Penn Leisure (NASDAQ: PENN) is planning layoffs at its Penn Interactive arm, which incorporates the ESPN Wager on-line sports activities wagering unit.
A picture from an ESPN Wager tutorial. Operator Penn Leisure is shedding employees at its Penn Interactive unit. (Picture: YouTube)
The variety of jobs to be eradicated wasn’t introduced, and the information was initially reported Wednesday by Authorized Sports activities Report. Information of the headcount reductions at Penn Interactive arrived about 9 months after the ESPN Wager cellular software went reside.
This week, we’re implementing adjustments at PENN Interactive to assist streamline reporting strains, improve operational efficiencies, and leverage shared assets throughout PENN,” wrote Penn CEO Jay Snowden in an e-mail to staffers. “Sadly, these adjustments will end in a restricted variety of crew member separations. Whereas it’s tough to see colleagues impacted, we deeply recognize their contributions and are dedicated to supporting them via the transition.”
Snowden’s message didn’t point out layoffs particular to ESPN Wager, however the chief govt officer famous the gaming firm will proceed constructing “upon the momentum of our partnership with ESPN with upcoming product enhancements and a deeper integration into the ESPN ecosystem.”
ESPN Wager Falling Flat
Information of the Penn Interactive layoffs arrived as knowledge verify ESPN Wager is struggling mightily to achieve stable on-line sports activities betting market share.
The app acquired off to an honest begin, sparking hope it will be extra profitable than its predecessor, Barstool Sportsbook, however knowledge point out in any other case. In a brand new report, JMP Securities famous that as measured by deal with, ESPN Wager’s second-quarter on-line sports activities wagering market share slid to three.2% from 4.7% within the first three months of the yr.
At 3.2%, ESPN Wager has lower than half the share commanded by BetMGM, itself a laggard, and fewer than 10% of the share managed by DraftKings and FanDuel — the 2 largest operators within the area.
ESPN Wager’s struggles present extra fodder for buyers who’ve been crucial of Penn’s on-line betting missteps and will name into query the reasoning behind the gaming firm agreeing to pay Walt Disney (NYSE: DIS) $1.5 billion over 10 years to make use of the ESPN model. That accord could be scrapped after a couple of years if sure monetary metrics aren’t met.
“Whereas we acknowledge that change is rarely simple, these evolutions will allow us to raised capitalize upon our new section of progress. Our Interactive enterprise, which is a core pillar of PENN Leisure, is well-positioned, and we proceed so as to add capabilities and key expertise to advance our digital progress technique,” added Snowden within the e-mail to staffers.
ESPN Wager Struggles Might Weigh on Acquisition Prospects
Quickly after Penn investor Donerail Group authored a letter to the gaming firm’s board of administrators advocating for a sale, rumors surfaced that Boyd Gaming (NYSE: BYD) might make a run at its rival. Nonetheless, there are doubts surrounding that thesis, a lot of which stem from the idea that Boyd wouldn’t wish to pay as a lot as $500 million for Penn Interactive.
That suggests a 3rd get together would wish to become involved. Final week, the gaming trade rumor mill prompt that FanDuel mum or dad Flutter Leisure (NYSE: FLUT), which has a relationship with Boyd as a result of the on line casino operator owns 5% of FanDuel, might become involved.
Flutter hasn’t confirmed an curiosity in Penn Interactive/ESPN Wager and the hypothesis is arguably a stretch as a result of FanDuel doesn’t must pay that a lot for simply 3.2% in sports activities betting market share.
