Flutter reportedly considering potential acquisition of PENN

Another major bookmaker is reportedly eyeing PENN Entertainment.

This could shake up the entire industry.

TheDeal.com cites sources claiming that Flutter Entertainment, owner of the popular American bookmaker FanDuel and a company listed on the New York Stock Exchange, is “evaluating” the company managing ESPN BET.

The report sent Flutter shares up 5 percent on Friday.

This isn’t the first time there’s been talk of a PENN takeover. Sources told Reuters in late June that Boyd Gaming had approached the gaming rival about a potential takeover.

Boyd owns a 5% stake in FanDuel and manages 28 properties in 10 U.S. states.

The move comes on the heels of activist investor Donerail Group’s suggestion in May that PENN should go public because it could fetch twice the market price if sold.

Potential obstacles

Flutter, the global sports betting and gaming company that also owns brands such as Paddy Power, PokerStars and Sportsbet, has undergone a bit of a power shake-up at the highest level.

The Ireland-based company replaced its CFO in May, and two new board members joined this month. Is the well-funded company ready to take on a task as big as acquiring PENN, which operates more than 20 U.S. casinos?

The ESPN deal could also be a hindrance to a potential sale. PENN paid $1.5 billion to acquire the naming rights to ESPN BET, which operates in 18 U.S. states.

The mobile sports betting operator has yet to completely displace the dominant market positions of FanDuel and DraftKings, despite rebranding from Barstool to ESPN.

It’s an attractive name, but it remains to be seen how the Disney-owned company will react to the takeover or how the brand buyout agreement will be accepted.

Additionally, FanDuel and ESPN BET are competitors operating in the same U.S. states, which could potentially raise regulatory concerns.

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