A full football season helped ESPN BET improve many key financial metrics in the fourth quarter of 2024 compared to Q4 2023. It still trails most major competitors – and questions continue about the sportsbooks’ ability to catch them.
PENN Entertainment, which manages the ESPN BET sportsbook, reported its interactive division improved fourth-quarter revenue from $31.5 million to $275 million between 2023 and 2024. For the year, revenue grew from $719 million to $960 million.
The division incorporates ESPN BET, which launched in 17 states in November 2023 as well as Ontario-only theScore Bet and Hollywood-branded iCasino, which launched its standalone platform in Pennsylvania in December 2024.
That massive revenue increase was largely due to a full football season for ESPN BET. PENN ditched hundreds of millions of dollars in investment in Barstool Sports in 2023 for a new $1.5-billion deal with ESPN.
Questions about ESPN BET's profitability
That investment has not paid off so far.
Despite the revenue increases, PENN’s interactive division still saw significant losses for adjusted earnings before interest, taxes, depreciation, and amortization. Fourth-quarter AEBITDA losses improved from a loss of $339 million to a loss of $110 million in Q3 2023 to Q3 2024, partially due to reduced ESPN BET promotional costs. But overall division losses grew for the year from $403 million to nearly $500 million from full-year 2023 to full-year 2024.
ESPN BET, or the digital division in general, has yet to show it can turn a consistent quarterly profit since the sportsbook launch 15 months ago. This comes as market share leaders DraftKings, FanDuel, BetMGM, and Caesars are pivoting toward profitability. Some smaller books by market share such as BetRivers have also posted profitable quarters since ESPN BET’s launch.
These aforementioned sportsbooks all launched years ahead of ESPN BET and each suffered hundreds of millions or even billions in losses before profitability. Still, with FanDuel and DraftKings in particular continuing to suck up market share, questions have grown about ESPN BET’s ability to become profitable in the coming years.
$PENN doesn't separate its ESPN BET customers from its overall "interactive" division, but it's safe to project it has somewhere around 300,000 to 400,000 monthly active users in the US; national market share leaders FanDuel and DraftKings each have between 3 to 4 million
— Ryan Butler (@ButlerBets) February 27, 2025
And this comes as ESPN BET has shown customer declines since a blitz of new sign-ups in conjunction with its rebranding from Barstool to the “World Wide Leader in Sports.”
PENN Interactive’s combined monthly average users across all its platforms peaked at 771,000 shortly after the November 2023 ESPN BET launch but had fallen in each successive quarter until Q4 2024 when football season, Americans’ most wagered-upon sport, reversed the trend.
ESPN BET started 2025 with somewhere around 300,000 to 400,000 monthly users. FanDuel and DraftKings both have around three-to-four million apiece.
The hyped integration of ESPN BET with the ESPN app, which has around 30 million active users, also failed to draw significant user interest. Despite a $5 bonus bet promotion for most customers, less than 3% of ESPN app users (age 21 and up and living in states where ESPN BET is live) linked their ESPN BET account, per figures disclosed Thursday.
“We have more work to do to unlock the full potential and value of our partnership with ESPN,” PENN CEO Jay Snowden said during Thursday’s earnings call announcing the company’s Q4 earnings results.
Efforts to boost ESPN BET
Snowden, who led PENN’s interactive division before he took over as CEO and led both the Barstool purchase and sale, said during Thursday’s call that his company’s work with ESPN-owner Disney would “deliver improved results.”
That includes further integration in the much-anticipated ESPN content standalone streaming service set to launch ahead of the 2025 football season. ESPN BET is also set to initiate greater cross-promotions with ESPN’s more than 10-million fantasy sports users as well as further incorporation into the sports sites’ “Bracket Challenge” offerings during this year’s NCAA Men’s Basketball Tournament.
The company expects to grow market share in its 20 live markets (excluding New York, where it launched in September 2024) from 2.35% to 4.7% by the end of 2025. Ahead of its launch, the company projected as high as 20% market share by the end of 2027.
The company expects to lower losses sequentially through the first three quarters of 2025 with a projection to be profitable in the year’s fourth quarter. A quarter in the black would be ESPN BET’s first since its 2023 launch.
“We believe that significant investments in digital along with our losses are mostly behind us now,” Snowden said.
ESPN BET's future
Despite the resources of America’s most prominent sports media organization and signs of continued growth, PENN and ESPN still face an uphill battle to reach these goals.
Along with a monthly average user count that is behind most market leaders, ESPN BET has not been able to reach the same per-capita monetary thresholds as its competitors. PENN has touted its fully owned in-house technology as an asset that will allow it to compete with its rivals, but it has thus far not been able to translate that into lucrative customer-facing parlay offerings that have sustained much of the industry’s revenue growth in recent years.
PENN is targeting 9% hold in 2025. Both DraftKings and FanDuel have already eclipsed that threshold and are targeting profit margins north of 10% this calendar year.
Single-game parlays involving player prop bets have higher profit margins than traditional moneyline or totals bets. FanDuel last year reported roughly 50% of bets placed involved a parlay. ESPN BET crossed the 30% mark earlier this year.
“Product,” or industry speak for offering and appropriately pricing as many live and pregame bets as possible, has proven to be the biggest driver of customer acquisition, even ahead of promotions, free bets, and customer databases.
PENN and ESPN projected that the millions of daily ESPN consumers would translate to meaningful sports bettors; this may still come true. But it seems increasingly unlikely new bettors will be attracted to the ESPN BET sportsbook without marked improvement (at least in their eyes) from its betting platform.
In 2026, both parties will have a chance to opt out of the deal. If ESPN no longer brands PENN’s sportsbook product, it raises even more questions about the billions invested without a meaningful financial return.
“Both sides will have to do what's in their best interests and so that's always out there,” Snowden said. “We have conviction in terms of showing the improvements throughout the year.”
