One of the leading sports gambling stocks fell sharply on Wednesday after media giant ESPN took a large step into the online betting world.
Shares of DraftKings were down 10% in midday trading after Penn Entertainment announced that it had signed a 10-year deal with ESPN. Penn will rebrand its sportsbook — currently named after Barstool — to ESPN Bet.
ESPN, which is part of Disney, had previously been reluctant to fully embrace the highly competitive online gambling industry. However, ESPN is shedding cable subscribers, and Disney CEO Bob Iger told CNBC in July that the company was open to strategic partnerships with the sports media brand.
