Disney and Penn Entertainment agree to end ESPN Bet venture
The project failed to gain a significant market share since launching in 2023
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Walt Disney Co. and Penn Entertainment Inc. have mutually agreed to end their sports betting venture, ESPN Bet, on December 1 after the project failed to earn a significant market share.
The two companies originally signed a 10-year deal worth $2bn in August 2023 and launched the project that same year, with Disney hoping to use the renowned ESPN brand to capitalize on the burgeoning sports betting market in the US.
Penn, an iGaming, online casinos and entertainment company based in Wyomissing, Pennsylvania, had previously launched Barstool Sportsbook before reaching the agreement with ESPN to launch ESPN Bet.
However, the new venture struggled to compete with other brands in the industry, with online sportsbooks including FanDuel, DraftKings, Fanatics and Bet MGM dominating a sports betting market that is worth an estimated $13.7bn.
A statement from Penn President and CEO Jay Snowden explained that both parties had “expected to compete for a podium position in the space”, and that the end of the venture was “amicably agreed”.
“Although we made significant progress in improving our product offering and building a cohesive ecosystem with ESPN, we have mutually and amicably agreed to wind down our collaboration,” said Snowden.
Independent analysis suggests that ESPN Bet had a market share of roughly three per cent.
In contrast, a report from Reuters earlier this year claimed that DraftKings and FanDuel “have about 80 per cent of the US market”, with both companies having leveraged their previous positions to grow their online sportsbooks since the change in legislation in 2018.
Flutter Entertainment, the owner of FanDuel as well as European brands Paddy Power and Betfair, estimates that the market could be worth as much as $39bn by 2030, with 38 states and Washington DC having legalized sports betting in some form.
Both California and Texas, two of the most populous states in the US, are yet legalize sports betting.
As such, neither Penn nor Disney are opting to end their involvement in sports betting. Penn will continue to offer betting under their ‘theScore’ brand, while ESPN has signed a deal with DraftKings to make the company its official sportsbook and odds provider.