The sports betting landscape just shifted again, and ESPN didn’t waste a minute making its next move.

Moments after officially ending its high-profile, 10-year, $2 billion partnership with Penn Entertainment, ESPN announced a brand-new, multi-year deal. And this time, with DraftKings, the $13.86 billion sports betting giant that previously worked with the network before Penn entered the picture. The timing raised eyebrows, but the strategy was clear. ESPN is doubling down on gambling, only this time with a proven powerhouse.

With this new agreement, DraftKings will serve as ESPN’s exclusive sportsbook and odds provider. It will seamlessly integrate into ESPN’s platform, introducing a new betting tab within the ESPN app and featuring prominently on on-air betting shows. This also includes ESPN Bet Live. A full rollout is set to kick off in 2026, with some limited features starting as early as December 1, 2025.

“We are excited about this new collaboration with DraftKings,” ESPN chairman Jimmy Pitaro said. “Working with DraftKings, a leader in the space, will allow us to build upon that foundation, continue to super-serve passionate sports fans, and grow our ESPN direct-to-consumer business.”

DraftKings CEO Jason Robins called the partnership a “natural fit,” emphasizing that ESPN’s massive visibility across sports gives the company unmatched access to fans. “Together, we’re delivering a seamless, engaging, and responsible experience that elevates how fans connect with live sports,” Robins said.

In a nutshell, while ESPN may have parted ways with one partner, it has certainly reloaded with one of the biggest players in the game.

Reasons for the ESPN-Penn Entertainment partnership’s failure

The partnership between ESPN and Penn Entertainment had a rocky start and never really took off. Although it was touted as a 10-year deal, it fizzled out after just two years because Penn’s ESPN Bet app couldn’t manage to grab more than a tiny slice of the market in most major states.

Due to weak performance and limited growth compared to industry leaders DraftKings and FanDuel, both companies mutually agreed to terminate the agreement that began in August 2023. Penn will now rebrand its U.S. sportsbook under the “theScore Bet” name and end all remaining payments to ESPN by the end of the year.

Also, Penn’s strategy to leverage the ESPN brand for a competitive edge never materialized. The company’s digital division, which included ESPN Bet, reported ongoing losses, forcing executives to reconsider their U.S. expansion. Ending the partnership frees Penn from its annual $150 million payment obligation to ESPN, allowing it to redirect resources toward its stronger Canadian-based platform, theScore Bet, now set for a U.S. relaunch.

For ESPN, the split offers a timely exit from a complicated situation. The network had faced increasing scrutiny over potential conflicts of interest, especially following the NBA gambling scandal in October 2025.

By ending ties with Penn, ESPN distances itself from direct sportsbook branding and shifts to a cleaner, more flexible model through a new partnership with DraftKings.