Penn Entertainment is reducing its headcount, including positions affecting ESPN Bet.
Employees began posting to LinkedIn this week saying they were part of a round of layoffs at Penn. One of those public posts included an affiliate marketing manager for ESPN Bet.
An internal letter from CEO Jay Snowden obtained Wednesday by LSR says there were a “limited number” of layoffs in the sports betting and online casino segment.
ESPN Bet, Penn ‘well positioned’ despite layoffs
Snowden kept the tone of his message to Penn employees positive:
“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 still up from recent rallies
Penn’s stock is down from the beginning of the week but is still up since May 31, when an investor letter stating frustration with Penn’s digital losses sparked a rally.
The open letter from Donerail Group sent to Penn’s chairman and board called for a Penn sale to realize the full value of the company. That led PENN to jump nearly 20% in one day, raising the stock from a low point not seen since the 2020 pandemic.
Penn’s stock also had two more catalysts since that letter: Boyd appointing a director that suggested the company could have interest in buying Penn and the Supreme Court deciding not to hear the Florida sports betting case.
ESPN Bet seeing low metrics
The business turnaround expected when Penn swapped out Barstool for ESPN Bet last year has not yet happened.
According to Citizens JPM, ESPN Bet ranked sixth in terms of second quarter handle share at 3.2%, which was down from 4.7% in the first quarter. Gross revenue was also ranked sixth though it grew in the second quarter to 2.7% from 2.4%.
Citizens JPM also compared June 2024 figures to June 2023 when Barstool was still live. Handle share is down to 1.9% from 2.6% while revenue is up to 2.0% from 1.8%.
Those second quarter numbers can still fluctuate as there are several key states, including Arizona, Illinois and Ohio, that have not yet reported June figures.
