ESPN Bet: what Penn's $2 billion media deal delivered
Penn committed $1.5 billion in cash plus about $500 million in warrants to run ESPN Bet for ten years. The sportsbook lasted two. The filings show the terms, the losses and the exit.
ESPN Bet, Penn Entertainment's sportsbook under an ESPN licence, launched in November 2023 on a 10-year deal with a headline value of about $2 billion. It lasted two years. In February 2025 Penn expected its own-markets share to rise from 2.35% to 4.7%; warrant thresholds started at 20% nationally. The alliance ended December 1, 2025; the sportsbook became theScore Bet.
Results at a glance
| Metric | Value | Note |
|---|---|---|
| Deal value | $1.5B cash over 10 years plus warrants for about 31.8M Penn shares, valued at about $500M | Commitment at announcement, August 8, 2023 (Penn 8-K); Penn did not publish a total paid |
| Term | 10 years announced; launched November 14, 2023; alliance ended December 1, 2025 | Termination agreed November 5, 2025; the old name was allowed until approvals, no later than December 15, 2025 |
| ESPN Bet states | 17 at launch; 20 live markets plus New York by February 2025 | Launch count from Penn; February 2025 count reported by Covers, not independently verified |
| Market share | Warrant thresholds of 20%, 22.5% and 25% of U.S. online sports betting; Penn's February 2025 expectation: 2.35% to 4.7% of its own markets by end-2025 | Reported by Covers from Penn's February 2025 call, not independently verified. Penn's own-markets share, excluding New York; the warrant thresholds are U.S.-wide |
| Interactive segment adjusted EBITDA(R) | About $1.10B of losses, Q4 2023 through Q4 2025 | Our sum of Penn's reported figures; the segment also includes theScore in Canada and iCasino, and December 2025 ran as theScore Bet |
| Exit terms | ESPN kept vested warrants for 7,957,210 shares at a $28.95 weighted strike; unvested and performance warrants forfeited | $825.0M Interactive impairment booked in Q3 2025 |
Figures run through Penn's full-year 2025 results, published February 26, 2026. Last updated October 30, 2026.
Context: Penn and ESPN Bet
Before ESPN, Penn's U.S. sportsbook ran as Barstool Sportsbook. On the day it announced the ESPN deal, August 8, 2023, Penn sold all of Barstool Sports back to founder David Portnoy. It did not disclose a price and booked a $923.2 million loss on the disposal for 2023.
The ESPN side was a brand licence, not a sportsbook. Penn got the exclusive right to the ESPN BET trademark for U.S. online sports betting, plus media and marketing services from ESPN. Penn ran the product, the risk and the licences, so the footprint followed its own state approvals; licensing differs by state, as our guide to whether online gambling is legal in the US shows.
The ESPN Bet sportsbook and the ESPN Bet app went live on November 14, 2023 in the 17 states where Penn offered online sports betting. Penn's online casino kept its own Hollywood Casino brand.
What they did
Penn committed to pay for the brand over time. It agreed to pay ESPN $1.5 billion in cash over the initial term and granted warrants for about 31.8 million shares, vesting evenly over ten years. A further tranche of up to about 6.4 million shares would vest only if ESPN Bet hit U.S. online sports betting market share thresholds. Penn's investor deck set those thresholds at 20%, 22.5% and 25%.
The same deck framed the upside. It modelled illustrative cases at 10%, 15% and 20% share and put the Interactive business's annual long-term adjusted EBITDA potential at "$500 million to $1 billion+". It also gave either party the right to exit at the end of year three if share sat below an undisclosed threshold.
The launch brought volume. Penn reported more than 1 million first-time depositors in the fourth quarter of 2023, and its PENN Play loyalty database grew by 1.2 million members, 90% of them from ESPN Bet. The cost showed up in the same quarter: the Interactive segment lost $333.8 million of adjusted EBITDA in Q4 2023.
Through 2024 Penn worked on the product rather than the brand. New York went live in September 2024, Covers reported. Penn reported a parlay mix above 30% of handle in December 2024 and January 2025 and planned live streaming inside the app and tie-ins with ESPN's NCAA bracket game.
Results
For terms such as handle, hold and GGR used below, see our sports betting terms glossary.
| Period | Interactive revenue | Tax gross-up included in revenue | Adjusted EBITDA(R) |
|---|---|---|---|
| Q4 2023 | $31.5M | $107.0M | -$333.8M |
| FY 2024 | $959.9M | $435.6M | -$499.5M |
| FY 2025 | $1,302.6M | $588.3M | -$267.5M |
Penn's Q4 2023 release does not explain why reported revenue ($31.5 million) is smaller than the tax gross-up it includes ($107.0 million), so compare periods using adjusted EBITDA. FY 2025 includes December, the first month under theScore Bet.
Losses narrowed: $267.5 million in 2025 against $499.5 million in 2024. Revenue grew, but much of the improvement came from iCasino, where Penn reported record quarterly revenue and growth of over 60% year on year in Q4 2024, and nearly 40% in Q3 2025.
Market share stayed far from the warrant thresholds. On the February 2025 call, as Covers reported, Penn expected its share of its 20 live markets, excluding New York, to reach 4.7% by the end of 2025, and CEO Jay Snowden said more work remained before the partnership delivered its full value. Penn did not publish a U.S.-wide share; every figure found is well below 20%.
What did not work
What happened to ESPN Bet? On November 5, 2025, Penn and ESPN signed an agreement to end the alliance early, effective December 1, 2025. Penn's release called it a mutual decision. Snowden said both sides had "expected to compete for a podium position". Neither company gave another reason.
The exit terms, from Penn's 8-K and Q3 2025 release:
Penn's U.S. sportsbook moved to theScore Bet, targeted for December 1, 2025, subject to regulatory approvals. Until approvals came, Penn could keep the "ESPN BET Sportsbook" name, no later than December 15, 2025 unless extended.
Penn paid $38.1 million in Q4 2025 for remaining fees owed through the termination date, plus $5 million after it for traditional media supporting theScore Bet or Hollywood iCasino. Those payments settled what Penn owed.
ESPN kept vested warrants for 7,957,210 shares, about a quarter of the base grant by our count, and forfeited the rest, including all performance warrants.
For 15 months ESPN may not license the ESPN BET brand to another U.S. sportsbook for a rebrand, or run a U.S. sportsbook under that name itself.
In the same quarter Penn booked an $825.0 million goodwill impairment on the PENN Interactive reporting unit and a net loss of $865.1 million. The release did not tie the charge to the termination. Penn kept a database of 2.9 million digital users acquired during the ESPN relationship. The new plan: refocus on U.S. iCasino and Canada, and replace fixed media spending with "performance based and regionally targeted marketing". Penn's full-year release later called December 2025 its first month operating as theScore Bet in the U.S.
A day after the termination deal, on November 6, 2025, ESPN named DraftKings its exclusive official sportsbook and odds provider from December 1, 2025. ESPN BET stayed alive as a content brand, anchored by the show ESPN BET Live, with DraftKings integrations.
Separately, on October 23, 2025, federal prosecutors announced charges in an NBA-linked betting investigation, as CBS News reported. Some headlines connected the two stories. No Penn or ESPN statement did.
Takeaways for affiliates
Treat a rebrand as a tracking event. A move from ESPN Bet to theScore Bet can change domains, apps and landing pages; Penn's 8-K also removed the link between ESPN accounts and ESPN BET accounts at termination. Before a cutover, confirm your links and postback (S2S) tracking still fire, and ask for a written mapping of old player IDs.
Get brand-transition terms in writing. RevShare tails depend on players staying with the operator through the change; CPA qualification may reset if players re-register. Ask the program manager which applies, and check the rules in our CPA vs RevShare vs Hybrid guide.
Expect branded search to linger. Review pages and branded landing pages built around "ESPN Bet" keep attracting visits after a rebrand. Update them, redirect old branded URLs and explain the change instead of deleting the page.
Read a media partnership by its exit clauses. The year-three share test and the 20% warrant threshold told investors what success meant from day one. Track the operator's own disclosed targets, not the launch buzz.
Judge a media-led launch by later share, not first sign-ups. ESPN's reach brought Penn over a million first-time depositors in one quarter, yet 15 months later Penn aimed for under 5% of its own markets. For what the market leaders spend to hold share, see our sportsbook marketing spend case.
Watch for the shift to performance budgets. Penn said it is moving money from fixed media to performance-based, regional marketing. That is the budget affiliates compete for.
FAQ
What happened to ESPN Bet?
Penn and ESPN ended their deal early, effective December 1, 2025, and Penn's U.S. sportsbook became theScore Bet (the 8-K let the old name stay until approvals, no later than December 15). ESPN BET continues as ESPN's betting content brand, with DraftKings integrations.
How much did Penn pay ESPN?
Penn committed $1.5 billion in cash over ten years plus warrants for about 31.8 million shares, valued at about $500 million in 2023. It did not publish a total paid. Cash payments ended with $38.1 million in Q4 2025 and a final $5 million; ESPN kept only the vested warrants.
Who replaced Penn as ESPN's sportsbook partner?
DraftKings. ESPN announced a multi-year deal on November 6, 2025, naming DraftKings its exclusive official sportsbook and odds provider from December 1, 2025. Financial terms were not disclosed.
In which states was ESPN Bet live?
It launched in 17 states on November 14, 2023, the states where Penn held online sports betting approval. By February 2024 Penn listed 18 sports betting jurisdictions, a count that includes Penn's non-ESPN products. New York followed in September 2024. This is a summary, not legal advice.
