ESPN Bet Struggles to Meet Initial Market Share Goals as Penn Expands iCasino

Penn Entertainment has announced revenue of $1.67 billion for the fourth quarter of 2024, an increase from $1.395 billion in the same quarter of 2024.

The company has placed significant emphasis on ESPN Bet, its sports betting platform launched in November 2023. Upon launch, the company aspired to secure 20 percent market share in the United States by 2027. This has now been revised to five percent by the end of 2025.

Penn’s Digital Push: ESPN Bet, Live Streaming, and Future Growth

Penn has continuously reiterated its desire for a digital-forward strategy, with 230,000 users linking their ESPN Bet and ESPN streaming accounts. Crypto betting was not mentioned in the Q4 earnings call, unlike at competitor DraftKings, which admitted that accepting digital currencies was “something to consider.”

Live streaming has launched in Pennsylvania and Colorado, with a planned rollout to all jurisdictions. “Live betting is certainly important, so having a partner that produces so many live events and being able to integrate with those is powerful,” commented Aaron LaBerge, CTO on the new live-streaming feature.

Despite revenue growth, the interactive segment still recorded a $109.8 million loss for the fourth quarter. This includes ESPN Bet and the operator’s online casino segment. The company forecasts that the path to profitability in the interactive segment could be complete by the end of the year.

Felicia Hendrix, CFO for Penn commented: “We expect each quarter of the year to generate lower losses sequentially, culminating in positive EBITDA in the fourth quarter.”

Company growth was a sentiment shared by CEO Jay Snowden, who doubled-down on the company’s long-term strategy. “We are positioned extremely well this year to start delivering on a multi-year growth phase,” he told investors.

Regarding sports betting mix and ESPN Bet, results revealed that 70 percent of users placed a same-game parlay on the platform between December 2023 and January 2024.

Parlays comprised 30 percent of total betting handle in December and January. Promotional expense as a percentage of total handle is expected to be in the mid-to-high 2 percent range for 2025. The company has outlined that it aims for a 9 percent online sportsbook hold in 2025.

Recently, ESPN Bet launched in Washington D.C., and Missouri plans to launch once it becomes legal. The launch of legal online betting in the state has been delayed, but is expected

“We’ve got a cost structure that right now is built for us to be a scale player, because that’s what we and ESPN expect to be,” explained Snowden.

New Jersey Approval Could Further Strengthen Penn iCasino Growth

One segment that grew was Penn’s online casino. The company is targeting a market share of 3.5 percent by the fourth quarter of 2025. Revenue grew by over 60 percent year-over-year, with the Hollywood Casino App gaining 50bps market share in Pennsylvania two months after launch and 25bps market share in Michigan within the first month.

“The success in our iCasino business is bolstered by the continued strong momentum from the recent launches of our standalone Hollywood Casino app in Pennsylvania and Michigan,” commented Snowden when discussing strong iGaming performance.

The app is also pending approval in New Jersey, which will further bolster figures.

Despite the positive spin, Penn’s Q4 missed Wall Street’s expectations with a lower EPS than anticipated, leading to a 2 percent stock price drop in pre-market trading.