Walt Disney's (DIS) ESPN BET could be shut down in 2026, just three years after signing a 10-year, $2 billion deal with Penn Entertainment (PENN) in 2023, the New York Post reported Friday, citing Penn's earnings call.

"When we announced our partnership with ESPN in the summer of 2023, both sides of this partnership made it very clear that we expected to compete for a seat at the podium, and we're not on pace right now to do that," Penn Chief Executive Jay Snowden said on the earnings call, according to FactSet transcript.

Penn National can opt out of the deal with ESPN BET after the third year in 2026, according to the New York Post report.

"But if for whatever reason we're not hitting the levels that we need to, then obviously as you're approaching that third anniversary, you have a three-year clause in the contract that both sides will have to what's in their best interests," Snowden said.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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