DraftKings selects a new partner in competitive sports betting

ESPN betting on DraftKings.

In the latest news that highlights the competitive nature of the sports betting market, a unit of The Walt Disney Company (DIS) and PENN Entertainment (PENN) said Thursday morning that they have agreed to end their U.S. online betting agreement early. Shortly thereafter, it named its new partner: DraftKings (DKNG).

“We value the collaboration we have had with PENN and are now pursuing other media and marketing opportunities in this area,” ESPN President Jimmy Pitaro said in a press release. DraftKings shares recently rose nearly 1%, while Penn shares are down more than 6%.

The ESPN-PENN deal, announced in August 2023, is worth $1.5 billion over 10 years. Both companies had the right to terminate the agreement “after the third year if specified market share performance thresholds were not met.” However, ESPN Bet has found competition from companies like DraftKings and FanDuel, a unit of Flutter Entertainment (FLUT).

Starting December 1, PENN will offer US sports betting under the Score Bet brand, while DraftKings will become ESPN’s “exclusive official sportsbook and competition provider,” including operating the betting tab on the ESPN app. ”

This change comes just weeks after an alleged professional basketball gambling scandal emerged. More than 30 people have been arrested in two gambling schemes. Federal prosecutors allege that Rozier and several others used inside information to bet on NBA games.

Earlier this week, NBA lawyers and others met with congressional committee staff in Washington to discuss the scandal, with The Athletic reporting that a Senate committee headed by Sen. Ted Cruz (R-Texas) had asked the NBA to provide a written briefing on the betting issue.