By Jaspreet Singh
(Reuters) -ESPN signed a new deal making DraftKings its official sportsbook and odds provider, after ending a U.S. online sports betting partnership with casino operator PENN Entertainment.
Starting December, online sports betting company DraftKings’ sportsbook and daily fantasy contests will be added across ESPN’s platforms, including its direct-to-consumer streaming service, the companies said on Thursday.
DraftKings will operate a betting tab within the ESPN app and promote ESPN’s recently launched streaming service to its customers.
ESPN and DraftKings declined to disclose financial terms of the multi-year partnership, which was first reported by Bloomberg News on Thursday.
The new partnership coincides with ESPN and PENN cutting short their 10-year deal signed in August 2023, under which the sports network got $150 million annually and warrants for the PENN stock in exchange for exclusive right to the ESPN BET brand in the United States.
“Gambling partnerships are used to draw viewers in and get people to spend more time with ESPN products, and that’s harder to quantify, but still important and affects their ad and subscription revenue,” Emarketer analyst Ross Benes said.
Payments from PENN to ESPN will stop in the fourth quarter of 2025. They will work together to transition the existing U.S. online sports betting (OSB) offering to theScore Bet from ESPN BET by December.
PENN said it will remain an ESPN advertising client and the sports network will retain vested warrants that give it the right to buy almost 8 million shares of the PENN stock at about $28.95 per share, while all unvested and performance warrants will be forfeited.
The casino operator would retain the customer information of the nearly 3 million people who signed up for ESPN BET.
Under the new partnership, the ESPN BET brand will be repurposed by ESPN for its betting-related TV shows, online articles, and social media posts, which will then direct users to DraftKings Sportsbook for actual betting.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Sahal Muhammed and Maju Samuel)
