When Penn Entertainment struck a $2 billion deal with ESPN in 2022, the vision was clear: merge the most recognizable brand in sports media with an ambitious sportsbook to disrupt the industry. Fast forward to 2025, and ESPN Bet is struggling with a mere 2.35% market share, falling drastically short of its 20% goal for 2027. With mounting losses and fierce competition, the question now is whether ESPN Bet is worth saving or if Penn should cut its losses before the damage worsens.
The core issue is that brand power alone does not guarantee success in sports betting. FanDuel (43%) and DraftKings (34%) dominate the market, not just through name recognition, but through years of refined user experience, aggressive promotions, and an ecosystem that keeps bettors engaged. ESPN Bet entered the fray with no compelling differentiation, making it difficult to lure loyal customers away from established platforms. If a bettor already has accounts with top sportsbooks offering seamless wagering, live betting, and generous odds boosts, why would they switch to an unproven option?
Adding to the struggles is ESPN Bet’s cautious approach to promotional incentives. States like New York, with its punishing 51% tax rate, make it difficult for operators to turn a profit, yet FanDuel and DraftKings continue investing in massive sign-up bonuses to protect their market share. ESPN Bet, however, hesitated in offering competitive welcome bonuses, making customer acquisition an uphill battle. Without aggressive incentives, ESPN Bet never gave new users a strong reason to sign up, and in a market where switching costs are virtually zero, that hesitation has proven fatal.
Beyond market forces, ESPN Bet’s slow rollout and lack of product innovation have also contributed to its lackluster performance. The transition from Barstool Sportsbook to ESPN Bet should have been an opportunity for a fresh start, yet the platform failed to leverage ESPN’s vast media assets in a way that meaningfully enhances the betting experience. The integration of real-time betting insights, dynamic in-game wagers, and personalized sports betting content has been minimal, leaving bettors unimpressed. With the ability to embed live odds and promotions into ESPN broadcasts, the company has an untapped goldmine that remains frustratingly underutilized.
Penn Entertainment now faces a pivotal decision. With its Interactive division posting a $109.8 million loss in Q4 2024, the financial strain is evident.
The company’s opt-out clause in 2026 provides an exit strategy, and CEO Jay Snowden has already signaled that walking away is on the table. If ESPN Bet continues on its current trajectory, pulling the plug may be the most financially responsible move.
But is ESPN Bet beyond saving? That depends on whether Penn is willing to take drastic action. It would require rethinking its promotional approach, innovating the betting experience, and fully embedding itself into the ESPN ecosystem in a way that captures bettors' attention. If these changes aren’t made soon, the market will decide for them. And in the unforgiving world of sports betting, second chances are rare.
