Less than a year after unveiling its self-branded sports-betting initiative, Disney has decided to shift course—not by retreating from the world of sports wagering altogether, but by redefining the nature of its participation within it. Rather than abandoning the lucrative and fast-evolving betting ecosystem, the entertainment conglomerate is reorganizing its strategy by severing ties with Penn Entertainment, the regional gambling operator that helped it introduce the ESPN Bet platform, and instead forging a new and more ambitious alliance with DraftKings, one of the two major powers that dominate the American sports-betting market.
Functionally, this strategic realignment means that beginning next month, ESPN viewers who wish to place wagers on their favorite sports will be redirected to DraftKings’ established platform, rather than to the ESPN-branded application previously managed by Penn. Although the ESPN Bet app will cease to operate as a stand-alone betting venue, Disney maintains that the brand itself will persist, though in a transformed state—as a multifaceted “content brand” encompassing televised programming, digital media initiatives, and robust social media engagement. In essence, ESPN Bet will live on as a hub for betting-related editorial content, analytics, and discussion rather than direct gambling activity.
At first glance, observers might be tempted to interpret this transition as a reactionary measure, one ostensibly prompted by a recent wave of criticism and public concern about the escalating role of gambling in professional sports. That backlash reached a crescendo following the latest scandal that swept across the NBA, implicating certain players and coaching staff in controversies surrounding gambling behavior. Yet, the underlying truth appears far less dramatic and far more pragmatic. The reality is that ESPN’s initial experiment—its bold attempt to carve out a meaningful foothold in the hypercompetitive sports-betting landscape—simply failed to resonate with bettors already deeply entrenched in existing platforms.
For months, the faltering synergy between Penn and ESPN had been apparent to anyone watching closely. Industry insiders and analysts alike had long speculated about the partnership’s viability, particularly given the imbalance between Penn’s regional expertise and ESPN’s global brand power. When I questioned ESPN’s president, Jimmy Pitaro, in August about whether the company remained committed to the collaboration, his response was measured but cautious. At that time, Pitaro acknowledged that both parties retained the option to dissolve their agreement the following summer, though he expressed optimism that upcoming product launches—particularly ESPN’s new streaming and mobile experiences—might reinvigorate user engagement. He suggested that the company would reevaluate performance metrics after football season, remarking, “Let’s see if we can improve market share with this launch.” But as it turns out, the market itself gave them their answer far sooner than expected.
Penn Entertainment, for its part, has now endured two unsuccessful attempts to expand its market share by joining forces with high-profile media entities. Its first major gamble came with the acquisition of Barstool Sports in 2020—a deal rooted in the belief that an energetic, culturally resonant brand could channel its fanbase directly into sports betting. When that venture failed to meet expectations, Penn turned to ESPN, banking once again on the idea that the power of a recognizable media brand would organically draw bettors into its orbit. Yet, for the second time, the company discovered that even brand awareness and relentless marketing could not dislodge consumer loyalty already cemented to dominant platforms.
Meanwhile, Disney’s cautious evolution on this front reveals an internal tension that has persisted for years. Historically, the company had maintained a strict distance from gambling enterprises, wary of associating the family-friendly Disney name with activities perceived as morally or socially contentious. That cautious stance dates back to at least 2015, when ESPN—then operating under even stricter corporate directives—walked away from an earlier partnership opportunity with DraftKings. Today, however, Disney acknowledges a changing cultural and commercial reality. According to Pitaro, the expectation among modern sports fans has transformed. Viewers no longer see betting as a fringe component of sports culture but as an integrated dimension of fandom itself—a way of interacting with games through prediction, probability, and data-driven immersion.
“It would be very hard for ESPN today,” Pitaro told me, “to serve the sports fan without providing substantial, meaningful betting content and a frictionless—or at least relatively seamless—betting experience.” His statement reveals a delicate balancing act between ESPN’s editorial mission and its commercial ambitions: to remain relevant to its audience, the network must embrace the entertainment value of wagering while managing the inherent reputational risks.
Nevertheless, even a network as globally recognized as ESPN has discovered the limits of its influence. The firm could not persuade devoted bettors to abandon the market leaders—FanDuel and DraftKings—whose competitive advantages were established long before legal betting expanded nationwide. These two titans, both of which built enormous user bases through daily fantasy sports platforms, now collectively command roughly two-thirds of the U.S. sports-betting industry. Their technological edge, brand loyalty, and sophisticated user interfaces have fortified their dominance to the point that not even ESPN’s prestige could unsettle their grip on the market.
Still, the story of ESPN’s recalibration does not necessarily end with capitulation. The sports-betting landscape continues to mutate rapidly, and new varieties of wagering are emerging outside the traditional framework of sportsbook operations. Prediction markets such as Kalshi and Polymarket exemplify this evolution: these platforms allow users to stake monetary outcomes on a vast range of real-world events, from economic indicators like inflation rates to the cultural curiosities of celebrity sightings, including those of Taylor Swift. Operating under comparatively lenient regulatory structures, these innovative platforms are becoming inadvertent competitors to conventional betting operators—even in jurisdictions where formal sports betting remains restricted.
This expanding ecosystem helps explain recent industry maneuvers. DraftKings, recognizing the importance of defending its territory against these novel entrants, recently moved to acquire the prediction-market startup Railbird. Its fresh partnership with ESPN, therefore, may reflect less a desire to enter new markets than a strategic attempt to strengthen its defenses within existing ones—to consolidate its dominance, optimize user acquisition through trusted media exposure, and preempt potential disruption from unconventional betting models.
In sum, Disney’s decision is not so much an act of retreat as it is one of repositioning. The company remains invested in the future of sports entertainment, but it has accepted that meaningful participation in sports betting no longer means competing head-to-head as an operator. Instead, through thoughtful alliances and a focus on content-driven engagement, Disney and ESPN aim to inhabit a space that connects fans to the betting world without shouldering its heaviest operational burdens. In this redefined strategy lies the true lesson of the 2025 gamble: even giants must occasionally concede that partnership—not domination—is the more sustainable wager.
Sourse: https://www.businessinsider.com/espn-draftkings-penn-sports-betting-prediction-market-kalshi-disney-2025-11
