Penn Entertainment (NASDAQ: PENN) might contemplate a technology-focused acquisition this year to bolster its ESPN Bet online sports wagering division.
According to Eilers & Krejcik Gaming (EKG), technology plays a crucial role in the pricing and trading strategies of sportsbook operators, as stated in their recent report. Uptime for live betting is crucial — a field where ESPN Bet has recently performed inadequately.
"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 betting, serves as a profit source for gaming firms and is deeply embedded in technology. Industry analysts anticipate that gaming firms will seek technology partnerships in 2025, as online sportsbook operators aim to enhance their customer acquisition and retention strategies and technology infrastructure. Such acquisitions can also be beneficial for assisting operators to enter new digital gaming markets.
In the realm of online sports wagering, technology plays a crucial role for yet another reason: customer satisfaction. This is one reason why DraftKings and FanDuel often achieve high ratings in customer satisfaction and usability surveys. Notably, data suggest that ESPN Bet is attracting a younger clientele compared to rivals like DraftKings and FanDuel.
That might indicate that some of ESPN Bet's initial technological initiatives are yielding results. This involves connecting ESPN Bet accounts to ESPN digital platforms and appointing Aaron LaBerge as chief technology officer (CTO) in April of last year. He had spent twenty years at Disney, which included a period at ESPN. However, there are tasks to complete.
Operators are progressively seeking technology to enhance lucrative same-game parlays (SGPs) and distinguish themselves from rivals.
“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.”
Rumors about consolidation in sports betting technology are abundant, suggesting there are many possible takeover targets, but Penn has not verified that it is looking for such a transaction.
Referencing channel checks, EKG identified gaming technology provider and software developer Huddle Tech as an instance of a sports betting technology company that is “currently engaged in a sales process.” This has not been publicly discussed, and it remains uncertain whether Penn would attempt to acquire that company.
Huddle is the united organization formed through the merger of Huddle Gaming and Deck Prism Sports, which is based in Las Vegas. Established in 2019, Deck Prism is a leader in in-play markets for the NFL, NCAA football, NBA, NCAA basketball, MLB, and the NHL.
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