PENN and ESPN announce early termination of online sports betting partnership

PENN Entertainment and ESPN parent company Disney today announced they have mutually agreed to end their exclusive US online sports betting agreement early, with the termination effective from 1 December.

Under the original $150m-a-year deal, announced in August 2023, ESPN provided media and marketing services and granted PENN exclusive rights to the ESPN Bet trademark for US online sports betting (OSB).

The original term was 10 years, with either party allowed to terminate after three years if certain market share targets weren’t met.

But the two parties have now agreed to terminate early, with all outstanding payments to ESPN ceasing in the fourth quarter of 2025.

PENN will rebrand its betting offering to theScore Bet brand in the US. TheScore Bet is currently available in Ontario, Canada.

ESPN, meanwhile, has moved on quickly, entering into a new partnership with DraftKings, naming it the exclusive official sportsbook and odds provider for the network.

DraftKings will gain exclusive rights to integrate its products across the ESPN ecosystem from including its sportsbook, daily fantasy contests, and Pick6 game.

The operator will also power the betting section within the ESPN app and deliver promotions to subscribers of ESPN Unlimited.

A total of $38.1m will be paid to ESPN in Q4 in respect of all remaining fees owed through to 1 December, PENN said.

In addition, $5m will be paid to ESPN following the termination date “for traditional media to support theScore Bet and/or Hollywood Casino offerings”.

What’s more, Disney is unable to licence or launch its own sportsbook with the ESPN Bet brand for 15 months after 1 December.

Jay Snowden PENN’s CEO and president, said: “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.

“We plan to realign our digital focus on our growing icasino business, while continuing to capitalise on our omnichannel advantage as the nation’s leading regional retail casino operator.”

ESPN chairman Jimmy Pitaro added: “Together, ESPN and PENN created a truly unique offering with unparalleled integrations across our various media assets.

“ESPN drove over 2.9 million new users into the PENN ecosystem, with a strong uptick in first-time bettors this fall. We appreciate the collaboration we had with PENN and are now pursuing other media and marketing opportunities within this space.”

ESPN Bet is currently available in nearly 20 US states, yet the brand has struggled to achieve meaningful market share since its launch in November 2023.

PENN turned to Disney following the casino group’s failed attempt to crack US online sports betting with the acquisition of Barstool Sports and subsequent launch of Barstool Sportsbook.

After the deal with Disney was announced, Snowden shared lofty ambitions of ESPN Bet reaching 20% market share in the US by 2027.

But speaking in August during PENN’s Q2 2025 analyst call, CFO Felicia Hendrix forecasted the operator’s online sports betting handle market share would be 3.4% in Q3 and 4% in Q4.

Financially, PENN reported revenue of $297.7m for its interactive arm in Q3, up from $244.6m the year prior.

However, adjusted EBITDAR for the three months ending 30 September was a loss of $76.6m, though this was down on the $90.9m loss in Q3 2024.

Snowden said: “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.

“Meanwhile, our North America icasino business achieved its highest quarterly gaming revenue to date, an improvement of nearly 40% year-over-year, driven by record cross-sell from OSB of 62% and growth from our standalone Hollywood and theScore Bet icasino apps.

“The momentum in our icasino business continues to benefit from growing average MAUs, which experienced the third consecutive quarter of year over year and quarter over quarter increases.”

PENN shares are down almost 5% to $15.66, at the time of writing.