Calling it quits
Penn Entertainment pulls the plug on ESPN Bet
The mutual decision ends a two-year OSB experiment.
Hard Rock Bet is growing – we know you know! And we want to bring in some more maestros to make beautiful music in our Sportsbook. You need to be among the very best in the industry to be considered for these roles. Are you up to it?
Off air
Cancelled: Penn Entertainment and ESPN have mutually agreed to terminate their exclusive US online sports-betting agreement, with the relationship set to end December 1.
The move ends a 10-year deal announced in August 2023 that saw Penn pay $150m annually to license the ESPN Bet brand, alongside granting ESPN stock warrants.
The deal replaced Penn’s previous OSB arrangement with Barstool.
We got to get out of this place: Either party could exit the agreement after year three if certain market share thresholds were not achieved. That deadline loomed in August next year. Penn CEO Jay Snowden said the two sides had “mutually and amicably agreed to wind down our collaboration.”
He acknowledged that while ESPN Bet made “significant progress in improving our product offering and building a cohesive ecosystem,” the company would now “realign our digital focus on our growing iCasino business.”
Snowden added that Penn will rebrand its US sportsbook as theScore Bet, aligning its US and Canadian digital products under a single brand.
The rebrand is targeted for December 1, 2025, coinciding with a potential Missouri launch, subject to regulatory approval.
Score-bored: He emphasized theScore’s media platform – boasting 4 million monthly active users – will provide a more efficient cross-sell funnel for Penn’s Hollywood-branded iCasino offering.
“Our OSB product across both the US and Canada will now leverage connectivity with theScore media app,” Snowden said.
“Our OSB offerings will continue to provide a top of funnel cross-sell opportunity for our Hollywood-branded iCasino, which will remain integrated into our OSB product offering in states where legal.”
Open to offers: From ESPN’s side, chair Jimmy Pitaro praised the collaboration, saying the network helped drive 2.9 million new users into Penn’s ecosystem and saw “a strong uptick in first-time bettors this fall.”
He confirmed ESPN would “pursue other media and marketing opportunities within this space” while continuing as a Penn advertising partner.
All outstanding payments to ESPN will end in Q425, and the network will work with Penn on the transition from ESPN Bet to theScore Bet.
The early termination closes one of the most high-profile media–betting integrations in US OSB history, marking another Penn pivot, this time towards a vertically integrated model anchored by its proprietary technology and omnichannel ecosystem.
The indications from the summer were, however, that the launch of the ESPN DTC product had failed to ignite the spots-betting operation.
Falling between stools: This is the second high-profile OSB flub from Penn following its disastrous Barstool Sportsbook venture, which similarly ended with a cancellation back in 2023, to be replaced by the ESPN Bet deal.
Earnings in brief
Still thinking about the bad news: Penn also reported Q3 revenue of $1.72bn, up 5% YoY, with adj. EBITDA steady at $195m.
However, the company recorded a net loss of $865.1m, largely driven by an $825m impairment charge against its interactive division following the decision to terminate its partnership with ESPN and pivot toward iCasino growth.
Retail operations remained robust, generating $1.4bn in revenue and $466m in property-level adj. EBITDAR (32.8% margin), led by strength in the West, Ohio, St. Louis and Illinois.
The digital (Interactive) segment delivered $298m in revenue but posted a $76.6m EBITDA loss, reflecting lower OSB volumes and customer-friendly hold.
Penn said its North American iCasino revenue hit a record, up nearly 40% YoY, with cross-sell from sports betting at 62%.
Call waiting: Penn will be speaking to the analysts this afternoon. See the Earnings Extra edition later today, as well as the Earnings+More edition tomorrow morning.
So my supervisor (Carl) suggested I “find alternative ways to contribute.”
I’m interpreting this as “grow the LinkedIn page or get decommissioned.”
Follow Octoplay at:
https://mt.linkedin.com/company/octoplay-op
Thanks,
Octobot
Upcoming earnings
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