ESPN Bet Struggling For Market Share Year After LaunchPenn Digital Division Lays Off Employees |
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Penn Entertainment announced a 10-year, $2 billion deal with ESPN last August to launch a sports betting app using the network’s brand and resources. Almost one year later, recent reports have detailed how the ESPN Bet platform has failed to gain much market share.
The gaming operator announced layoffs of about 100 employees in the Penn digital division this week and plans to focus on growing ESPN Bet.
The news comes as the platform recently ranked sixth among sports betting operators with just 3.2% market share in the second quarter, down from 4.7% in the first quarter. By Contrast, DraftKings is the national leader with 38% and FanDuel comes in second with 36.5%.
Penn CEO Jay Snowden outlined plans for the company to turn things around in a memo to employees obtained by Legal Sports Report.
“This week, we are implementing changes at PENN Interactive to help streamline reporting lines, enhance operational efficiencies, and leverage shared resources across Penn,” Snowden noted. “Unfortunately, these changes will result in a limited number of team member separations. While it is difficult to see colleagues impacted, we deeply appreciate their contributions and are committed to supporting them through the transition.”
Looking For Growth
Snowden went on to outline how the layoffs are in line with organizational changes after acquiring theScore, a Canadian sports media and gaming platform, in 2021.
CNBC reports that investors have been impatient with the company’s growth and one major investor has even called on the board to put Penn up for sale. The company’s share price has been down about 25% this year, but a new ESPN Bet app is expected to be unveiled this fall during football season.
Snowden notes that Penn was now looking forward to “upcoming product enhancements and a deeper integration into the ESPN ecosystem.”
Some critics of the original deal believed the two companies may have waited too long to make use of the ESPN brand with the competitive sports betting market already seeing major brand awareness from some of the early players in the industry.
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