The ever-changing landscape of U.S. sports betting took a new turn on Thursday, Nov. 6.
PENN Entertainment, Inc. and ESPN announced that they both mutually agreed upon an early termination of their exclusive U.S. Online Sports Betting agreement (OSB), effective Monday, Dec. 1.
Meanwhile, ESPN announced an agreement with DraftKings, naming DraftKings the exclusive official sportsbook and odds provider of ESPN, also effective Dec. 1.
These changes coincide with the launch of Missouri sports betting, which officially goes live at midnight on Dec. 1.
Starting in Dec., DraftKings products will be integrated across ESPN’s platform with a full rollout expected sometime early next year. ESPN BET will shift to a sports betting content brand with DraftKings integrations, anchored by ESPN’s betting show — ESPN BET Live — which currently airs weekdays at 6:30 p.m. ET on ESPN2, and dedicated social and digital channels.
“Our betting approach has focused on offering an integrated experience within our products,” said Jimmy Pitaro, Chairman, ESPN, in a news release. “Working with DraftKings, a leader in the space, will allow us to build upon that foundation, continue to super-serve passionate sports fans and grow our ESPN direct-to-consumer business. We are excited about this new collaboration with DraftKings.”
DraftKings will play a major role across ESPN’s digital platforms. DraftKings will power the betting tab within the ESPN app and their customers will receive special promotions for ESPN Unlimited, ESPN's newly launched direct-to-consumer product.
“ESPN’s unmatched visibility across the world of sports make this collaboration a natural fit,” said Jason Robins, CEO and Co-Founder of DraftKings. “As an innovative leader in digital sports entertainment, DraftKings is uniquely positioned to integrate our technology and products with ESPN’s iconic brand and storytelling power. Together, we’re delivering a seamless, engaging, and responsible experience that elevates how fans connect with live sports.”
Currently, DraftKings operates in 28 states, Washington, D.C., and Ontario, Canada, and has a growing customer database of more than 10 million.
PENN Entertainment Will Launch theScore Bet
Under the terms of the original agreement with ESPN (announced Aug. 2023), ESPN agreed to provide PENN with media, marketing services and the exclusive right to the ESPN BET trademark for OSB in the U.S. in exchange for $150 million per year in cash payments to ESPN and warrants to purchase common stock of PENN.
The agreement had an initial term of 10 years, with the right for either party to terminate the agreement after the third year if specific market share performance thresholds were not met.
“When we first announced our partnership with ESPN, both sides made it clear that we expected to compete for a podium position in the space,” said Jay Snowden, CEO and President of PENN Entertainment. “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. We plan to realign our digital focus on our growing iCasino business, while continuing to capitalize on our omnichannel advantage as the nation’s leading regional retail casino operator.”
All outstanding payments to ESPN will end in the fourth quarter of this year. Leading up to and following the termination date, ESPN will work with PENN to facilitate a transition from ESPN BET to theScore Bet.
"Looking ahead, we plan to rebrand our OSB offering in the U.S. to theScore Bet, with a target date of Dec. 1, to coincide with the expected launch of sports betting in Missouri, subject to regulatory approvals. We currently operate theScore Bet brand in Ontario, and our OSB product across both the U.S. and Canada will now leverage connectivity with the theScore media app, which has approximately 4 million monthly active users across North America. Our OSB offerings will continue to provide a top of funnel cross-sell opportunity for our Hollywood-branded iCasino, which will remain integrated into our OSB product offering in states were legal, in addition to serving as a standalone iCasino app.”
