Penn Entertainment Lays Off Employees Across Its ESPN Bet And Online Casino Brands

Penn Entertainment laid off approximately 100 employees across its sports betting and online casino brands. These layoffs come ahead of the company’s Q2 Earnings report. Staff from ESPN Bet were among those affected. ESPN Bet has not seen the projected success that Penn had hoped for when swapping the ESPN brand for Barstool in 2023. It has been difficult for ESPN Bet to gain sports betting market share in the competitive industry.

Penn Entertainment Plans Following Layoffs

Penn stated to employees that the company will be entering a new growth phase with its interactive business. ESPN Bet was a highlight of this growth phase. Penn secured a $2 billion licensing deal with Walt Disney to use the ESPN brand for the online sports betting market. Prior to the ESPN deal, Penn was offering odds through the Barstool Sportsbook app.

“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.”

Jay Snowden, CEO of Penn Entertainment, in a memo to employees, which was obtained by LSR.

The company states that the interactive business is well-positioned and that it will continue to build upon the momentum of the ESPN partnership. Following reports of the layoffs, Penn shares saw a slight 1.56% drop.

Disappointing Year For Penn

Penn Entertainment’s shares have decreased 25% year-to-date. The company’s last two quarters have seen missed earnings expectations. ESPN Bet has underperformed initial projections. The company is aiming for ESPN Bet to hold a 20% market share by 2027, but the mobile app is not currently on track to do so.

Back in May, the Donerail Group sent a letter to Penn CEO Jay Snowden. In the letter, the activist investor called on the board to sell the company. The Donerail Group cited the company’s track record of failed deals, which include the Barstool Sports $1 sale.

Boyd Gaming approached Penn Entertainment in June with an interest in acquiring the company. Penn Entertainment had not agreed to any deal with Boyd Gaming. The layoffs are just another story showcasing how rough the year has been so far at Penn. As the NFL season approaches, Penn Entertainment will aim to turn 2024 around.