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ESPN Bet is ceasing to exist roughly two years after its high-profile debut. The branded sportsbook never made anything close to its intended impact on the U.S. sports betting market.
Penn Entertainment and ESPN said early Thursday that they are winding down their 10-year, $2 billion deal, one announced to great fanfare in August 2023 to create an ESPN-branded sportsbook. Instead, ESPN is returning to a large-scale, multiyear partnership with DraftKings, and DraftKings will become the exclusive sportsbook and odds provider of ESPN.
ESPN and DraftKings had a similar agreement before 2023.
The Penn Entertainment-ESPN deal has been in increasing trouble for many months. As ESPN Bet held a low single-digit percentage of market share in most major states with sports betting—a far cry from the 20% share that Penn Entertainment and ESPN ultimately intended to win by 2027—Penn Entertainment executives increasingly alluded to exercising an opt-out from the deal in earnings calls.
Other moves, such an expensive entry into New York—the top legal betting state in the country—and a large-scale integration of ESPN Bet into the network’s new direct-to-consumer streaming product, similarly fell flat.
As the U.S. sports betting duopoly of FanDuel and DraftKings has seen no material decline in their market power, Penn Entertainment and ESPN moved even quicker than a 2026 opt-out in the original deal.
“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,” Penn Entertainment CEO and president Jay Snowden said. “Although we made significant progress in improving our product offering and building a cohesive ecosystem with ESPN, with have mutually and amicably agreed to wind down our collaboration.”
Penn Entertainment will now rebrand its U.S. sportsbook to theScore, and those two entities already are working together in Ontario.
All remaining payments from Penn Entertainment to ESPN will cease in this year’s fourth quarter. According to a filing Thursday with the U.S. Securities & Exchange Commission, those final payments will amount to $38.1 million in remaining fees due, and an additional $5 million in advertising support to aid with the transition. Penn Entertainment will also continue to be an ESPN advertising client.
Back to DraftKings
The reunion with DraftKings, meanwhile, returns ESPN to many core elements of a deal it had before aligning with Penn Entertainment. The deal, effective Dec. 1, calls for DraftKings to be the official sportsbook and odds provider for ESPN, and DraftKings will be heavily integrated throughout ESPN platforms. DraftKings CEO and cofounder Jason Robins called the deal “a natural fit,” not surprising given the prior history of the two companies.
ESPN chairman Jimmy Pitaro said the renewed tie with DraftKings will, in part, allow the network to “grow our ESPN direct-to-consumer business.”
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