ESPN is shifting its strategy toward online sports gambling and ending its partnership with Penn Entertainment.
The companies announced Thursday that they are terminating a deal to give ESPN a stake in Pennsylvania, which operated the sportsbook app ESPN Bet. The app will no longer display the familiar red ESPN logo. We will continue to operate under a new name.
ESPN announced a partnership with DraftKings, a leading sports betting company, to provide odds and other game-related data to The Walt Disney Company’s programs and digital platforms. ESPN’s broadcast staff will use DraftKings odds starting December 1st.
The app simply couldn’t meet its financial goals in a competitive business that operates in 31 states where online gambling is legal, according to people familiar with ESPN and Penn’s deal.
In 2023, Penn acquired the rights to use the ESPN name on the app. As part of the deal, ESPN promoted the product throughout its programming and provided access to on-air talent. ESPN had the right to buy up to 31.8 million Penn shares over 10 years for $500 million.
“When we first announced our partnership with ESPN, both sides made it clear that we expected to compete for a podium spot in this space,” said Jay Snowden, CEO and president of Penn Entertainment. “While we have made significant progress in improving our product offerings and building a consistent ecosystem with ESPN, we have mutually and amicably agreed to wind down our collaboration.”
The termination of this contract came shortly after an FBI investigation led to his arrest for allegedly forfeiting a game, claiming an injury to give him a win on one of his prop bets.
ESPN has been in discussions with DraftKings for months about a new partnership, so ESPN’s decision is unrelated to recent news. However, removing ESPN’s name from betting apps could protect the brand from being a target if the NBA lawsuit escalates.
Starting in December, the DraftKings app will be integrated exclusively across ESPN’s platforms.
The companies said they will “work together to advance our shared commitment to responsible gaming by devoting our notable assets to education, customer awareness and promoting responsible play through campaigns and integrations.”
DraftKings will offer a betting tab within the ESPN app, and its customers will receive special promotions on ESPN’s newly launched direct-to-consumer streaming product.
DraftKings operates in 28 states, Washington, DC, and Ontario, Canada, and has more than 10 million customers across its products.
