Penn sees strong start for theScore Bet in Ontario
Penn Entertainment has seen strong early results from theScore Bet online sportsbook and casino in Ontario, company officials said Thursday, bolstering hopes for arguably its most critical iGaming jurisdiction.
Penn Entertainment, rebranded Thursday from the former Penn National, acquired Toronto-based theScore for $2bn last year. The venerable sports media company that developed an in-house online sportsbook and iGaming platform has become the center point of Penn’s Canadian expansion plans.
Speaking during Penn’s earnings call Thursday, CEO Jay Snowden said 76% of Ontario sports bettors already use theScore Bet’s digital sports media platform. More than half of bettors who go on to use theScore Bet’s sportsbook have also played in the company’s digital casino.
“We’re actually doing as well as we thought we would do in Ontario,” Snowden said during Thursday’s earnings call. “I think we will be a double-digit market share player in Ontario, both in online sports and online casino. We don’t have public numbers yet, but when it’s released, we think that’s where it will be.”
More than 30 companies have been licensed to launch online casino and/or sports betting platforms in Ontario, North America’s most-populated legal iCasino market. TheScore is also competing against former “grey” market operators that have taken bets in the province for years before the launch of regulated commercial iGaming in April of this year.
Achieving more than 10 percent market share in Ontario against such extensive competition would likely allow Penn to top its major American rivals in Ontario after it was unable to do the same in the US.
Live in 12 states, Penn Entertainment’s online Barstool Sportsbook has gained low single-digit market share in the US. TheScore, meanwhile, faired even more poorly in the US, where the brand is far less known, and was shuttered by Penn earlier this year after launching in only four states.
Penn has focused its digital player acquisition efforts around its two marquee brands, instead of through the massive marketing and proportional pushes of the North American market leaders. FanDuel, DraftKings, BetMGM and Caesars have combined for roughly 80% of the US online gaming market, but have spent billions in play acquisition costs in the process.
BetMGM and Caesars are targeting profitably for their respective online gaming platforms by the fourth quarter of 2023, officials from both companies said during earnings calls earlier this week. Snowden said Thursday Penn is targeting profitability by the end of 2022.
Penn Entertainment CEO Jay Snowden: “We’re actually doing as well as we thought we would do in Ontario.”
The larger question coming in the following years will be if the leading operators by market share will be able to not only keep their slice of the online gaming pie but also see a matching return on their investments. By not spending as much on play acquisition, Penn likely has a quicker path to profitability but also a lower ceiling in long-term potential revenue.
Snowden reaffirmed Thursday that Penn will continue on its current player acquisition trajectory with the hopes Barstool “Stoolies” will create a more loyal customer base willing to place personality-driven, higher-margin parlay wagers. This strategy also centers on converting sports fans from both Barstool and theScore into far-more lucrative online slot and table game players.
As part of that growth, Penn reaffirmed Thursday it was developing additional casino games through its in-house proprietary tech platform. The company has integrated its new tech stack into theScore Bet in Ontario during July with plans to have it live within the Barstool app by fall 2023.
As part of Thursday’s earnings presentation, Penn’s digital gaming division saw total revenues of nearly $155m during Q2 2022 with an adjusted EBITDA loss of $20.8 million.
Overall, the company exceeded its consensus second-quarter revenue projections but missed its earnings per share projections. After an initial spike of as much as 5% following its earnings release before market open Thursday, Penn’s stock was up a little under a percent as of noon eastern standard time.