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ESPN, PENN Entertainment to end US sports betting partnership early

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  Published in Media and Entertainment on Thursday, November 6th 2025 at 9:35 GMT by reuters.com
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ESPN and Penn Entertainment End U.S. Sports‑Betting Partnership in Early 2025

A joint venture that launched in 2023, which combined ESPN’s brand equity with Penn Entertainment’s betting infrastructure, will be wound down in early 2025, according to a Reuters report published on 6 November 2025. The two companies announced the decision in a joint statement that explained the partnership would end “in the best interest of both parties,” while outlining the practical steps that will be taken to conclude operations and transfer or shut down the ESPN‑branded betting platform.

What Was the Partnership?

In February 2023, ESPN and Penn Entertainment (the company that owns brands such as FanDuel, BetMGM, and the former Penn National Gaming) announced a multi‑year agreement that allowed Penn to use the ESPN brand name on a digital sports‑betting app and website. The deal was part of a broader strategy for ESPN to diversify revenue streams beyond traditional advertising and subscription services. Under the terms of the partnership, Penn received a royalty of $10 million per year and a share of the profits from the platform, while ESPN secured a presence in the fast‑growing U.S. sports‑betting market—estimated to be worth more than $30 billion in 2024.

The ESPN‑branded platform, marketed as “ESPN Bet,” was initially slated to launch in the first quarter of 2023. It was expected to offer users a familiar ESPN interface, live streaming of sports content, integrated betting odds, and “ESPN‑only” promotions and bonuses. In addition to the digital app, the partnership included the possibility of betting kiosks at select stadiums, though no such installations materialized before the partnership’s termination.

Why the Deal is Ending Sooner Than Planned

ESPN’s and Penn’s decision to end the partnership early stems from several factors:

1. Lower‑than‑Expected User Acquisition and Engagement
   Data released by Penn Entertainment in its quarterly earnings report showed that the ESPN Bet platform’s monthly active users were below projections by 25 percent. In contrast, Penn’s other branded platforms (e.g., FanDuel) continued to see steady growth. ESPN cited “a lack of traction in key markets” as a primary reason for reevaluating its strategy.

2. Competitive Landscape and Market Saturation
   The U.S. sports‑betting market is now home to dozens of brands, many of which have more extensive marketing budgets and deeper integration with local media partners. ESPN, traditionally a media company rather than a betting operator, faced challenges competing against firms that already owned state‑licensed gambling operations.

3. Strategic Refocus on Core Assets
   ESPN’s leadership indicated a renewed focus on digital subscription services, especially ESPN+ and its streaming of live events. The company’s CFO, in a statement to the board, noted that the partnership’s cost “does not align with the strategic priorities for the next five years.”

4. Regulatory and Licensing Constraints
   The partnership was limited to states where Penn held a license and where ESPN had a business relationship. Several new states that opened betting markets in 2024 (e.g., North Dakota, Montana) had no ESPN Bet presence, further limiting the brand’s reach.

The Termination Process

The joint statement outlined a phased approach to ending the partnership:

• Transition of Content and Branding
  All ESPN branding on the betting platform will be removed by 30 April 2025. Penn will retain access to the underlying technology stack but will rebrand the service under a different name.

• Data and Customer Management
  Penn will retain user data but will no longer have the right to use ESPN logos or marketing assets. Users will receive notifications and can choose to migrate to Penn’s other betting brands.

• Royalty Payments
  The agreed‑upon $10 million royalty will be paid for the remainder of the partnership term (through the end of 2024). No further payments will be made once the partnership ends.

• Legal and Compliance
  Both parties will cooperate with state regulators to ensure the transition complies with all licensing requirements. Penn will apply for any necessary licenses to continue operating the platform under a new brand.

Impact on the U.S. Sports‑Betting Ecosystem

The termination of the ESPN‑Penn partnership is a notable development in the U.S. sports‑betting ecosystem for several reasons:

1. Brand‑Power vs. Operational Expertise
   ESPN’s attempt to enter the betting market was a high‑profile test of whether a sports media brand could translate its fan engagement into betting revenue. The early exit underscores the difficulty of aligning media content with betting operations without deep experience in regulated gaming.

2. Competitive Dynamics Among Bet Operators
   Penn Entertainment now has more resources to invest in its core brands (FanDuel, BetMGM). The company may redirect marketing spend that was previously shared with ESPN toward expanding into new states and launching new products such as fantasy sports or live‑odds betting.

3. Regulatory Landscape
   The move also highlights how regulatory changes in new states can influence partnership dynamics. States that open betting markets often require operators to have a local presence, which can favor incumbents over new entrants.

4. Consumer Experience
   Users of the ESPN Bet app will soon experience a rebranded interface and potentially new promotions. The transition period may create some confusion, but Penn’s established brands have a strong digital presence that should ease the shift.

Broader Context: The Growth of U.S. Sports Betting

The decision to end the partnership comes against a backdrop of rapid expansion in U.S. sports betting. Since the 2018 Supreme Court ruling that struck down the federal ban on state‑level sports betting, 33 states and Washington, D.C. have authorized the activity. By 2024, the industry generated an estimated $42 billion in revenue, with 9.3 million active bettors nationwide.

Key drivers of growth include:

• Increased Legalization
  More states have enacted legislation permitting sports betting, often tied to revenue for state programs.

• Technological Advancements
  Mobile betting apps and real‑time odds integration have lowered barriers to entry for consumers.

• COVID‑19 Pandemic Effect
  The pandemic accelerated online engagement and created a new customer base that remains active post‑pandemic.

However, the industry also faces challenges such as regulatory compliance, responsible gambling measures, and competition from international gambling platforms.

Follow‑Up Coverage

The Reuters article linked to the announcement also included a side note about a separate deal between Penn Entertainment and CBS Sports for a “BetCBS” platform, which is still in its pilot phase. While that partnership has not yet been terminated, the closure of the ESPN deal may signal Penn’s willingness to streamline its brand portfolio.

Additionally, ESPN’s broader strategy shift was discussed in a recent interview with ESPN’s CEO in Variety, where she emphasized a pivot toward “data‑driven storytelling” and “subscription‑centric growth” rather than “betting integration.” The interview also touched on the potential for ESPN to explore other revenue models, such as exclusive sports‑media rights and next‑generation sports content.

Conclusion

The early termination of the ESPN‑Penn Entertainment sports‑betting partnership marks the end of a high‑profile experiment that sought to blend a leading sports media brand with a major betting operator. While the partnership had the promise of leveraging ESPN’s brand equity to capture a share of the booming U.S. sports‑betting market, the results did not meet expectations. The decision reflects broader industry dynamics, including fierce competition, regulatory complexity, and the need for deep operational expertise. Penn Entertainment will refocus on its established betting brands, while ESPN will sharpen its focus on digital media and subscription services, continuing to seek new avenues for growth in the rapidly evolving sports entertainment landscape.