PENN Entertainment President Jay Snowden revealed in a now-published internal email that the company recently laid off employees as a means to focus on the development of ESPN BET and the company’s overall digital growth.

According to CNBC, PENN Entertainment laid off “about 100 employees” to prioritize the continued growth of its sports betting operator and to streamline services.

The operation is currently live in 18 states, but has an eye on expanding into future potentially legalized jurisdictions, which means we could eventually see the arrival of ESPN BET in Minnesota.

PENN Focusing on Digital Growth

A.J. Perez, senior reporter for Front Office Sports, was the first to publish the internal company email from Snowden on the social media platform X.

The email, which was sent to employees on July 17, notifies them of the layoffs.

“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,” Snowden wrote in the message.

The PENN Entertainment president revealed that the company and its “interactive business” is well positioned moving forward.

“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 our partnership with ESPN with upcoming product enhancements and a deeper integration into the ESPN ecosystem,” he wrote.

Despite the message to focus on the growth and integration into the ESPN ecosystem, Perez did note that a number of laid-off employees focused on ESPN BET.

ESPN BET Not in Conversation of Top Operators

Despite the desire to focus on ESPN BET’s digital growth, the sports betting operator has yet to offer the type of return PENN has likely hoped for.

PENN Entertainment and ESPN entered into its sports betting partnership nearly one year ago. The deal was announced on Aug. 8, 2023, which saw PENN securing exclusive rights to the ESPN BET trademark for online sports betting in the U.S. for an initial 10-year term.

The deal may be extended for an additional 10 years upon mutual agreement. PENN Entertainment agreed to pay $1.5 billion to ESPN over the first 10 years and granted ESPN approximately $500 million of warrants to purchase 31.8 million PENN common shares.

ESPN BET launched on Nov. 14, 2023, but has not reached the level of performance of the top sports betting operators in markets like the PA sports betting landscape. It lags well behind market giants DraftKings and FanDuel, which account for more than 75% of the total market share in the U.S.

ESPN BET likely hopes that its performance will improve this football season, as it is poised to launch in New York. It gained market access into the Empire State after acquiring WynnBET’s license in February 2024.

It will likely look to expand into other markets as well, including the newly opened Washington, D.C.