Colossal failure
It seemed like a good idea at the time. Combine the world’s biggest name in sports with a seasoned gambling company and you should have a chance to compete in the top tier of the United States’ legal sports betting market. But it didn’t work. On Thursday, ESPN and Penn Entertainment announced that they have mutually decided to end their sports betting partnership, thus killing the ESPN Bet sportsbook. The split will take effect on December 1, 2025.
“When we first announced our partnership with ESPN, both sides made it clear that we expected to compete for a podium position in the space,” said Jay Snowden, CEO and President of PENN Entertainment, in Thursday’s press release. “Although we made significant progress in improving our product offering and building a cohesive ecosystem with ESPN, we have mutually and amicably agreed to wind down our collaboration. We plan to realign our digital focus on our growing iCasino business, while continuing to capitalize on our omnichannel advantage as the nation’s leading regional retail casino operator.”
The two companies agreed to the ten-year, $2 billion deal in August 2023, comprised of annual payments of $150 million from Penn to ESPN, plus another $500 million in possible warrants. Each side had the right to terminate the agreement after three years, but, in the end, it barely lasted two. Though ESPN Bet was pushed on every ESPN television, radio, and web platform and integrated into virtually all of its programming, the sportsbook never made headway. It did not come close to competing with US market leaders DraftKings and FanDuel, and its market share languished in the low single digits.
To wind down the partnership, Penn Entertainment will pay Disney, ESPN’s parent company, $38 million in its remaining fees owed. And as it was a deal in which Penn ran the sportsbook and ESPN essentially just lent its name and marketing strength, Penn will keep its database of almost 3 million users that it attracted during the partnership.
Moving forward
Penn Entertainment will rebrand its sportsbook to theScore Bet, launching December 1. That is also the day that sports betting will go live in Missouri; theScore Bet will have a footprint in 20 states. Penn will pay ESPN $5 million after December 1 to promote theScore Bet and its Hollywood-branded online casino.
Whether or not ESPN/Disney decides to revisit sports betting in the future, the terms of the breakup prohibit ESPN from associating its brand with a sportsbook until February 2027.
In the meantime, on the same day that Penn and ESPN announced the termination of their partnership, ESPN also announced that it has named DraftKings its exclusive Official Sportsbook and Odds Provider.
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