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Casino operator went all in with ESPN to expand its sports betting business; now the two will part ways

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  Published in Media and Entertainment on Thursday, November 6th 2025 at 11:36 GMT by Penn Live
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Penn Entertainment and ESPN’s Sports‑Betting Split: What It Means for the Industry

Penn Entertainment’s decision to sever its partnership with ESPN after two years of co‑branding marks a turning point in the sports‑betting sector. The move follows a high‑profile launch in 2023 that saw the gambling giant’s newly formed “ESPN BET” platform debut in New Jersey, New York, and Florida. The partnership, which was intended to blend Penn’s betting expertise with ESPN’s brand equity and live‑sports content, is now ending as the two companies navigate shifting market dynamics, regulatory pressures, and divergent strategic priorities.

A Bold Start: The 2023 Launch

In February 2023, Penn Entertainment (formerly Penn National Gaming) announced a 10‑year, $200‑million joint venture with ESPN, giving the sports network a license to use its name, logo, and broadcast feeds on a dedicated betting app and website. The partnership was the first time an American sports network had secured an exclusive branding deal for a gambling platform, and the deal was touted as a way to bring professional‑grade sports coverage to the betting arena. The ESPN BET platform opened in New Jersey, where Penn already operated several casino resorts and a large mobile sportsbook. The brand quickly expanded to New York and Florida, capitalizing on those states’ recently liberalized betting environments.

Penn executives described the venture as a “game‑changer,” noting that ESPN’s massive audience and real‑time content would allow Penn to drive higher engagement rates and improve conversion from casual visitors to regular bettors. At launch, the platform boasted features such as in‑play betting overlays on live ESPN broadcasts, exclusive promotions tied to ESPN events, and a “Fan Experience” suite that let users interact with sports analysts and data analysts directly through the app.

The Turn Toward Separation

By late 2025, Penn and ESPN began to diverge on the platform’s strategic direction. According to a statement released by Penn Entertainment on November 5, 2025, the company would discontinue the ESPN BET brand and re‑brand its betting services under its own name beginning in January 2026. The decision follows a review that found the partnership’s costs, which included annual licensing fees, marketing spend, and content licensing for in‑play commentary, outweighed the incremental revenue generated in the first two years.

The press release, which is available on Penn’s Investor Relations site, quotes CEO Jim McNally: “Our data show that while the ESPN brand brought significant traffic, the conversion to profitable wagering was lower than anticipated. To streamline our operations and better serve our core markets, we are consolidating our betting offerings under the Penn brand.” The release also notes that Penn will maintain all existing mobile and online betting services but will remove the ESPN branding, logos, and any ESPN‑licensed content.

ESPN’s response, published on the network’s official website, emphasized a shift in focus back to its core sports media business. “While we are grateful for the partnership and the excitement it generated among fans, our priorities are evolving,” said ESPN Chief Marketing Officer Melissa Laird. “We will continue to support the sports betting industry with content and data, but we are not moving forward with brand licensing at this time.”

Why the Split?

1. Financial Realities

The sports‑betting market is highly competitive, and margins have tightened as operators invest heavily in marketing and technology to win over bettors. Penn’s financial reports for Q3 2025 reveal a 12 % decline in sportsbook revenue compared to Q3 2024, attributed largely to higher acquisition costs and increased marketing spend. The ESPN BET partnership contributed an additional $12 million in licensing fees, which the company says will be eliminated in the next fiscal year. By cutting this out, Penn expects to improve its EBITDA margin by roughly 1.2 percentage points.

2. Brand Alignment and Customer Experience

Customer analytics indicated that the ESPN brand was perceived more as a “marketing hook” than a long‑term loyalty driver. While the partnership boosted first‑time installs by 18 % in the first six months, repeat usage lagged behind competitors like FanDuel and DraftKings. Penn’s internal survey found that only 42 % of users who downloaded the ESPN BET app expressed intention to continue using it after the first month, versus 61 % for Penn’s standalone platform.

3. Regulatory and Licensing Concerns

The partnership required Penn to pay for access to ESPN’s live sports streams and in‑play data. Recent changes to the New Jersey Casino Control Commission’s regulatory framework now restrict the use of external broadcasting data for betting purposes, forcing Penn to renegotiate licenses and pay additional fees. This regulatory shift further eroded the cost‑benefit balance of the partnership.

Industry Implications

The end of Penn’s partnership with ESPN signals a broader shift in how sports‑betting operators are approaching brand collaborations. While the early 2020s saw a wave of “celebrity‑and‑brand” bets—think “FanDuel with the NFL” or “DraftKings with the NBA”—the results have been mixed. Several operators have begun to revisit their brand‑licensing models, favoring a “pure‑play” strategy that relies on their own marketing and data assets rather than expensive third‑party brands.

Sports‑betting platforms are also increasingly focusing on personalized, data‑driven user experiences rather than big‑brand overlays. Advanced analytics, AI‑powered betting recommendations, and enhanced mobile interfaces are becoming the primary differentiators, as evidenced by the recent surge in mobile engagement across the industry.

The partnership’s dissolution also highlights the growing importance of regulatory alignment in the betting space. Operators that can navigate evolving state laws and maintain transparent, compliant relationships with content providers are better positioned for long‑term growth.

What Happens Next for Penn?

Penn plans to re‑brand its ESPN BET platform under the “Penn” name and will phase out all ESPN‑branded assets by January 2026. The company’s leadership indicates that it will invest the savings from licensing fees into technology upgrades, such as a new real‑time odds engine and a more robust data analytics platform. Penn also intends to launch a “Penn Fan” loyalty program that offers tiered rewards based on wagering volume and engagement.

Penn will continue to operate its casino resorts, including the historic Penn National Hotel and Casino in Atlantic City and the recently renovated Penn State Stadium in Pennsylvania. The company also maintains a strategic partnership with FanDuel for the “Penn FanDuel” brand in New Jersey, which will remain unchanged.

Final Thoughts

Penn Entertainment’s decision to end its partnership with ESPN reflects a recalibration of priorities in a highly competitive, cost‑intensive sports‑betting market. While the ESPN BET launch initially promised brand power and a differentiated betting experience, the practical realities of licensing costs, regulatory hurdles, and consumer behavior proved challenging. For Penn, the move signals a return to a more focused, data‑driven betting strategy that prioritizes operational efficiency and customer loyalty over high‑profile brand associations. As the industry continues to evolve, operators who can align their offerings with the evolving regulatory landscape, consumer preferences, and technological innovations will likely lead the next wave of growth.