ESPN Shifts Strategy,Exits Direct Sports Betting with DraftKings Partnership
ESPN is recalibrating its approach to sports betting,announcing a move away from operating its own sportsbook and toward a content and referral partnership with draftkings. The shift, effective December 1, marks a meaningful change for the sports media giant after a largely unsuccessful two-year foray into direct sports wagering.
The decision comes as a joint agreement between ESPN and PENN Entertainment, finalized on Thursday, November 6. According to the release, ESPN BET will transition from a sports gambling provider to a sports betting content brand, focusing on providing data and directing users to partners like DraftKings.
In a separate announcement, ESPN revealed it will collaborate with DraftKings, designating the company as its official sportsbook and odds provider starting December 1. “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,” stated ESPN president Jimmy Pitaro.
The move represents a reversal from a $2 billion deal struck in 2023, where PENN Entertainment agreed to operate the ESPN BET platform in an attempt to challenge established market leaders DraftKings and FanDuel. However, ESPN BET struggled to gain significant traction, reportedly capturing only 3% of the sports betting market share as of October, according to research from Casino Reports and Deutsche Bank. In contrast, DraftKings and FanDuel controlled approximately 35% and 30% of the market, respectively.
While ESPN BET’s overall market share was limited, it achieved a slightly higher presence in Michigan, holding 5.1% of the market according to Play Michigan.
The path to this pivot was complex. PENN Entertainment initially entered the online sports gambling arena by acquiring Barstool Sports in February 2023 for around $551 million, rebranding the Barstool Sportsbook as ESPN BET. However, just eight months later, in August 2023, PENN Entertainment sold Barstool Sports back to its founder, Dave Portnoy, and began preparations to rebrand its sportsbook once again. PENN now intends to rebrand its sportsbook to theScore Bet for U.S. operations, leveraging an existing brand already established in Ontario.
This strategic shift underscores the challenges of entering the competitive sports betting market and the value of leveraging existing expertise.ESPN’s decision to focus on content and referral suggests a belief that its strength lies in its ability to inform and engage sports fans, rather than directly operating a complex gambling platform.
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