PENN Entertainment underwent a round of layoffs this week that also impacted positions at ESPN BET. Reports of downsizing at the Wyomissing-based company surfaced right before the release of its Q2 earnings.
According to PlayPennsylvania‘s sister site Legal Sports Report, some now former PENN employees took to LinkedIn to notify their professional networks that they were part of the layoffs.
Among the sea of public posts was that of an affiliate marketing manager at ESPN BET.
The news coincides with swelling rumors of a potential sale of PENN’s assets amidst poor results. Initially, the entertainment and iGaming firm brushed off the idea.
However, recent reports suggested industry powerhouses Boyd Gaming and Flutter Entertainment have opened a possible pathway to a sale.
PENN CEO reassures employees following layoffs
As not uncommon in any industry, PENN CEO Jay Snowden notified employees of the company’s recent changes.
In a letter obtained by LSR, Snowden noted that there were a “limited number” of layoffs within the online sports betting and casino sector.
Snowden reiterated that both ESPN Bet and PENN are “well-positioned” despite the layoffs.
“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.”
PENN stock, generally, falling despite initial bump from disgruntled investors’ letter
At the end of May, dissatisfied investors took aim at PENN’s leadership group, including Snowden.
The open letter from top shareholder Donerail Group urged PENN to sell as investors believe that is what’s necessary for the company to realize its full value.
Following the release of the letter, PENN’s stock climbed nearly 20% in a single day. Prior to the jump, the company’s share price was bottoming out around 2020 pandemic levels.
However, of late, the stock has been trending down. Over the past five days, the stock is down 4.85%. Beginning trading on Monday, PENN stock was trading at $20.92. At the end of the trading day on Wednesday, as word began to trickle out about the layoffs, the stock was trading at $19.44.
As for potential suitors, should Donerail get its wish, Boyd Gaming and Flutter appear to be the most logical acquisition candidates.
In this scenario, Flutter, which also operates FanDuel Sportsbook PA, would be able to keep ESPN BET in the state. This was confirmed by Pennsylvania Gaming Control Board Director of Communications, Doug Harbach, in a statement to PlayPennsylvania last week.
However, PENN has yet to substantiate any of these developments and remains steadfast in its commitment to growing ESPN Bet’s market share nationwide.
ESPN BET’s share of PA sports betting market down each month in 2024
The transition from Barstool to ESPN hasn’t exactly gone swimmingly for PENN thus far.
Through five months on record in 2024, ESPN BET’s share of the PA online sports betting market has decreased with each turn of the calendar:
- January: 8.9%
- February: 7.9%
- March: 6.8%
- April: 6.4%
- May: 5.5%
The drop continued despite ESPN BET being the No. 3 sportsbook in the Keystone State this year by handle.
