NEW YORK — Before Penn Entertainment’s deals to launch ESPN Bet and the now-defunct Barstool Sportsbook, the casino giant’s first foray into legal U.S. sports betting came in 2019 with theScore Bet. TheScore was the first media company to launch a mobile sportsbook in the U.S., partnering with Penn for market access across 11 states. Penn later acquired the Ontario-headquartered Score Media and Gaming Inc. for $2 billion in October 2021 from founder John Levy, of whom his family was the majority shareholder of theScore. At last week’s NEXT Summit gaming industry conference in New York City, Levy made his first public comments since his family stepped down from their roles at Penn in early 2024.
“I just think you had to give more trust to the people who brought you to the party, which was us. There was a bit of—we bought it and we’ll take it from here, thank you very much,” Levy said of Penn’s relationship with theScore. “When you’re as involved in the business as we always were and you can see where it was going, and when things you might have been doing were happening differently—it was very hard, very frustrating.” theScore Bet remains operational in Ontario, while the Canadian company’s technology helped Penn launch Barstool Sportsbook in September 2020 and ESPN Bet in November 2023. In his recent on-stage interview at NEXT with gambling investor Benjie Cherniak, Levy described the relationship dynamic between theScore, Penn, and Barstool to be “tumultuous.”
“They had to settle this whole Barstool relationship which was a fiasco right from the get go,” Levy said. “Dave Portnoy’s not a stupid guy. He’s very smart. But it’s all about Dave, and unless you manage him properly, unless you control that properly, you’re not going to get the synergies you need. He’d go to a university, have his pregame parties, get a shitload of signups, and then there’d be no follow-up.” After buying Barstool Sports for $551 million, Penn sold the company back to Portnoy for $1 in 2023 as it separately agreed to pay ESPN $1.5 billion over 10 years to launch ESPN Bet. In a recent earnings call, Penn Entertainment CEO Jay Snowden said ESPN Bet is “not on pace” to hit its goals and “both sides will have to do what’s in their best interests” in reference to Penn and ESPN considering exercising an opt-out clause from their deal in 2026.
In a market dominated by FanDuel and DraftKings, ESPN Bet has struggled to gain significant market share, currently holding about 2-3% of the U.S. sports betting market by total money wagered, a far cry from the 20% market share that Penn projected ESPN Bet to achieve by 2027. “You just have to look at what’s happening,” Levy commented on ESPN Bet. “It’s kind of like Barstool—Barstool in conception was right but then in execution fell off. There wasn’t a unified approach and they weren’t managed properly in my view.” ESPN Bet is also entangled in a proxy battle from Penn activist investor HG Vora Capital, who stated that Penn’s “interactive strategy has been an abject failure due to a pattern of overpaying, overpromising, and not delivering,” as noted in a January 29 SEC filing, and highlighted that Penn’s board has overseen “poorly negotiated M&A transactions and media partnerships that have resulted in large ongoing operating losses.”
“If you’re living quarter to quarter and not dedicating the time, resources and management to fix issues, you lose credibility. And it’s a shame because I think there’s huge value in Penn,” Levy said. “Remember where they came from. They were a casino company, and they were a good casino company. But it’s a leap to think that just because you have [casinos], you’re going to get into the sports betting business and make it work.” On the bright side, PENN is bullish on product developments at ESPN Bet, including its debut of in-app live game streaming this month. Parlays, which are a critical revenue generator for sportsbooks, surpassed 30% of total handle on ESPN Bet in December and January and have grown each month since October, according to Penn’s Q4 earnings report. In that call, Penn Entertainment CTO Aaron LaBerge also touted upcoming integrations between ESPN Bet and the “Flagship” Direct-to-Consumer streaming service that ESPN plans to launch later this year.
“I’m not going to speak on ESPN’s plans for the D2C service, but I can certainly share that we are deeply integrated with that product and are incredibly excited about it and can’t wait for the world to see what those integrations look like,” LaBerge said. “We talked about March Madness only because it’s the most eminent, but we have massive plans on the same scale for Fantasy Football, which will likely coincide with the timing of Flagship as well. So, there’s a lot going on towards the end of the summer that we’re excited about.” ESPN’s Mike Greenberg, who hosts shows such as Get Up and Sunday NFL Countdown, also spoke at the NEXT Summit in New York, noting that fans often yell “Boost me, baby” at him in reference to his commercials promoting ESPN Bet.
“It has made people better educated sports fans, it has made them more interested in sports and more interested in shows like mine where they’ll get information they deem valuable to maximize their ability to win money when they gamble,” Greenberg said of legalized sports betting. “So I think it’s been an enormous win for ESPN and an enormous win for the leagues themselves.”
