Penn National Buys HitPoint Studios, LuckyPoint to Fortify New Gaming Unit
Posted on: May 3, 2021, 08:36h.
Last updated on: May 3, 2021, 12:03h.
Penn National Gaming (NASDAQ:PENN) has announced the creation of Penn Game Studios (PGS). It is a unit dedicated to developing new online casino games, and a recent acquisition is aimed at bolstering that fresh business.
The Pennsylvania-based casino operator said it’s purchasing HitPoint Studios, Inc. and LuckyPoint Inc. The latter is the real money gaming company previously spun-off from HitPoint. Financial terms of the transaction weren’t disclosed. Penn National said the deal “is expected to close in the near term.” The acquisition could function as a complement to the operator’s burgeoning Barstool Sportsbook brand.
“We will now have the ability to create exclusive content for our audiences, further leverage the Barstool Sports brand and our database of 20 million mychoice customers, and create cross-marketing opportunities with our brick and mortar facilities,” said Penn National CEO Jay Snowden in a statement.
Massachusetts-based HitPoint was founded in 2008. It spun out LuckyPoint in 2019 to focus on the development of real money games.
Penn iGaming Push
The Ameristar operator’s announcement on PGS and subsequent dealmaking come as more industry observers are forecasting massive growth for iGaming.
While sports betting garners most of the attention, Goldman Sachs estimates internet casinos will grow to a $14 billion industry in 2033, up from $1.5 billion today. Last month, MGM Resorts International CO Bill Hornbuckle called iGaming “The secret to this business,” noting that it will eventually drive two-thirds of the bottom line in the arena.
Analysts see more legislative catalysts looming for online casinos, as far fewer states currently allow those compared to sports betting. Just five states permit online casinos, compared to sports betting’s 27 and Washington, DC, territories where sports betting is either legal or live and legal. Additionally, iGaming economics are more compelling than sports betting, because margins are superior and gamblers, on average, are more devoted to internet casino games than sports wagering.
What Penn Is Buying
HitPoint could ultimately prove to be a shrewd acquisition for Penn, as the operator seeks a deeper bench of online gaming offerings.
“HitPoint has created more than fifty games for some of the largest publishers and brands in the industry, including Microsoft, Ellen DeGeneres, EA/PopCap, Disney, Google, and NBCUniversal,” according to the statement.
The aforementioned LuckyPoint business offers web-based slots and table games across desktop and mobile platforms. HitPoint and LuckyPoint will be folded into Penn National’s wholly-owned interactive division, Penn Interactive Ventures.
Revenue and profitability metrics for the newly acquired brands weren’t disclosed, and Penn National didn’t say if the purchase would be accretive to earnings.
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