PENN Lays Off Several ESPN Bet Employees, Claim They Are Still 'Well-Positioned'
ESPN Bet's losing streak continues. Reportedly, ESPN Bet's market share fell from 4.7% in the first quarter to 3.2% in the second. This is far behind the market leaders in U.S. sports betting, FanDuel (36.5%) and DraftKings (38%). Its operator, PENN Entertainment, executed a round of layoffs, including ESPN Bet employees, after the second quarter earnings report.
PENN CEO Jay Snowden took a "glass half full" approach when announcing to his staff that the company was "implementing changes" July 17. In an internal letter, Snowden told employees that PENN is "well-positioned" despite the layoffs, which I'm sure is comforting to the people who lost their jobs. Psyche.
As someone who has been on the wrong side of one of these conversations, I can confidently say the employee getting laid off doesn't give a f*ck that PENN is "well-positioned". If anything, the people no longer working for ESPN Bet are probably rooting for its demise. I know I'd be.
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Furthermore, this was just a cold-hearted move. Granted, corporations don't have souls and only exist to make their shareholders money. However, these layoffs come on the heels of ESPN Bet receiving positive news. PENN's stock price increased May 31 when the Donerail Group, a PENN investor, wrote an open letter to the chairman urging the company to sell.
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The company's stock grew again once Boyd Gaming expressed interest in buying PENN following Donerail's letter. It climbed once more in mid-June after the Supreme Court declined to hear a case challenging the Seminole Tribe's exclusive rights to sports betting in Florida.
ESPN Bet struggling blows my mind. I understand FanDuel and DraftKings have been in the sports betting space longer. But, since ESPN has rights to live sports, it would make sense for ESPN Bet to gain market share rather than lose it. Essentially, ESPN can redirect people watching the games on its channel to betting on its sportsbook.
Perhaps this is more of a PENN problem. Barstool Sportsbook, whose audience is the opposite of ESPN's, flopped under PENN's control. OutKick founder Clay Travis has been predicting ESPN Bet would fail for months. Clay knows something because I figured the "Worldwide Leader in Sports" would be better than last after nearly a year in the sports betting space.
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