Penn Entertainment is set for a smooth transition on December 1, rebranding ESPN Bet to theScore Bet. Users won’t need a new app, re-registration, or face disruptions like the previous Barstool rebrand.
“Apples and Oranges”
CEO Jay Snowden described the upcoming change as different from the Barstool chaos. “We had put our customers through a lot of hoops to jump, and we had a new technology stack,” he said. “We were down for several days. We asked them to come back in and re-register and redeposit. A lot was going on that created noise, in addition to the brand change.”
This time, Snowden expects a seamless transition, retaining users as Penn aims to break even in its interactive business by 2026. The company will cease all ESPN payments by year-end, after ending their 10-year partnership in 2023.
Leaving the ESPN deal, after spending $300 million over two years, is another challenge for Penn, which has struggled in the competitive US sports betting market despite investing billions in acquisitions. The company bought Barstool for $550 million before selling it back to Dave Portnoy for $1, and paid $2 billion for theScore.
Mixed Reactions
Penn’s market reaction was mixed; shares briefly rose before closing 3% lower. ESPN quickly announced DraftKings as its new sportsbook partner from December 1.
Snowden explained the early exit was contractually allowed, as Penn wasn’t meeting market share goals. “And so, you know where it’s headed, why string this along?” he said. “Let’s get together and figure out the best path forward for both companies.”
Penn will focus on profitable markets, using advanced marketing tools for better retention. “We have the ability to target and personalise from a marketing and CRM perspective today that we just didn’t have even a year ago,” Snowden stated. “We’ve got a full marketing plan, and we’re going to be ready to go.”
The company reported $297.7 million in Q3 interactive revenue with a $76.6 million adjusted EBITDA loss. CFO Felicia Hendricks anticipates narrowing losses in Q4, as one-time expenses decrease by 2026.
Snowden concluded by warning about prediction markets posing an “existential” threat to gambling, urging industry action before expansion beyond sports betting.
- SCCG Management. The Gambling Industry’s Global Connector. Access Here.
- Source: SCCGManagement.com