PENN Entertainment Eyes iGaming Growth After Dumping ESPN Bet

Hollywood Casino is poised to take a step forward following PENN Entertainment’s split with ESPN Bet.

The gaming company, which also bought and sold Barstool sportsbook, announced on Thursday it was ending its deal with ESPN just two years into the 10-year agreement.  ESPN Bet had failed to take hold in a competitive sports betting market, despite aiming to acquire a 10 percent market share within its first year of operation.

With the sports betting adventure in the rear-view mirror, PENN appears to be shifting its focus to online casino gaming.

PENN looks to iGaming

PENN CEO and President, Jay Snowden, shared during a Q3 investor call on Thursday that the company’s online casino product, Hollywood Casino, had achieved great success.

According to Snowden, PENN hit a quarterly revenue record thanks to the success of Hollywood Casino. He also revealed that their iGaming arm was up 40 percent year-over-year in Q3, giving them the confidence to move on from ESPN Bet.

“When we first announced our partnership with ESPN, both sides made it clear that we expected to compete for a podium position in the space,” Snowden said in a press release. “Although we made significant progress in improving our product offering and building a cohesive ecosystem with ESPN, we have mutually and amicably agreed to wind down our collaboration. We plan to realign our digital focus on our growing iCasino business, while continuing to capitalize on our omnichannel advantage as the nation’s leading regional retail casino operator.”

Hollywood Casino is only available online in four states: Michigan, New Jersey, Pennsylvania and West Virginia. Only three other states even allow for legal online casinos.

Meanwhile, all gaming licenses assigned to ESPN Bet will be shifted to PENN-owned theScore Bet, pending approval in states where ESPN Bet had been licensed.

Goodbye, ESPN Bet

PENN agreed to a 10-year, $2 billion deal that was signed in 2023. The company sold Barstool sportsbook, which it had purchased for a total of $551 million, for just $1 to facilitate the deal.

PENN and ESPN Bet will go their separate ways starting on Dec. 1. ESPN already announced a new partnership with DraftKings, which will become the popular sports platform’s official sports betting odds provider. 

theScore Bet will offer sports betting odds, though PENN appears to be focused on the success of its iGaming brand. 

Notably, the difference in market size between legal online casinos (seven legal states) and sports betting (39 legal states) offers more potential for growth, assuming legislators in illegal iGaming states follow the national trend of gambling acceptance and push for legalization.

“PENN’s iCasino forward approach has clear long-term alignment to our core business, which will focus on cross-sell opportunities across our ecosystem and enhanced connectivity to our 33-million-member PENN Play loyalty program,” Snowden said. “Our OSB offerings will continue to provide top of funnel acquisition and cross-sell opportunities for our Hollywood-branded iCasino, which will remain integrated into our OSB product in states where legal, in addition to serving as a standalone iCasino app.”

The general expectation is that PENN will revamp its Hollywood Casino app as it continues to push it toward the center of its portfolio.