ESPN has officially ended its partnership with Penn Entertainment (NASDAQ: PENN) and named DraftKings Inc (NASDAQ: DKNG) as its new exclusive sportsbook partner.
The announcement arrives just two years after ESPN Bet launched under a 10-year licensing deal with PENN.
That agreement has now been scrapped – with Penn set to rebrand the sportsbook as “theScore Bet”.
DraftKings stock inched higher on the news today, reflecting investors’ belief it’s better suited to ESPN than Penn Entertainment ever was.
Here are three clear arguments that support the said case.
DraftKings and ESPN have overlapping audiences
Both ESPN and DraftKings share a deeply embedded presence in the daily lives of sports fans.
The Boston-headquartered company has cultivated a loyal user base through years of daily fantasy sports and aggressive sportsbook expansion, while ESPN remains the most recognized name in sports media.
Their audiences overlap significantly – digitally native, sports-obsessed, and already accustomed to real-time engagement.
This creates natural synergy for integrated betting experiences across ESPN platforms. In contrast, Penn lacked that brand familiarity and cultural resonance with ESPN’s core demographic.
Simply put, DKNG’s brand equity and user trust give ESPN a more seamless, intuitive partner to embed betting into its content ecosystem.
DKNG offers product maturity and bigger market share
DKNG enters this partnership as a proven leader in the US online sports betting market, consistently ranking among the top two operators alongside FanDuel.
Its platform is robust, data-rich, and already optimized for scale and maturity, which will enable ESPN to plug into a battle-tested infrastructure with minimal friction.
Penn Entertainment, by contrast, was really building ESPN Bet from the ground up, and struggled to gain meaningful market share despite ESPN’s promotional muscle.
DraftKings Inc brings not just a sportsbook, but a full-stack betting and fantasy ecosystem that can immediately elevate ESPN’s monetization strategy.
It’s a plug-and-play solution with a track record of performance.
DraftKings brings monetisation and strategic clarity
One of the biggest criticisms of ESPN-Penn deal was its complexity and lack of clear monetization pathways.
While PENN did pay for the ESPN brand, it bore the operational burden of building and scaling a new sportsbook.
DraftKings flips that model: ESPN now benefits from a revenue-sharing agreement without the risk of running a betting business.
This aligns better with Disney’s broader strategy of monetizing ESPN’s reach without having to compromise on its brand integrity.
Meanwhile, DKNG gains premium distribution and visibility across ESPN’s digital and broadcast properties.
The incentives are cleaner, execution more streamlined, and upside more immediate for both parties here.
If executed well, this transaction could help DraftKings stock regain some of the ground it has lost this year amid rising competition from prediction markets.
Wall Street firms currently rate DKNG shares at “overweight” with upside to $50 on average.
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