PENN Entertainment Outlines Layoffs in Penn Interactive

Much criticism has been heard about PENN Entertainment CEO Jay Snowden’s managerial style.

From vituperations against his cushy pay package to fulminations over the incredulous sale of the Barstool Brand for $1 back to its controversial owner, David Portnoy, after forking out millions to acquire it, now PENN is preparing to lay off staff in its iGaming arm, Penn Interactive.

PENN Interactive, Including ESPN Bet, to Lose Staffers

This too isn’t helping Mr. Snowden’s reputation as a savant and skilled leader. If anything, it has caught employees by surprise.

In an email seen by Legal Sports Report, Mr. Snowden has informed members of the team at Penn Interactive, which includes the company’s latest showpiece, ESPN Bet, that layoffs are imminent. The email read:

This week, we are implementing changes at PENN Interactive to help streamline reporting lines, enhance operational efficiencies, and leverage shared resources across PENN.

PENN Entertainment CEO Jay Snowden

However, Mr. Snowden wanted to be reassuring that the layoffs would be limited. Mr. Snowden also took the opportunity to thank impacted colleagues and team members for their service to PENN, and vowed to ensure that they transition smoothly to new career opportunities.

Mr. Snowden similarly noted that the interactive arm of the business remains a key focus for the company and that it would continue to add talent and improve its existing technology.

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.

PENN Entertainment CEO Jay Snowden

Much of this can be attributed to ESPN Bet’s own woes and struggles with the unyielding sports betting market in the country. Although wielding a powerful brand, and backed by a media juggernaut, ESPN Bet has mostly fallen short of its ambitious front-door storming of the sports betting market.

ESPN Bet Is Just Another Struggling Pretty Face

Part of this has to do with increasing costs of doing business – including intensifying competition, bigger capital spending, and tougher local regulation, not to mention a wave of legislative pushes for harsher taxing of gambling business.

All of this has left ESPN Bet with a market share of only 3.2% from 4.7% in the first three months of 2024. Investors have been dissatisfied with this performance, urging for financial tightness and focus on driving value and creating a stronger brand.

Some have called for PENN Entertainment to be acquired by a bigger company that can turn its fortunes around. One of the floated names is Flutter Entertainment, which could be mulling such a move.

Many Aspiring Betting Firms Are in the Same Boat

ESPN Bet, under Penn Interactive, is hardly the first company in the cut-throat sports betting market in the US to face debilitating competition. Many companies have already exited voluntarily, faced with a realization that long-term profitability in the market from sports betting may be out of reach.

888 Holdings (now evoke), PointsBet, and MaximBet are among some of the names that come to mind when looking for examples of significant market players who have decided against pursuing the American sports betting dream.

Most recently, Super Group confirmed that it will fold its sports betting operations in nine states, costing it severance fees, but deemed as the smartest decision moving forward.