Another round of layoffs at Penn Interactive is shaking up the team behind ESPN Bet just two months after the first round.
A Penn spokesperson did not comment on the specifics of how many people were involved in this round. The first round, which also included an unspecified amount of workers from the iGaming and sports betting division, came in mid-July.
“These changes, affecting a limited number of positions at PENN Interactive, are part of the deferred organizational initiatives that followed our acquisition of theScore, which we have previously spoken about,” the spokesperson told LSR concerning this week’s layoffs.
Penn’s stock was down more than 1% shortly after the market opened Friday.
Was another round of layoffs expected?
An internal letter from CEO Jay Snowden addressed the need to reduce Penn’s workforce.
“This week, we are implementing changes at PENN Interactive to help streamline reporting lines, enhance operational efficiencies, and leverage shared resources across PENN,” Snowden said in the July letter.
“Unfortunately, these changes will result in a limited number of team member separations.”
ESPN Bet facing headwinds
This round of layoffs is the latest issue muddying the outlook for ESPN Bet in the first month of NFL betting.
Penn missed its target of having the ESPN Bet app live in New York by the beginning of college football on Aug. 24. Its final approval is on the agenda for Monday’s New York State Gaming Commission meeting, nearly a month after the company hoped to be live.
Penn bought its NY sports betting license from Wynn in February for $25 million. Penn CEO Jay Snowden said he did not think “a single operator will make money” in November 2021 after media reports said Penn’s bid for a license was not approved with Barstool Sportsbook.
The two rounds of layoffs and missing its target for a New York launch came after an investor expressed its frustrations in May around the company’s interactive spend with few results to show.
Layoffs come as work continues
Interactive layoffs would not be ideal for any sports betting company during the busiest time of the sports calendar. Those impacts are amplified by the fact that Penn and Disney are still working on integrations between ESPN Bet and the ESPN media app.
Penn hired Aaron LaBerge from Disney to serve as its chief technology officer to oversee interactive. Snowden noted a month before LaBerge’s hiring that the person replacing Benjie Levy had been picked and had already weighed in on the ESPN Bet product roadmap.
LaBerge tweeted that online sports betting is still in the “early innings” and that ESPN Bet was “just getting started” on the day after 2024 NFL betting began.
