PENN Entertainment announced that it will terminate its deal with ESPN, leading to the closure of ESPN Bet in December this year. 

PENN and ESPN revealed that the ESPN Bet venture would end in a press release after PENN reported its Q3 results. PENN CEO and President Jay Snowden stated, “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.”

“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.”

Snowden said that PENN now plans to focus on theScore Bet as its digital betting platform in the U.S and Canada. PENN paid $2 billion to acquire theScore in 2021. 

It plans to pivot its online betting operations to theScore in conjunction with the launch of sports betting in Missouri on December 1. PENN has a license to operate in Missouri through its casinos there. 

All outstanding payments to ESPN will cease in the fourth quarter of 2025. Leading up to and following the termination date, ESPN said it will work with PENN to facilitate a transition from ESPN BET to theScore Bet.

PENN’s Sports Betting Failures Attract Investor Criticism

The collaboration with ESPN has failed to deliver the returns on the $1.5 billion PENN paid to launch the sports betting platform. This outlay followed a failed $550 million investment in Barstool Sports. It eventually sold the company back to founder Dave Portnoy for $1.

The continued failures of PENN’s sports betting investments have attracted much criticism from investors. PENN’s stock price has continued to stagnate amid a lack of capitalization on the growth of online sports betting. Its price remains at under $17, a 15% drop from this time last year. The share price was over $130 just a few years ago.

PENN had pinned a lot of hope on ESPN Bet and had set a goal of obtaining a 20% market share in sports betting by 2027. This has never looked like a realistic target. It lowered its expectation to 4.7% earlier this year, after dropping to 2.3% in April and May.

The existing partnership that Oddin signed with ESPN Bet and theScore will remain active through theScore. Oddin powers the platform’s esports betting and has also forged further partnerships this year to expand its presence in South America.   

PENN to Focus on iGaming as Betting Struggles

However, rather than investing in esports and sports betting, PENN appears to be increasingly focusing on iGaming. 

The company saw growth of 40% in its iGaming sector this quarter. Snowden said further growth in this area is a future target. He stated, “PENN’s iCasino forward approach has clear long-term alignment to our core business, which will focus on cross-sell opportunities across our ecosystem and enhanced connectivity to our 33 million member PENN Play loyalty program.”

Growth in iGaming was not enough to stop a loss of $0.22 per share, significantly more than the $0.10 estimated by analysts. Revenue was up 4.8% from the prior year to $1.717 billion. However, a net loss of $864.6 million has been damaging. This led to an Adjusted EBITDA loss of $76.6 million.

Snowden blamed customer-friendly sports results for the poor performance in the online sports betting (OSB) segment. He stated, “Gaming revenues and Adjusted EBITDA in the quarter came in below expectations due to customer-friendly hold across our digital operations and lower than anticipated OSB volumes.”

The company is betting that theScore can now lead the way in sports going forward. Given previous failures, there is no guarantee that the gamble will pay off.