Inside PENN’s costly quest to turn flashy partnerships into market dominance as it ends ESPN deal

PENN Entertainment, once the unassuming Penn National Gaming with little more than racetracks and regional ambition, has spent decades leveling up from modest racing outfit to one of America’s largest casino and racing powerhouses. Along the way, the company scooped up properties with the enthusiasm of a tourist collecting souvenirs, sometimes strategic, sometimes simply because they were there.

Acquisitions alone did not satisfy the corporate appetite. PENN also hurled itself into a series of wildly ambitious partnerships, most recently with ESPN Bet, which it terminated on Thursday (November 6). Some shone for a glorious moment, while others collapsed under the weight of high expectations, high costs, or changing market realities.

In short, the journey has been fast and bumpy.

PENN’s partnerships: early major failures

In 2006, Penn National took a swing at acquiring Harrah’s Entertainment. The attempt fizzled out, but the message was clear: PENN was tired of being known as the plucky regional operator and was ready to audition for a national spotlight.

Not long after, in the heady days of 2007 and 2008, PENN went even bigger and chased a $6.1 billion buyout that would have taken the whole company private. It was a grand vision, the kind of move that makes bankers shareholders fairly nervous. The deal collapsed before the ink even thought about drying, a sign that early efforts at sweeping reinvention and high stakes transformation were already bumping into real world turbulence.

Barstool Sports: a meteoric rise followed by a rapid unwind

In 2020, PENN came back into the spotlight and snapped up a 36% stake in Barstool Sports for about $163 million, complete with an option to buy the whole circus within three years. The partnership generated enormous buzz. PENN’s stock shot upward after the announcement, promptly collapsed when the pandemic hit, then rocketed to all time highs once the Barstool Sportsbook app arrived to distract investors from reality. By early 2021 the stock was up nearly 400% compared with the year before, a performance Wall Street analysts described as remarkable and everyone else described as possibly supernatural.

However, the Barstool relationship proved unstable. PENN went ahead and bought the entire company in early 2023, only to hand it back to founder Dave Portnoy a few months later for the princely sum of one dollar. The transaction looked less like a sale and more like the corporate version of sliding the keys across the table while saying please take this off our hands.

In the end, PENN accepted substantial losses in exchange for a clean break from a brand that came with nonstop controversy and enough regulatory headaches to keep several lawyers employed for eternity. The retreat was total, the lesson expensive, and the post breakup silence was probably very peaceful.

ESPN Bet: a high profile partnership that ended early

In August 2023, PENN rolled out a ten year agreement with ESPN that would transform its sportsbook into ESPN Bet. Public estimates put the price tag at around $1.5 billion dollars. The idea looked simple on paper. The company would provide the gambling machinery, ESPN would provide the enormous sports audience, and together they would create a blockbuster betting brand that would dominate the country.

Big News! This football season, @ESPNBET is bringing together media, betting and fantasy like never before with FanCenter, a new dedicated hub within ESPN BET that will take personalization to the next level. pic.twitter.com/y7Fe0phrDa

— PENNEntertainment (@PENNEntertain) August 4, 2025

PENN launched ESPN Bet in seventeen states in November 2023 and kept adding more jurisdictions in 2024. For a brief moment, the rollout felt like the start of a new era, the kind where executives give inspirational speeches and everyone nods as if they are witnessing history.

Then the numbers arrived. By late 2025, publicly available data showed that ESPN Bet had secured only a sliver of the United States online sports betting market. This was significantly less than the sweeping share PENN once envisioned. The financial logic of the entire venture started to wobble. Analysts whispered, shareholders frowned, and accountants probably developed migraines.

Eventually, PENN and ESPN agreed to call it quits early, with the partnership officially ending on December 1, 2025. PENN will stop making payments to ESPN after the fourth quarter of 2025 and will revive its sportsbook under the company’s existing theScore Bet identity via a rebrand.

Possible causes of repeated partnership failures

A few unmistakable themes emerged from PENN’s growing collection of ill fated partnerships. Time after time, the company tried to harness the star power of major media brands in order to crash the gates of the online betting world. In theory, a big media name should unlock customers by the truckload.

In practice, a shiny logo did not magically turn casual viewers into loyal bettors, no matter how many promotional codes fluttered across their screens. The financial structure of these arrangements made things even messier. Each deal demanded heavy up front spending or long term payment commitments that became increasingly painful when the expected revenue refused to show up.

The wider landscape was not doing PENN any favors either. The United States sports betting market changed so quickly that even seasoned analysts needed seat belts. New competitors crowded in, state regulations shifted like sand, and the cost of acquiring customers kept climbing. The result was an environment where even well known sportsbook brands had trouble attracting large user bases, let alone keeping them around. PENN was not alone in feeling the squeeze, but its high profile partnerships made the pressure far more visible and far more expensive.

What comes next for PENN

PENN now says it will turn its attention back to the parts of the business that actually pay the bills. That means a renewed focus on online casino operations and the sturdy regional casino empire that has carried the company for decades. In recent disclosures, leadership explained that ending the ESPN agreement will give PENN a cleaner cost structure and free up cash for areas that offer real, sustainable opportunity. This means it is time to stop renting someone else’s star power and start investing in what already works.

The next challenge is far less glamorous but far more important. PENN must prove that it can generate momentum with its own brands and its own platforms. No celebrity partners, no splashy media alliances, no billion dollar shortcuts. Just a company, its customers, and the long road back to a strategy that does not involve handing over piles of money for someone else’s logo.

Featured image: PENN Entertainment

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