Walt Disney Co. has entered into a new multiyear partnership with DraftKings Inc., designating DraftKings as the official betting site and odds provider for its ESPN sports networks. This agreement marks a significant shift away from the previous collaboration Disney had with Penn Entertainment Inc., which is set to conclude by the end of November.
Beginning December 1, users will gain access to DraftKings’ sportsbook, daily fantasy contests, and various other betting products directly through ESPN platforms, as announced in a joint statement from the companies. DraftKings plans to incorporate a dedicated betting tab into the ESPN app and will actively promote ESPN’s recently launched online services to its existing customers. While the financial details of the agreement remain undisclosed, the shift aligns with Disney’s strategy to leverage its ESPN brand in the booming sports betting market.
The partnership with Penn Entertainment, which involved a decade-long agreement valued at $2 billion, ended after the companies struggled to gain a substantial share of the market. While Penn’s shares increased by 9.2% in early trading following the news, Disney’s stock showed little change. The Wyomissing, Pennsylvania-based company recently divested its Barstool Sports business and entered into the ESPN partnership amid regulatory challenges tied to the controversial figure of Barstool’s founder, Dave Portnoy.
The competitive landscape of the $13.7 billion sports betting market is currently led by DraftKings and FanDuel, a division of Flutter Entertainment. The ESPN Bet brand, which will still be associated with ESPN programming, has faced challenges in establishing itself within this landscape, trailing behind more established brands and holding less than a 3% market share, according to independent analyst Alfonso Straffon.
As part of its rebranding efforts, Penn Entertainment is set to launch its sports betting services under theScore Bet brand, also starting on December 1. This change signals a new chapter for both companies as they navigate the evolving dynamics of the sports betting industry.