Can other online operators compete with DraftKings in terms of in-house casino game development?

Penn National Gets Into The Innovation Game With New In-House Product Development Team

Penn National Gaming was already known for its Barstool online sports content. Today, it announced the creation of a new team to develop in-house casino games. It’s a different kind of content from what Barstool provides, but another important differentiator for Penn’s brands.

This sort of strategy is increasingly important in the US online casino and sports betting spaces. Penn National has already managed to set itself apart from the pack, while competitors are attempting to catch up with that side of the business.

These new plans differ from the February 2020 agreement with Barstool Sports in one important way. While that deal was a partnership with a previously independent company, Penn’s new wing is wholly home-grown.

The new in-house team appears aimed mainly at game development. Penn may be seeking to emulate the success of DraftKings Casino, known for its uniquely-themed, exclusive games.

How Penn National plans to build in-house content

The in-house content creation team is called Penn Game Studios and will reside within Penn Interactive.

The 30 designers, artists and engineers who will be making up the team are coming from game design and development studio HitPoint Studios and real-money gaming company LuckyPoint. These entities that Penn National intends to acquire were a single company until 2019, when HitPoint spun off LuckyPoint.

LuckyPoint appeals to the video gamer who still resides in many millennials with what Penn National terms its “retro-style arcade games and puzzle games.”

Jay Snowden, President and CEO of Penn National, said he the ability to build exclusive content for Penn Interactive users as being invaluable. The content will “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.”

Mychoice is Penn’s customer loyalty program.

Penn National is touching on many trends

If Penn is hoping having it’s own in-house content division will help it compete with DraftKings, it has a bit of a climb ahead. DraftKings has a long head start on Penn in this respect. That said, “long” is relative in such an environment with such a short history as legal US online gambling.

It’s far from the only company playing catch-up in this regard. Carousel said last month that it was working with Maxim to debut an online casino and sports betting app called MaximBet. The site that’s live now appears to appeal to young men who are the main demographic of sports bettors.

That target demographic is where Penn’s plans most resemble Carousel’s. Carousel plans to leverage Maxim‘s content on “print, digital, social and experiential platforms” for the app. Maxim is, of course, primarily a magazine for young men.

Penn Interactive’s choice to acquire LuckyPoint similarly seems designed to appeal to younger gamblers. Its products include concepts similar to GameCo’s “video game casino” products. These are gambling products with a skill element and arcade-like mechanics.

GameCo and other similar companies haven’t yet found the secret recipe to make such games a commercial success. That doesn’t mean it won’t happen, however. It should be interesting to watch Penn Interactive work on upping its game with this new in-house content team approach.

- Heather Fletcher is the lead writer with OnlinePokerReport. She's a career journalist, with bylines in The New York Times, Adweek and other publications. Reach her at [email protected]
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