PENN Entertainment and ESPN have announced that they will officially terminate their sports-betting partnership, bringing an early end to the ambitious ESPN Bet project that was once hailed as a potential game-changer in the U.S. online gambling industry.
The decision, confirmed in a joint statement from PENN and ESPN, will see the collaboration conclude on December 1, 2025, less than three years after it began. The companies described the move as a “mutual and amicable” decision, signaling a major strategic shift for both the gaming operator and the media giant.
The partnership was originally launched in August 2023, when PENN and ESPN (a subsidiary of Disney) unveiled a 10-year, $1.5 billion agreement.
Under the deal, PENN would operate an ESPN-branded online sportsbook while paying ESPN around $150 million per year in licensing and marketing fees, along with issuing stock warrants to the broadcaster.
The goal was ambitious: to leverage ESPN’s unmatched brand power and media reach to challenge industry leaders DraftKings and FanDuel. With ESPN’s credibility among sports fans and PENN’s betting infrastructure, the collaboration appeared poised to disrupt the industry’s duopoly.
Despite the fanfare surrounding its launch, ESPN Bet failed to capture significant market share. Industry estimates suggest the platform held only 2-3 percent of total U.S. sports-betting activity. That’s far short of PENN’s 10-20 percent target within the first few years.
PENN’s quarterly reports painted a grim picture. In late 2024, the company’s interactive division posted a $109 million EBITDA loss, largely due to ESPN Bet’s performance. Analysts began forecasting that the partnership could unravel early as escalating costs and underwhelming revenue made the long-term deal financially untenable.
Under the termination agreement, ESPN Bet will cease operations by December 1, 2025, and PENN will rebrand its U.S. sportsbook under theScore Bet name. That’s the same brand it successfully operates in Canada.
TheScore, which PENN acquired in 2021, integrates media and betting in a way that has resonated with younger, digital-first users.
PENN will retain the ESPN Bet customer base, estimated at around 2.9 million users, while ESPN keeps the vested portion of its stock warrants (about 8 million shares) and forfeits the rest. The rebrand is expected to roll out gradually in late 2025 as PENN transitions its U.S. operations away from the ESPN identity.
For PENN Entertainment, ending the ESPN partnership signals a move toward greater financial discipline and operational control. Chief Executive Jay Snowden said the decision will allow PENN to “reallocate resources toward sustainable, organic growth.”
The company is now expected to prioritize developing online casino products alongside its regional gaming portfolio, instead of costly brand-licensing ventures.
Investors appeared to welcome the decision. PENN’s stock rose roughly 7 percent after the announcement, reflecting optimism that the company is exiting a deal that had become a financial drag.
The end of ESPN Bet also marks a shift in strategy for ESPN and its parent company, Disney. Instead of directly running a betting app through a licensee, ESPN will return to a content-driven betting model, partnering with DraftKings as its official sportsbook and odds provider.
This move allows ESPN to stay active in the sports-wagering space without taking on the operational and regulatory complexities of running a sportsbook.
It also aligns with Disney’s desire to balance innovation in fan engagement with its broader family-friendly brand image.
The collapse of ESPN Bet underscores the immense challenges facing new entrants in the U.S. sports-betting market. Even with a world-famous brand and extensive media exposure, converting sports fans into bettors proved far more difficult than anticipated.
The market remains dominated by a handful of entrenched operators, and customer acquisition costs continue to soar, particularly in highly competitive and heavily taxed states. The top sportsbooks in New York, for example, control most of the market, where operators are taxed 51% of their Gross Gaming Revenue (GGR), making profit margins increasingly tight.
For many observers, the PENN-ESPN experiment serves as a case study on the limits of brand power in a highly competitive, data-driven market. A strong logo and loyal audience weren’t enough to offset the realities of user incentives, state-by-state regulation, and intense promotional spending by rivals.
Existing ESPN Bet users will be transitioned to theScore Bet in states where PENN operates. Balances and accounts will carry over, but users will notice changes in the app interface and rewards program as the rebrand takes hold.
While the transition may cause short-term disruption, PENN hopes theScore’s media-betting integration will deliver a more seamless experience. Meanwhile, ESPN’s new alliance with DraftKings will bring betting lines, odds integrations, and live-odds graphics across ESPN’s broadcasts and digital platforms.
The dissolution of the ESPN-PENN partnership marks another sign of consolidation and recalibration in the sports-betting industry. The lesson is clear: market scale, technological infrastructure, and long-term player loyalty matter more than even the most recognizable brand name.
As ESPN steps back from direct sportsbook operations and PENN refocuses its resources, the U.S. market remains firmly in the hands of DraftKings and FanDuel. The story of ESPN Bet, once touted as a bold innovation, now stands as a cautionary tale of ambition meeting reality in one of the most competitive corners of digital entertainment.
