There’s an old saying that if at first you don’t succeed, try again. ESPN and PENN Entertainment announced yesterday the mutual opt-out of their U.S. online sports betting agreement. The end coming on December 1 is the end of a partnership that still had seven years remaining on a deal that paid out ESPN $150 million per year in cold hard cash.
When the agreement was first announced, everyone asked the same question: Would this marriage actually work? The biggest name in sports media aligning itself with a gambling company that had already struggled to find traction with Barstool Sports. On paper, ESPN looked like a step up — a brand powerhouse that could turn PENN’s sportsbook into a national contender.
Just over two years later, here we are. ESPN BET is folding, and plenty of people are cheering its demise. Not because ESPN bet on sports betting — but because ESPN never really owned it. However, here’s why they will try again.
The online sportsbook game is brutal. It’s already dominated by two titans — DraftKings and FanDuel — who’ve been running the table for years.
A Numbers Game
According to CasinoReports.com, those two control roughly 66% of the entire mobile betting market. The rest — BetMGM, Caesars, BetRivers, Bet365, and yes, ESPN BET — are fighting for scraps, each with less than 10% share.
It’s the same story you see everywhere. For every Pepsi and Coke, there’s a Canada Dry. McDonald’s and Starbucks have Subway. Nike and ADIDAS have KangaROOS. No disrespect to the smaller players, but nobody’s trading their Big Mac for a cold cut combo.
That’s the reality PENN and ESPN ran into. They bet (pun intended) on each other. PENN thought ESPN’s branding would instantly legitimize its sportsbook. ESPN thought PENN’s expertise would make its entry into gambling seamless. But DraftKings and FanDuel? They’d never slap someone else’s logo on their product — because in their world, they are the brand.
“Our primary focus is always to serve sports fans and we know they want both betting content and the ability to place bets with less friction from within our products,” said ESPN Chairman Jimmy Pitaro when the network announced the partnership with PENN Entertainment in 2023. “The strategy here is simple: to give fans what they’ve been requesting and expecting from ESPN. PENN Entertainment is the perfect partner to build an unmatched user experience for sports betting with ESPN BET.”
In theory, that sounded perfect. In practice? Not so much. There are several reasons this partnership never hit the jackpot — and most of them aren’t ESPN’s fault.
A Rough Draft
Start with timing. ESPN BET was over a decade late to the party. DraftKings launched in 2012, FanDuel in 2009. ESPN BET showed up in 2023 — when bettors had already built their habits, set up their accounts, and picked their favorite platforms. By the time ESPN arrived, the dance floor was full.
Then there’s the optics problem. ESPN has always walked the fine line between journalism and entertainment. The network has partnerships with every major league — and those leagues already had sportsbook deals elsewhere. MLB, the NBA, and the NFL all have official partnerships with DraftKings, FanDuel, or Caesars. The NHL was the only league aligned with ESPN BET.
When the heavyweights have already picked sides, you’re not exactly dealing from a position of strength.
Meanwhile, DraftKings and FanDuel didn’t just build sportsbooks — they built ecosystems. They’ve spent years locking in partnerships, influencers, sponsorships, and content deals across every major sport. They own the real estate. They own the conversation.
With no federal regulation and very little land left to own, of course it would entice a brand like PENN Entertainment to go after the biggest fish left available—ESPN branding.
But even ESPN’s legendary brand couldn’t elevate PENN’s platform to contender status. That’s not a reflection of ESPN’s failure — it’s a reflection of how entrenched the market already is.
If You Fail….
“Together, ESPN and PENN created a truly unique offering with unparalleled integrations across our various media assets,” said Pitaro on Thursday in the release about the mutual opt-out. “ESPN drove over 2.9 million new users into the PENN ecosystem, with a strong uptick in first-time bettors this fall.”
Impressive numbers on paper — but is 2.9 million users (not active users, mind you) worth $150 million a year? FanDuel reported 12 million registered users in March. DraftKings averaged 4.8 million monthly active users in Q4 last year. That’s the scale ESPN was up against.
Make no mistake about it—ESPN isn’t done betting. The PENN deal was a first draft, not the final version. The network’s direct-to-consumer product wasn’t just about cutting the cord; it was about building a subscriber base that could one day be cross-promoted into another sportsbook venture.
Would that surprise you? To me, not in the slightest.
PENN Entertainment simply gambled on ESPN’s name being enough to carry them into the big leagues. But when your partner’s network is already airing games loaded with ad inventory from your competitors, you’re playing against a stacked deck.
This wasn’t a win-win, nor was it a lose-lose. It was a swing — and a miss — by two brands trying to figure out how to play in a game already decided.
So yes, ESPN BET is dead. But ESPN’s gambling ambitions aren’t. You can bet on that.
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John Mamola is Barrett Media’s sports editor and daily sports columnist. He brings over two decades of experience (Chicago, Tampa/St Petersburg) in the broadcast industry with expertise in brand management, sales, promotions, producing, imaging, hosting, talent coaching, talent development, web development, social media strategy and design, video production, creative writing, partnership building, communication/networking with a long track record of growth and success. He is a five-time recognized top 20 program director in a major market via Barrett Medi’s Top 20 series and has been honored internally multiple times as station/brand of the year (Tampa, FL) and employee of the month (Tampa, FL) by iHeartMedia. Connect with John by email at John@BarrettMedia.com.
