In a surprising development, ESPN has announced that it will end its exclusive online sports-betting partnership with Penn Entertainment ahead of schedule and is instead entering into a new alliance with DraftKings. The decision marks a significant pivot in the sports media-betting relationship landscape.
Background: The Penn Deal and Its Shortcomings
Two years ago, Penn and ESPN struck what was billed as a 10-year deal for the ESPN-branded sportsbook in the U.S. Under that agreement, Penn paid annual fees to ESPN and committed to building the “ESPN BET” brand in the online sports-betting market.
Fast forward to today: the partnership is being terminated early. Reports indicate that the parties have mutually agreed to wind down the deal and transition. Payments from Penn to ESPN will stop in the fourth quarter of 2025. The brand will be re-worked, and customer assets will shift to Penn’s new platform.
The Pivot to DraftKings
ESPN has stated that it’s forging a multi-year agreement with DraftKings to become the network’s official sportsbook and odds provider. The collaboration is said to begin integration in December, positioning DraftKings within ESPN’s ecosystem of content, platforms and direct-to-consumer services.
ESPN’s chairman noted that the change reflects the company’s focus on creating a seamless experience for sports fans combining media, live events and betting in an integrated fashion.
Why the Shift? Strategic & Structural Reasons
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Market performance: The initial ambition was for ESPN BET to capture significant market share. But indications suggest the performance fell short of expectations, prompting a re-assessment.
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Brand alignment: ESPN appears to favour an operator with scale, a strong consumer base and technological fluency. DraftKings brings those attributes.
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Operational realignment: For Penn, shifting away from the ESPN brand may reduce fixed media spending, enable more flexibility and simplify its digital ecosystem.
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Regulatory and reputational factors: As betting becomes more tightly regulated, media companies must balance promotional partnerships, brand integrity and operational risk.
Impact and What to Watch
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For Penn Entertainment: The company will rebrand the previous ESPN BET platform to “theScore Bet” and retain the customer data of users to transition them. Its focus will shift more heavily toward its iCasino business and retail operations.
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For ESPN: By partnering with DraftKings, the network can embed betting features within its own platforms, improving funnel control and user experience. This signals a move toward deeper media-to-betting integration.
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Industry wide: The move may spark further consolidation, re-negotiation of media-betting partnerships, and deeper examination of how sports rights, streaming and wagering converge.
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Consumers: Users of the ESPN BET app and platform will need to adapt to the changes branding will shift, incentives may change and their pathway into betting may alter.
Key Takeaways
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ESPN is ending its 10-year commitment with Penn early and launching a new strategic partnership with DraftKings.
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The move reflects the evolving business model of sports media, where content, digital platforms and betting are increasingly interwoven.
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For Penn, the realignment allows cost reduction and refocus on existing assets; for ESPN, it offers scale and integration.
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The broader sports-betting ecosystem is likely to see more such strategic realignments as media companies and operators reassess their roles.
Closing Thought
The sports-betting world has entered a new era. What started as branding alignments and licensing agreements is increasingly about integrated digital-media ecosystems where the viewer, the platform and the wager are parts of one experience. ESPN’s shift away from Penn and toward DraftKings underscores how the industry is evolving faster than ever.
