.svg)
Following comments from Penn Entertainment’s chief executive that raised eyebrows in the industry regarding the future of the company’s ESPN Bet platform, another key figure in a Penn digital acquisition has also weighed in on Penn’s sports-betting struggles.
During an earnings call last month, Penn CEO Jay Snowden referenced the mutual break clause that exists for Penn and ESPN-parent Disney to exit their sports-betting partnership if ESPN Bet continues to underperform.
“If for whatever reason we're not hitting the levels that we need to, then obviously as you're approaching that third anniversary, you have a three-year clause in the contract that both sides will have to do what's in their best interests,” Snowden said. “And so, that's always out there.”
“We have a great partner, and we feel like we can continue to make really good progress,” Snowden added. “But if we don't, we've certainly got levers that we can pull if we need to as we conclude 2025 and head into 2026.”
The two companies reached a ten-year deal in 2023 requiring Penn to pay ESPN $150m annually and grant the company up to $500m in stock warrants that vest over the life of the contract to utilize the ESPN brand and receive other promotional services.
John Levy, the founder of theScore, spoke during a panel discussion at the NEXT Summit New York on March 13 in what was Levy's first major public engagement since he and his three sons, Benjie, Aubrey, and Noah, who all had roles within Penn, stepped away from the company last year.
Toronto-based theScore was acquired by Penn in 2021 for a $2bn price tag as part of the company’s efforts to own its digital technology. At the time, theScore's platform was set to be paired with Penn's Barstool Sportsbook brand in the United States while using theScore brand that remains popular in Canada.
Levy expressed frustration that theScore's brain trust and brand did not have a bigger role at the newly combined company, calling it a “tumultuous” partnership.
“I just think you had to give more trust to the people who brought you to the party, which was us,” Levy said. “I think there was a bit of, not conflict, but there was a bit of 'okay, we bought it, so we’ll take it from here, thank you very much, do what you got to do'.”
Penn Entertainment has employed multiple media-brand strategies to try to jumpstart its online sports-betting product in the United States, first choosing to purchase and utilize the Barstool Sports brand before jettisoning it in favor of ESPN.
However, the results have not improved, with ESPN Bet posting a 1.1 percent market share in states where share data is available in December 2024. That was the lowest market-share figure for Penn since the Barstool Sportsbook initially launched in September 2020, according to Vixio GamblingCompliance research.
Meanwhile, theScore brand has remained popular and successful in Ontario, with the company reporting a 22 percent increase in revenues year-on-year in fiscal year 2024 in the province.
Levy said that one problem that has been evident in both partnerships is a lack of harmony between the media brand and the gaming company.
theScore's founder called the partnership between Penn and Barstool “a fiasco from the get-go”.
“Barstool in conception was right, but then in execution fell off … and it’s because there wasn’t this unified approach,” he said.
“[Barstool founder] Dave Portnoy [is] not a stupid guy; he’s very smart. But it’s all about Dave, and unless you manage that properly, unless you control that properly, you’re not going to have the synergies you need.
“And then ESPN shows up,” he added. "You don’t have to be a rocket scientist to figure out maybe ScoreBet north of the border, ESPN Bet [south], but it’s all about how you manage the relationship, how you deal with it, what are your goals, what are your aspirations, and who are the people running this?”
Levy was complimentary of Penn’s land-based casino operations, but somewhat critical of the management of the digital side, including the lack of willingness to stomach the type of early losses made by market leaders like DraftKings and FanDuel.
“Yeah, you are going to lose money, look at all the big guys in the business, they're finally turning the corner, right, but they were straight about it,” Levy said. “And here it's kind of like if you're living quarter-to-quarter and not dedicating the time and the resources and the management to sort of fix it, you lose credibility and I think it's a shame.”
