Users must withdraw funds by December 1, as ESPN pivots to a new exclusive deal with DraftKings. (Image: CNA)
A major realignment is underway in the competitive sports betting industry. ESPN Bet, the platform born from a high-profile partnership between Penn Entertainment and ESPN, is being shut down. This action comes after ESPN and rival DraftKings announced a new, exclusive collaboration and the firms' $1.5 billion deal fell through.
The decision stems from the mutual termination of the decade-long agreement between Penn Entertainment and ESPN. Due to a failure to meet market share and profitability targets, the 2023 agreement was terminated after just two years. Penn Entertainment stated the platform failed to become a "scale player" in the intensely competitive North American market. This closure paves the way for ESPN's new strategic alliance with the industry leader, DraftKings.
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All ESPN Bet account holders will immediately be subject to a clear deadline. By December 1, 2024, users must take their money out of their accounts and close them. The platform will cease to exist in its current form. Penn Entertainment plans to relaunch its own branded service, "The ScoreBet," but this will be a completely separate entity. ESPN Bet users will need to sign up for the new platform as if they were new customers.
The ambitious partnership fell short of its lofty targets. The company had envisioned controlling 20% of the North American sports betting market by 2027, but by 2025, ESPN Bet managed just 4.7% Despite outperforming the former Barstool Sportsbook, the gains were too modest to warrant Penn Entertainment’s massive outlay. The company cited a need for a "more efficient cost structure" as a key reason for the strategic pivot.
With the Penn deal terminated, ESPN has immediately moved to partner with a market leader. The new multi-year agreement makes DraftKings the exclusive sportsbook provider for ESPN. ESPN Chairman Jimmy Pitaro stated that working with DraftKings, "a leader in the space," will allow them to build a better integrated experience for sports fans and grow their direct-to-consumer business, signaling a more focused approach to sports betting.
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