The ESPN Wager app on a smartphone organized in New York, US, on Thursday, Feb. 22, 2024.
Gabby Jones | Bloomberg | Getty Photographs
Penn Leisure will lay off about 100 workers because it focuses on progress for ESPN Wager.
CEO Jay Snowden informed employees members in an inside electronic mail that the adjustments will improve operational efficiencies following its 2021 acquisition of Canadian media and gaming powerhouse theScore.
The corporate employs about 20,000 individuals.
“When PENN acquired theScore, we hit the bottom operating with the build-out of our proprietary tech stack and the migration of our sportsbook to theScore’s best-in-class-platform,” Snowden wrote within the memo, which was seen by CNBC. “This led us to quickly put aside any potential organizational adjustments that will usually observe a serious acquisition.”
Penn went on to say it is embarking on a brand new section of progress in its interactive enterprise, which incorporates ESPN Wager, a $2 billion branding partnership with Disney’s ESPN. Snowden mentioned the initiatives embrace product enhancements and deeper integration into ESPN’s ecosystem.
Traders are impatient for Penn to reveal its muscle with the rebranded sportsbook, and activist investor Donerail Group has referred to as on the board to promote the on line casino firm.
Rumors have swirled in regards to the potential curiosity from many different on-line gaming and brick-and-mortar on line casino corporations.
Truist gaming analyst Barry Jonas wrote in a be aware Thursday {that a} sale is unlikely within the close to time period due to the complexity of a transaction that will seemingly contain main divestitures.
Penn’s launch of latest ESPN Wager options this fall throughout soccer season ought to meaningfully enhance its product, Jonas mentioned, and a give attention to prices point out the corporate’s dedication to seeing its funding yield outcomes.
Penn shares have plummeted 25% yr to this point. It has missed earnings expectations the final two quarters and lowered steerage.
“Traders proceed to surprise what an ESPN Wager success might seem like, and the way far more funding (past what’s guided) it’s going to take to succeed in,” Jonas notes.
Truist has a purchase ranking on Penn and a worth goal of $25.