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Penn National to acquire theScore for $2.0bn as it seeks own platform


Penn National Gaming has agreed a deal to acquire Canada-based theScore in a $2.0bn cash-and-stock deal, with chief executive Jay Snowden suggesting he plans to migrate Penn’s betting products to a platform currently being built by theScore.

Penn will pay $17.00 in cash and 0.2398 shares – $17.00’s worth – of its stock for every theScore share, for a total consideration of $34.00 per share. This will mean that theScore shareholders will hold approximately 7% of the new combined business, while current Penn shareholders will hold the remaining 93%.

The deal is set to close in the first quarter of 2022.

Penn chief executive Jay Snowden said theScore would complement Penn’s existing Barstool brand of sportsbooks and online betting and gaming products.

“We are thrilled to be acquiring theScore, which is the number one sports app in Canada and the third most popular sports app in all of North America. theScore’s unique media platform and modern, state-of-the art technology is a powerful complement to the reach of Barstool Sports and its popular personalities and content,” Snowden said.

“We are now uniquely positioned to seamlessly serve our customers with the most powerful ecosystem of sports, gaming and media in North America, ultimately creating a community that doesn’t currently exist.

“Users will enjoy a unique mobile sports betting and icasino platform with highly customized bets and enhanced in-gaming wagering opportunities, along with highly engaging, personalized sports and entertainment content, and real time scores and stats. We believe this powerful new flywheel will result in best-in-class engagement and retention.”

Snowden added that the deal would allow Penn an opportunity to put all its products on a proprietary platform. Currently, Barstool sportsbook uses Kambi’s platform.

“Importantly, the transaction provides us with a path to full control of our own tech stack. theScore has developed a state-of-the-art player account management system and is finalizing the development of an in-house managed risk and trading service platform,” he said. “This should lead to significant savings in third party platform costs and allow us to broaden our product offerings – providing the missing piece for operating at what we expect to be industry leading margins. In addition to the synergies, we’ll be gaining access to theScore’s deep pool of product and engineering talent and data-driven user analytics which will help drive our customer acquisition, engagement, retention strategies and cash flows.”

“Operators that have achieved early online market share have done so primarily through first mover advantage, leveraging existing customer databases and significant marketing spend. We believe the long-term winners will be defined by best-in-class products, bespoke content, efficient customer acquisition, multi-platform reach and broad market access.”

Kristian Nylén, Kambi chief executive officer and co-founder of Kambi, however, noted that theScore has not yet developed its own platform and so any loss of business for Kambi is in the much longer term, while the two businesses should continue to work together for the duration of their current contract.

“I congratulate Penn National Gaming on today’s acquisition of theScore. While I respectfully disagree with Penn National Gaming’s long-term view on vertical integration, the entity they have acquired has yet to develop a proprietary sportsbook, and certainly not one to a similar high standard as what we offer. The transaction announced today creates some exciting opportunities for Penn National Gaming and I look forward to working with them over the coming years in support of their sportsbook growth.”

John Levy, chairman and chief executive of theScore, said both companies have a shared vision on the intersection of media and betting.

 “This deal brings together two companies that share a vision for how media and gaming intersect, and we could not be more excited to join the Penn National family,” he said. “I’m proud of theScore team and all of our accomplishments, and believe the time is right to take the next step and align with a company in Penn National with the resources and scale to accelerate our business. We are excited to join forces with Penn to form the most powerful media and gaming company in North America.

“We’ve built an innovative, technology-led integrated media and gaming business that has us poised for success across North America, including the highly anticipated upcoming rollout of commercial sports betting in Canada. With Penn’s support, we will continue to invest in building our Canadian operations, growing our footprint and expanding our workforce. On a personal note, Benjie and I are very much looking forward to continuing to head up theScore as part of the new combined company.

“We have been strategic partners with Penn National since 2019 and have come to realize that they have the same strong culture and appreciation for how to grow a business. Jay and his team have done a tremendous job building an exceptional retail business and online gaming platform in partnership with Barstool Sports and we are confident that by combining our leading sports media brand and proprietary technology, we will solidify Penn National as a market leader.”

The deal comes just over a month after Canada legalized single-event sports wagering. Prior to this, betting in Canada was limited only to wagers on multiple events.

In the third quarter of its 2020-21 financial year, ended 31 May, theScore reported negative gross gaming revenue, despite record handle of $73.0m. This followed a Q2 in which theScore’s net gaming revenue was negative, with gross gaming revenue of just CAD$96,000.