ESPN and PENN Entertainment have mutually agreed to terminate their betting partnership earlier than expected, following a deal established in 2023. The agreement, which was set to last for ten years, provided ESPN with $150 million annually in exchange for marketing services and the right to utilize the ESPN Bet brand in the United States.
The termination of this partnership comes amid significant challenges in the sports betting landscape. Recently, the U.S. Department of Justice charged numerous individuals in connection with cases involving manipulated game outcomes, raising concerns within the industry. Although the companies did not explicitly cite these allegations as a reason for their decision, they acknowledged performance issues related to the partnership.
Details of the Partnership’s Wind-Down
ESPN and PENN Entertainment indicated that the ESPN Bet brand will cease operations on December 1, 2023. The deal included provisions for either party to terminate the agreement after three years if specific market share performance thresholds were not met. Both companies emphasized that their decision to wind down the partnership was based solely on financial results.
ESPN Chairman Jimmy Pitaro remarked that the platform attracted 2.9 million new users, noting a marked increase in first-time bettors during the fall. He stated that ESPN is exploring other media and marketing opportunities within the sports betting sector.
In a similar vein, PENN CEO Jay Snowden described the decision as mutually agreed upon and amicable. Following the termination, PENN plans to rebrand ESPN Bet as TheScore Bet on the same date, aligning with the anticipated launch of sports betting in Missouri, pending regulatory approvals.
Future Directions for Both Companies
As part of the transition, all outstanding payments to ESPN will cease in the fourth quarter of 2023. Leading up to the termination date, ESPN will assist PENN in facilitating the shift from ESPN Bet to TheScore Bet. Despite the end of their partnership, PENN will continue to engage with ESPN as an advertising client.
PENN Entertainment aims to realign its digital strategies, focusing on its growing iCasino business while leveraging its position as a major regional retail casino operator. The evolving landscape of sports betting continues to present opportunities and challenges, particularly as the industry navigates regulatory environments and public perception.
With the betting partnership concluded, both ESPN and PENN Entertainment are poised to chart new paths in the dynamic realm of sports and entertainment.
