An emerging legal sports betting operator is temporarily shuttering its business amid a transition to its own in-house technology.
Barstool Sportsbook, owned by PENN Entertainment, has announced that it will shut down its online betting sites to undergo a 72-hour planned maintenance period that started the night of July 9. Barstool’s decision to undergo changes to its sportsbook is the result of the operator shifting away from gambling software provider Kambi to create its own in-house proprietary platform. Barstool and Kambi had worked together since 2021 with the acquisition of theScore.
As a result of Barstool’s decision to part ways with Kambi, the PENN-owned operator will pay a $12.5 million settlement fee to Kambi. Barstool will also have to fork over an additional $15 million for costs associated with “transition services.”
Barstool’s maintenance period will allow the sportsbook to launch its own betting technology but comes at the cost of customers. Users of Barstool Sportsbook will be unable to access their accounts impacting the ability to request withdrawals. The temporary shutdown will also see customers lose the ability after relaunch to cash out of any open wager placed prior to July 10.
Despite the inability to use Barstool Sportsbook during the maintenance period, the company is looking to improve the user experience with the updates. The platform will have faster loads, withdrawal times, and expanded player prop markets. Barstool will also upgrade its promotions.
Business decision
Barstool’s shift to its own technology will allow the sportsbook to cut costs as it looks to narrow losses. PENN reported $1.67 billion in revenue for the first quarter ending March 31, 2023 — a 7% increase year-over-year. The company’s interactive segment, which includes Barstool Sportsbook, posted $233.5 million in revenue in Q1 2023 but had an adjusted EBITDA loss of $5.7 million. The losses came as Barstool Sportsbook expanded to Ohio and Massachusetts.
PENN purchased a 36% stake in the Barstool Sports media brand in 2020 for $163 million. In February, the company acquired the remaining 64% of Barstool in a deal valued at $388 million.
