Penn Entertainment is cutting its workforce, including positions related to ESPN Bet.
This week, employees took to LinkedIn to share that they were affected by a round of layoffs at Penn. Among those posting was an affiliate marketing manager for ESPN Bet.
According to an internal letter from CEO Jay Snowden, obtained by LSR on Wednesday, there were a “limited number” of layoffs in the sports betting and online casino segment.
Layoffs Aside, ESPN Bet and Penn Are ‘Well Positioned
Snowden maintained a positive tone in his message to Penn employees:
"This week, we are implementing changes at PENN Interactive to help streamline reporting lines, enhance operational efficiencies, and leverage shared resources across PENN. Unfortunately, these changes will result in a limited number of team member separations. While it is difficult to see colleagues impacted, we deeply appreciate their contributions and are committed to supporting them through the transition.
"As you know, when PENN acquired theScore, we hit the ground running with the build-out of our proprietary tech stack and the migration of our sportsbook to theScore's best-in-class platform. This led us to temporarily set aside any potential organizational changes that would typically follow a major acquisition.
"While we recognize that change is never easy, these evolutions will enable us to better capitalize upon our new phase of growth. Our Interactive business, which is a core pillar of PENN Entertainment, is well-positioned, and we continue to add capabilities and key talent to advance our digital growth strategy. This includes building upon the momentum of our partnership with ESPN with upcoming product enhancements and a deeper integration into the ESPN ecosystem."
Despite Challenges, PENN Still Up from Recent Rallies
Penn’s stock has seen a decline since the beginning of the week, but it remains higher compared to May 31. The initial boost came after an open letter from the Donerail Group, which expressed frustration with Penn’s digital losses and called for a sale to unlock the company’s full value. This led to a nearly 20% surge in PENN’s stock, lifting it from a low not seen since the 2020 pandemic.
Following this, two more events further impacted Penn’s stock: Boyd Gaming appointed a new director, indicating potential interest in acquiring Penn, and the Supreme Court declined to hear the Florida sports betting case.
Low Performance Metrics for ESPN Bet
The anticipated business turnaround following Penn’s switch from Barstool to ESPN Bet last year has yet to materialize.
According to Citizens JPM, ESPN Bet ranked sixth in handle share for the second quarter at 3.2%, a decline from 4.7% in the first quarter. Despite this, gross revenue, which also ranked sixth, increased in the second quarter to 2.7% from 2.4%.
Citizens JPM also compared figures from June 2024 to June 2023, when Barstool was still active. Handle share dropped to 1.9% from 2.6%, while revenue rose to 2.0% from 1.8%.
These second-quarter numbers may still change, as several key states, including Arizona, Illinois, and Ohio, have yet to report their June figures.