a deal worth $19 billion. Following the deal, the company rebranded as the ABC Group, then the Disney-ABC Television Group. In 2019, it became Walt Disney Television, aka Disney’s General Entertainment division.

That transaction meant many new entities and networks would henceforth operate under the Disney umbrella, one of which is ESPN.

Disney becomes majority owner of ESPN

To be precise, the deal meant Disney immediately assumed 80% ownership of ESPN with Hearst Communications owning the other 20%. Technically speaking, the Connecticut-based ESPN is majority-owned by ABC, Inc., which is an indirect subsidiary of Walt Disney Television.

Disney issued a reorganization announcement in October 2020 clarifying ESPN’s place in the hierarchy. According to Disney, “the ESPN and Sports Content group” acquires and produces ESPN programming, news, and non-scripted sports content for the company’s cable channels, as well as for ESPN+ and ABC.

Of course, ESPN is itself a large international company with dozens of multimedia sports assets. Its relationship with Disney has by and large been very positive for both sides. The partnership has enabled Disney to extend its reach into sports considerably. Majority owning ESPN has also proven quite profitable for Disney.

Even so, despite some high-profile layoffs of on-air talent and other staff at ESPN, the partnership has remained strong. The growth of the ESPN+ video streaming service has partly helped offset the recent loss of cable subscribers.

ESPN deepens sports betting involvement, partners with Caesars, DraftKings

Some wondered if ESPN’s recent and enthusiastic embrace of sports betting could create friction with Disney. Given the company’s history of opposing sports betting, that certainly seemed a logical possibility.

In May 2018, the US Supreme Court lifted the federal ban on states other than Nevada offering legal sports betting. Since then, regulated wagering has enjoyed significant expansion across the US with retail and online sportsbooks launching in numerous jurisdictions. In response, ESPN began to devote increased attention to gambling on sports in its coverage.

ESPN deepened its involvement in sports betting even further with multi-year agreements with Caesars Entertainment and DraftKings. Caesars and its sports betting partner William Hill now serve as ESPN’s exclusive odds provider. Meanwhile DraftKings is the network’s exclusive daily fantasy sports provider. Additionally, both Caesars and DraftKings serve as co-exclusive sportsbook link-out providers across ESPN’s many platforms.

Conflicting ideals between Disney and ESPN?

We’re all familiar with “It’s a Small World,” one of Disney’s best known songs. The song’s message certainly reflects the company’s values, emphasizing community and the need to coexist peacefully. However, achieving such harmony necessarily requires compromise, which often means revising one’s own positions in order to accommodate others.

Some may perceive a conflict between family-centric Disney and ESPN’s involvement in an adult-oriented activity like gambling on sports. However, at an investors conference in late 2020, Disney highlighted ESPN’s new agreements with Caesars and DraftKings. In fact, when listing future goals and plans at the conference, Disney pointedly mentioned ESPN’s intention to expand its fantasy sports and sports betting-related content.

Interestingly, Disney itself technically acquired a stake in DraftKings in 2019. Years before, 21st Century Fox acquired the daily fantasy sports and sports betting company. Thus, when Disney purchased Fox in March 2019, it became a “passive investor” in DraftKings, albeit one that owns more than 18.2 million shares. A 2021 report of Disney’s financial performance showed a not-insignificant $305 million gain on its DraftKings stake.

ESPN has largely been able to maintain its editorial integrity over the years since becoming part of the Disney empire. As the self-described “Worldwide Leader in Sports,” ESPN has its own target audience of sports fans. That demographic obviously overlaps considerably with those who engage with Disney’s many other platforms. Both ESPN and Disney attract younger audiences and those who enjoy family-oriented entertainment.

Sports is an important part of the larger culture, but it is also its own distinct culture. It makes sense that Disney would like ESPN to reflect the company’s ethos. But it also makes sense for the company to allow ESPN to cover sports as comprehensively and effectively as possible. Today that includes acknowledging the increasing significance of sports betting.

Dream, believe, dare, do: Disney now fully wedded to sports betting

It appears Disney has now significantly changed its position regarding sports betting. Few would have imagined such a possibility even just a few years ago. But in August 2023, ESPN entered into a deal with Penn Entertainment to lend its brand on sportsbooks operating in 16 states. The newly branded ESPN Bet with fetch Disney $1.5 billion over the next 10 years. The company also acquires $500 million in Penn stock in the deal.

Feb. 2019: Iger doubts Disney involvement in gambling

In a Feb. 2019 earnings call, Disney Executive Chairman Robert Iger (then also CEO) responded to a question about his company’s relationship to gambling as follows: “I don’t see The Walt Disney Company, certainly in the near term, getting involved in the business of gambling, in effect, by facilitating gambling in any way.”

He added how he anticipated that ESPN “may do more to provide information” about sports betting in its coverage. Iger said that doing so would be “of particular interest to gambling” and that ESPN would “not be shy about it” but “fairly overt” with such information. Even so, he concluded by saying that as far as Disney was concerned, he didn’t anticipate the company taking it much further. “Getting into the business of gambling,” he said, “I rather doubt it.”

At first blush, the statement might appear to reflect the same anti-gambling stance Disney took before. In truth, however, Iger’s statement both acknowledges the growing interest in sports betting and the need to respond to that interest when covering sports.

Nov. 2021: Chapek eager to see Disney pursue gambling opportunity

Fast-forward to Nov. 2021, following nearly three years’ worth of Disney nurturing its relationship with ESPN, a period during which ESPN has also further integrated sports betting into its programming. Bob Chapek, Disney’s new CEO, stated on an earnings call that the company was actively seeking opportunities to become involved in sports betting via its sports entertainment partner.

Driven in part by a desire to retain a younger audience, Chapek said the company should “seriously consider getting into gambling in a bigger way, and ESPN is a perfect platform for this.”

Chapek went on to clarify how as has been the case with other issues and business decisions, Disney’s new stance toward sports betting is a response to changing times:

“Gambling does not have the cachet now that it had, say 10 or 20 years ago, and we have some concerns as a company about our ability to get in it without having a brand withdrawal…. But I can tell you that given all the research that we’ve done recently, that that is not the case. It actually strengthens the brand of ESPN when you have a betting component, and it has no impact on the Disney brand. Therefore, to go after that demographic opportunity plus the, of course, not insignificant revenue implications, that is something that we’re keenly interested in and are pursuing aggressively.”

“Dream, believe, dare, do” is another motto often cited to represent Disney’s entrepreneurial vision. Not long ago, few would have dreamed, believed or dared suggest Disney would do something like support sports betting, let alone actively pursue getting involved first-hand. Then again, as Walt Disney himself once famously said, “it’s kind of fun to do the impossible.”

Nov. 2022: Disney reappoints Iger as CEO

Shortly after his comments regarding Disney’s interest in sports betting, the board replaced Chapek as CEO. Instead of bringing in a new face, the board reappointed Iger for the job.

However, the move had little to do with Iger’s sports betting views. According to the Wall Street Journal, Chapek got into a very public disagreement with Disney CFO Christine McCarthy which cost him support from board members. Additionally, the outlet reported shareholders were disappointed with his public spat with DeSantis.

Since retaking the position, Iger hasn’t made any public comments about sports betting.

Aug. 2023: ESPN lands $2 billion deal with Penn Entertainment

Disney clearly moved from potential gambling foe to a company that fully embraces it. On Aug. 8, ESPN and Penn Entertainment announced a deal that will see ESPN operate branded sportsbooks. The branded sportsbook will be called ESPN Bet and will be available in the 16 states where Penn currently operates mobile sportsbooks. Disney will receive $1.5 billion over the next 10 years and the company will also pick up $500 million in shares of Penn stock.

ESPN Bet will be ESPN’s exclusive sportsbook as the company hopes to chip into the market dominance of FanDuel and DraftKings.