ESPN Bet Termination Likely: Analyst Insights on Online Sports Betting
Is ESPN Bet Termination ‘Increasingly Likely’ for Online Sports Betting, Says Analyst
- Penn Entertainment isn’t making enough strides in online sports betting
- Recent ESPN Bet user acquisition may be trending below expectations
- Penn and ESPN can mutually opt out of their deal in August 2026
ESPN Bet termination at Lotus Asia. Analysts suggest that the ESPN Bet partnership is increasingly likely to be terminated, raising questions about the future of online sports
Despite efforts to improve the integration between ESPN’s various offerings and the betting app, ESPN Bet’s performance metrics have not reflected significant improvement. Recent analyses of state-level online sports betting data indicate that the handle for ESPN Bet has decreased quarter over quarter throughout the July to September period, showing only modest recovery as the football season starts.
“While the initial share pullback was attributed to retention and monetization issues, it appears that recent user acquisition may also be lagging behind expectations. Data from Sensor Tower indicates that ESPN Bet’s share of app downloads fell year over year during July and August, with only a minor uptick in September,” observes Stantial.
Stantial labelled Penn as a “best-in-class regional brick & mortar operator,” maintaining a “hold” rating and a $19 price target for their stock.
Is ESPN Bet Facing Termination?
Penn’s upcoming third-quarter results presentation is scheduled for November 6. While Stantial acknowledges that it may be too early for Penn’s CEO, Jay Snowden, to divulge specific strategies about the fate of ESPN Bet, the analyst signals that it remains clear that the online sportsbook is not achieving the expected growth that Penn’s investors had hoped for.
“It’s perhaps still early for management to reveal strategies. However, the steady handle share, even amid improvements in product integration, points towards our belief that the most probable scenario will be a termination of the ESPN partnership when they have the mutual opt-out option available in late 2026,” he adds.
Penn Entertainment’s online sportsbook has not attained its desired market share as it nears its third anniversary in August 2026. At this milestone, either the gaming company or ESPN can opt-out of the partnership agreement. Further insights from Penn’s CEO on the termination option were noted during the company’s fourth-quarter earnings call earlier this year. The implication is stark: if Penn does not drastically improve its market share, ESPN Bet may only have about ten more months of operation.
In a previous March note, Stantial posited that “the most value-accretive outcome for Penn would be to end the ESPN Bet agreement and sell theScore, which could potentially remove the company entirely from the online sports betting sector.”
Why Termination Might be Beneficial
Various analysts and investors have been vocal about the fact that Penn’s recent missteps with their sports betting approach, particularly with Barstool Sports and ESPN Bet, have caused market stakeholders to focus on negative outcomes that overshadow the strengths present in the Penn investment narrative.
However, there have been notable positives, including:
- Strong growth in iGaming segments
- Solid performance at several recently refurbished regional casinos
“For Penn’s stock, the recent trends in sports betting handle make a compelling case for the potential termination of the ESPN Bet relationship. Should this occur, it could eliminate a major overhang, allowing investors to concentrate more closely on PENN’s retail casino and iGaming businesses. Here, we continue to see robust growth in same-store gross gaming revenue (GGR),
