Penn Entertainment (NASDAQ: PENN) could consider a technology-related acquisition this year in an effort to prop up its ESPN Bet online sports betting unit.
That’s the take of Eilers & Krejcik Gaming (EKG), which said in a new report that technology is essential to sportsbook operators’ pricing and trading efforts. It’s key for live betting uptime — an area in which ESPN Bet recently scored poorly.
“ESPN Bet ranked fairly low in our recent testing of NFL live betting uptime, and we wouldn’t be surprised to see ESPN Bet operator Penn National buy some tech to boost its performance here,” according to the research firm.
Live, or in-game wagering, is a money-maker for gaming companies and it’s heavily rooted in technology. Industry observers expects gaming companies will be on the prowl for tech deals in 2025 as online sportsbook companies look to bolster customer acquisition and retention tools and tech stacks. Those acquisitions can also be additive in terms of helping operators make inroads into new digital gaming segments.
Signs ESPN Bet is Focusing on Tech
In the world of online sports betting, technology is vital for another reason: customer satisfaction. It’s one reason why DraftKings and FanDuel frequently score highly in customer satisfaction/ease of use surveys. Interestingly, data indicate ESPN Bet is capturing a younger client base than competitors such as DraftKings and FanDuel.
That could be a sign some of ESPN Bet’s early tech efforts are paying off. Those include linking ESPN Bet accounts to ESPN digital platforms and the hiring of Aaron LaBerge as chief technology officer (CTO) last April. He previously spent two decades at Disney, including a stint at ESPN. But there’s work to be done.
Operators are increasingly looking to tech to power highly profitable same-game parlays (SGPs) as well as set themselves apart from competitors.
“As the U.S. OSB app market consolidates, we are seeing a natural backlash from our testers: why does everything feel the same?,” adds EKG. “With SGP kind of maturing, where is the next major, differentiated feature to break through in the minds of OSB app users? FanDuel’s Your Way Parlay and other line-setting functionality appears to be the early frontrunner.”
Potential Targets for Penn
There’s no shortage of sports betting technology consolidation rumors, implying potential takeover candidates are plentiful, but Penn hasn’t confirmed it’s seeking such a deal.
Citing channel checks, EKG mentioned gaming technology provider and software developer Huddle Tech as an example of a sports betting technology outfit that is “currently running a sales process.” That hasn’t been mentioned publicly and it’s not clear if Penn would be a bidder for that firm.
Huddle is the combined entity born by way of the merger of Huddle Gaming and Las Vegas-based Deck Prism Sports. Founded in 2019, Deck Prism is a pioneer for in-play markets for the NFL, NCAA football, NBA, NCAA basketball, MLB, and the NHL.