ESPN BET leaves significant investments in technology behind
ESPN BET reduces losses and achieves record revenue in the second quarter of 2025. At the same time, PENN Entertainment aims to become profitable by the end of the year amid fierce competition and growing pressure from investors. The company is counting on the football season to be a turning point for it.
According to PENN CEO Jay Snowden (pictured), the company is approaching a milestone in its digital business and expects its losses to decline gradually throughout the year. He said: “Our interactive division will become profitable in the fourth quarter of 2025, throughout 2026, and beyond. Significant investments in interactive technology are undoubtedly behind us.”
Revenue is growing, and losses have halved
Despite its growth, ESPN BET lags behind its competitors in terms of user numbers and revenue. PENN’s combined digital gaming division generated revenue of $316 million in the second quarter of 2025, compared to $233 million in the same quarter of 2024. For the first half of 2025, PENN generated more than $606 million in revenue from its interactive division, compared to $440 million in the second quarter of 2024.
PENN’s interactive division includes ESPN BET, Hollywood iCasino, and the company’s retail betting shops. It also consists of the online bookmaker theScore Bet and iCasino, which are only available in Ontario.
In the first half of the year, the interactive division’s losses nearly halved, from $299 million to $151 million. Adjusted EBITDAR losses in the second quarter of 2025 are approximately half of the 2024 loss, from $103 million to $62 million.
Since launching its most prominent digital asset in the United States in 2023, PENN has yet to report positive adjusted EBITDAR for a quarter. At the same time, the company has invested billions in its sports betting platform and player acquisition. This flaw was justified by the achievement of long-term profits equal to those of its competitors.
New offerings
According to Snowden, ESPN BET’s retention rates have improved in each of the last two quarters, and the company anticipates that this trend will persist. It has achieved success with its internal risk management and trading platform. At the same time, the operator has expanded its betting capabilities by integrating parlay and in-play betting. These types of bets are increasingly becoming the primary source of revenue for American bookmakers.
Furthermore, the company is preparing to launch a live streaming service for consumers in collaboration with ESPN. The new streaming service will include content related to betting and fantasy football, tailored to the bookmaker’s users. In addition, Disney, ESPN’s parent company, has announced the integration of this platform. Snowden calls this integration a competitive advantage.
The company took all these steps against the backdrop of lagging behind competitors in terms of user numbers and revenue.
ESPN BET still lags behind its competitors
Major competitors FanDuel and DraftKings have also spent billions of their funds on acquiring products and players. These platforms now generate corresponding quarterly revenues and, as a rule, demonstrate profitable quarters in terms of adjusted EBITDA. Their share of the US sports betting market is over 30%.
ESPN BET’s US market share is currently only 3%. It is worth noting that, prior to its 2023 launch, the company predicted a 20% market share, challenging its competitors.
As the 2025 football season begins, the bookmaker still lags behind publicly traded BetMGM, Caesars, and BetRivers in terms of average quarterly profits. Monthly state revenue reports also show that its market share lags behind Fanatics and bet365.
This football season will be decisive
According to the Nasdaq report, ESPN BET’s small market share and ongoing financial losses have drawn criticism from investors. In their 2024 letter, shareholders expressed opposition to the company’s digital initiatives. This year, they noted hostile pressure from an outside investment firm seeking seats on the company’s board of directors.
The third and fourth quarters of the calendar year cover almost the entire NFL and NCAA football season. The most popular season in terms of betting will demonstrate the company’s long-term financial viability. It could be the best or the last for ESPN BET.
Even if revenues increase in the third quarter, PENN’s digital division is about to lose between $65 million and $45 million in adjusted EBITDAR. The group forecasts another record quarterly revenue in the fourth quarter, sufficient to generate a positive profit of $5 million.
Failure to meet these forecasts could result in the termination of the agreement between the companies regarding branding the bookmaker in August 2026. Snowden again acknowledged this possibility before expressing confidence that his company’s digital division has every chance of long-term success.
This termination would not be the first such departure for PENN. In 2023, having achieved a low single-digit market share under the Barstool Sports brand, the group entered into a branding agreement with ESPN. The group has not yet successfully converted the millions of monthly users of the brand’s platforms into bookmaker customers.
This article was first published in Russian on 8 August 2025.
