ESPN Bet shutting down as network strikes DraftKings deal in stunner

Just another billion-dollar deal down the drain.

Penn Entertainment announced Thursday it was opting out of its sports betting partnership contract with ESPN, ending what was initially a 10-year, $1.5 billion deal.

ESPN will now become the new official betting partner of DraftKings Sportsbook, as first reported by Front Office Sports.

“We will operate with a more efficient cost structure, including replacing fixed media spending … the realignment will free up resources to strategically invest in the North American markets,” Penn announced in a statement.

Penn and ESPN’s partnership fizzling comes a little more than two years after they partnered in August 2023 to bring the betting community ESPN Bet.

The deal ends with over $300 million sent from Penn to the WorldWide Leader, though the results were mostly a disaster in terms of market share gains.

Penn publicly stated a goal of 20 percent market share in the U.S. online sports betting market by 2027.

However, it achieved only 4.7 percent as of 2025, up only marginally from the 2.2 percent held by Barstool Sportsbook in partnership with Penn.

ESPN’s DraftKings union begins Dec. 1.

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“Our betting approach has focused on offering an integrated experience within our products,” ESPN chairman Jimmy Pitaro said in a release. “Working with DraftKings, a leader in the space, will allow us to build upon that foundation, continue to super-serve passionate sports fans and grow our ESPN direct-to-consumer business. We are excited about this new collaboration with DraftKings.”

This story will be updated during Penn’s earnings call.