Penn National Buys Two Gaming Studios to Expand Barstool Sports Brand

by Dave Schwab - 5/4/2021

Penn National Gaming is a casino, hospitality and entertainment corporation based in Wyomissing, Pennsylvania. With deep horse racing roots in the Keystone State, the company also owns and operates a number of land-based casinos in multiple states across the country.

It entered the realm of legal online sports betting through an equity stake in Barstool Sports. This led to the development of the Barstool Sportsbook App. The initial rollout took place in Penn National’s backyard with Pennsylvania as its initial legal sports betting market.

Since that point, the app has been launched in Michigan and Illinois with Indiana next on the expansion list. While the current sports betting footprint is much smaller that the major US players such as FanDuel and DraftKings, Barstool Sportsbook has gained wide-scale appeal where available.

This is especially true among the key demographic of younger males of legal betting age. Penn National’s latest acquisition is designed to expand its presence and relevance with this core group. The two-pronged approach involves the development of exclusive online games while also building brand loyalty.

The company announced that it has come to terms with two gaming development studios in Massachusetts. The first studio is HitPoint and the other is a spinoff of that brand LuckyPoint. The financial terms of either deal were not released.

While the ultimate goal is to produce exclusive content for the Barstool Sports brand, the starting point is the formation of Penn Game Studios. This will serve as an in-house gaming development arm of Penn National Gaming.

Investors reacted positively to the announcement with share prices of PENN rising 1.5% to $90.47 on the Nasdaq Exchange in Monday trading.

HitPoint’s claim to fame was development work for games based on Dreamworks “How to Train Your Dragon” and Star Wars.” The studio also did work for Ellen DeGeneres and Microsoft. The two studio’s 30 employees will now be part of Penn National’s interactive division.

Jon Kaplowitz is the senior vice president of the company’s interactive division. He is looking for the first Penn Game Studio’s exclusive gaming content to make its debut later this year. Penn National has aspirations of becoming a major player in the online casino market.

While online casino games are only legal in five states right now (New Jersey, Nevada, Pennsylvania, West Virginia and Delaware), the upside potential with this online gaming vertical is extremely high.

Part of the plan is to develop exclusive games for two distinct audiences. The first is Barstool Sports customers along with the online sportsbook member base. The other is MyChoice customers.

The first group are younger sports-oriented players that lean towards casino table games. Penn Games Studios will be tasked with creating digital casino table games to market to this piece of the market.

MyChoice is tied to members of Penn National’s customer loyalty program. Right now, there are more than 20 million users across all of the company’s retail casino properties. Penn Game Studios will be focusing its energy on creating online slot games that will appeal to this segment.

Over the coming months, there will be a strong push to build the overall Barstool brand. The addition of exclusive online casino games is viewed as an excellent way to enhance any existing brand loyalty.

Penn National Gaming CEO Jay Snowden had already mentioned that the company is looking expand its online presence into New Jersey and four other markets ahead of the new NFL season in September.

He also mentioned a heavier emphasis on the development of exclusive gaming content as an expansion of its “omni-channel strategy.”

Start:	November 21, 2024 @ 7:30 PM
Expert:	Scott Spreitzer
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Penn National Buys Two Gaming Studios to Expand Barstool Sports Brand

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