Barstool parent company Penn Entertainment announced last year it would transition away from Kambi, its primary tech provider since July 2019. Kambi-powered Barstool sportsbooks are live online in 15 states, 13 of which include online wagering.
“Kambi has been a topflight supplier to Penn in our digital evolution,” Penn CEO Jay Snowden said in a statement. “Kambi’s well-proven, high-quality technology and services have empowered Penn as we pursued our differentiated sports betting strategy, and I’m pleased to have secured our partnership to ensure a seamless transition for both companies.”
Kambi will stay on for future state launches before the transition. Barstool’s online sportsbook is expected to go live in Ohio, Maryland and Massachusetts, among other potential states, before next year’s football season.
The agreement provides for ongoing revenue share payments related to online and retail sports betting services for as long as it provides its services, Kambi said in a statement. The European tech provider will also receive one-time fees of $12.5m for early termination and $15m for transition services.
Wednesday’s announcement formalizes a long-expected development. Penn acquired Ontario-based sports betting operator theScore Bet for $2bn last year, in large part for the company’s in-house tech platform.
Penn subsequently shuttered theScore bet in the US, keeping the brand focused on the Canadian market. TheScore Bet completed the transition to its in-house tech earlier this year, a few months after commercial sports betting launched in Ontario.
Penn Entertainment CEO Jay Snowden: “Kambi has been a topflight supplier to Penn in our digital evolution.”
In practice, this sets up more single-game parlays, which have higher profit margins than traditional straight bets, promoted by leading figures such as founder Dave “El Presidente” Portnoy as well as Dan “Big Cat” Katz, among others.
Tech platforms are critical – and massively complex – operations that can help set lines, manage risk and collect user data, among a host of other responsibilities. It is not uncommon for sportsbooks to take several years to complete the transition to a new platform.
As major US operators announce plans to curtail advertising spending, these same companies have reiterated that product will be the key differentiating factor in the market. This places even more onus on a competitive tech platform, a risk Penn takes by acquiring theScore’s proprietary tech and using it for its US sports betting offering.
Many major operators have already taken similar risks.
DraftKings left Kambi in 2020 and merged with tech provider SBTech as part of a larger initial public offering. Caesars Entertainment acquired European gaming operator William Hill, the first sportsbook to take a legal single-game bet outside Nevada, rebranding as Caesars Sportsbook in 2021 while using its tech.
FanDuel and BetMGM, two of the nation’s top three combined iCasino and sports betting operators by market share, both use tech from their respective European owners. FanDuel is majority owned by Flutter Entertainment while BetMGM is a 50/50 joint venture between MGM Resorts International and Europe’s Entain.
Rush Street Interactive, parent to BetRivers and PlaySugarHouse, is Kambi’s most prominent US sportsbook client. The company also has a number of smaller American sportsbooks, most of which are branded around individual casinos.
