ESPN Bet could be on life support a little more than a year into a deal between gambling operator Penn Entertainment and ESPN owner Disney.
During a recent earnings call, Penn CEO Jay Snowden hinted that his company could opt out of the $2 billion licensing and marketing deal if ESPN Bet’s underwhelming results don’t improve by the end of 2026.
That would be a shocking result for a deal that made big headlines and intended to disrupt the nascent US sports betting industry. So far, ESPN Bet is an also-ran performing not much better than its predecessor, Barstool Sportsbook. It has about 2-3% of the market by total money wagered and about 1% of all sports betting revenue. (FanDuel and DraftKings mostly combine for between 70-80% of the market by both metrics.)
Was the writing for ESPN Bet on the wall from the jump? Truth be told, even the most pessimistic forecasts for ESPN Bet didn’t see this coming. But in hindsight, we can break down where it might have gone wrong.
Media-branded sportsbooks have been a poor idea in the US
The idea was to put the most iconic sports media brand in America on a sportsbook and start printing money. Using ESPN to market the sportsbook organically and more traditionally would create a critical mass of users.
The underlying idea for ESPN Bet is not complicated, and it sounds like a great idea on paper. There had been a great example of the model working in the UK via Sky Bet, now owned by FanDuel’s parent company, Flutter.
But the users haven’t materialized (or at least they haven’t stayed), and betting activity and revenue have predictably suffered as a result.
But should we be surprised? Arguably not. We have already seen a handful of media entities throw their names on a sportsbook, and none have fared very well. Let’s consider the small graveyard of such US sportsbooks:
- Barstool Sportsbook
- FoxBet
- SI Sportsbook
- Maxim Bet
- Fubo Sportsbook
Those last three were never serious efforts, nor were they premium brands. But they underline how the strategy of leveraging a media brand was perhaps always flawed in the US.
Then we turn to FoxBet, which was shuttered before the ESPN Bet deal even came to fruition. That effort was a serious one, a joint venture between Flutter and Fox Corp. However, leveraging the Fox Sports brand and audience didn’t result in much market share.
Barstool (once owned and operated by Penn as well) is the best of the lot, but that “success” was really only a third-tier sportsbook that was later thrown away by Penn for $0. To be fair, the Score Bet—also owned by Penn—is doing well in Ontario, but it was shuttered in the US.
When Penn walked away from Barstool for a deal with Disney, the logic was that the ESPN brand was so much more well-known and the universe of customers so much bigger that it couldn’t possibly fail.
Well, we now know the brand name and the audience has not converted to sports bettors so far. But there’s more to the story than that.
ESPN Bet started way too late
“What will ESPN do in sports betting?” was a constant refrain over the first five years of expanded legal sports betting in the US.
In the early days, ESPN was content to sit it out and profit from sportsbook marketing spend. In his first stint on the job, Disney CEO Bob Iger said as much in early 2019.
“I don’t see The Walt Disney Company, certainly in the near term, getting involved in the business of gambling, in effect, by facilitating gambling in any way.”
That strategy was probably decent for ESPN’s bottom line, as it happily ran commercials and made marketing deals with the major US sportsbooks.
If ESPN wanted to get into US sports betting materially, with its name on a sportsbook, it needed to act far more decisively than it did. Again, that’s easy to say from the comfort of 2025, but it’s the reality as we sit here.
So many states legalized online sports betting, and so many customers had already acquired it before ESPN Bet even glimmered in Penn’s eye. Launching in late 2023 was a difficult starting point for a new brand.
But it’s also not the whole answer. In the US, we’ve seen international powerhouse Bet365 slowly and methodically grow its position and upstart Fanatics Sportsbook make a dent to perhaps be the fourth biggest US sportsbook.
So, where else did it go wrong?
Growing the market or stealing market share were difficult asks
Because of the late start, ESPN Bet was confronted with the reality that it wasn’t entering into a green-field opportunity. It either had to create new sports bettors from its audience and the appeal of its brand, or it had to take market share from other sportsbooks.
The first option was at least feasible. But again, the relative failure of other media brands in the space – including Barstool! – made that a seemingly difficult ask at scale.
That leaves taking bettors and marketshare from DraftKings, FanDuel and the other sportsbooks. Those are the same bettors that had been bludgeoned over the head with ads from those sportsbooks for years at … wait for it … ESPN.
If ESPN Bet had something special going for it other than the brand and its marketing might, it could have had something. But it doesn’t have better promotions. It’s not a superior product to other sportsbooks. It’s one of the worst sportsbooks for uptime.
Other than the ability to link your regular ESPN account to the sportsbook (and even that doesn’t seem to be helping to drive revenue or more betting), there’s not a great value proposition for the bettor. ESPN bet had many of the same problems Penn had when running Barstool.
Some combination of growing the pie and stealing pie from others might have worked. But ESPN Bet has been able to do neither.
The move from Barstool was terrible timing
There are worse times for changing over a sportsbook than what Penn executed. But the timing was definitely suboptimal.
Penn moved off Barstool Sportsbook and announced the ESPN deal in August 2023. ESPN Bet went live in late November of 2023. That left months of a “zombie” Barstool Sportsbook that was a placeholder for the new brand. Penn more or less missed out on the first three months of the football season.
If Penn had wanted to move off of Barstool to ESPN, it arguably should have planned a relaunch that coincided with the start of a football season. That’s by far the most crucial time for customer acquisition in sports betting.
It’s also not clear how much the timing would have mattered. ESPN Bet famously spent a lot on customer acquisition and promotional efforts at relaunch; for a time, it was the No. 1 app in the App Store. Some of that was from enticements to move existing users (more on that in a bit) and some new customer acquisition. Numbers spiked in December and January but have been more or less on the decline ever since.
Shuttering the Barstool brand probably meant losing Barstool customers
The starting point for ESPN Bet after Barstool wasn’t great, but it wasn’t terrible, either. In retrospect, Barstool had successfully converted a lot of bettors, but the path to growth beyond <5% of the market was rough. It had slowly been in decline heading into the 2023 football season.
If ESPN Bet had retained the existing Barstool user base and added from there, we would probably be having a different conversation right now. We don’t know how much attrition there was from one sportsbook to the next. And while there wasn’t any bad blood between founder Dave Portnoy and Penn, I think it’s safe to assume every Stoolie didn’t automatically convert to an ESPN Bet user. We also saw Barstool convert to a de facto marketing arm of DraftKings just six months after Penn sold it, further hurting any retention of Stoolies.
In any event, the move from one sports brand to the other was not one where you could have expected 100% retention, and the number of bettors moving on from ESPN Bet was probably significant.
What’s next for ESPN Bet?
It’s not impossible for Penn and ESPN Bet to turn things around in the next two years. But the odds aren’t in their favor.
March Madness looms as a major acquisition opportunity, but then we’re into the doldrums of summer, when sportsbooks are still open for business but with a lot less activity.
So ESPN Bet looks to football season as its next realistic chance to turn things around. There’s not a lot of reason to think things are going to get demonstrably better, or that anything is going to change. And if Penn’s CEO is signaling that it’s already considering getting out of the ESPN Bet deal, it feels pretty likely that’s the outcome we’ll get.
