The sports betting industry could be in store for a major shakeup.

Reuters has reported that gambling giant Boyd Gaming has approached Penn Entertainment about acquiring it. The deal would be one of the largest mergers in the US gambling industry's history. 

While Boyd has taken the first steps to begin the process, there are many hurdles they will need to clear before any deal can proceed. The biggest of which is that Boyd is a smaller company than Penn, meaning they’ll need to get additional funding to make an offer. No partner has been announced yet, though Boyd’s approach means they likely have confidence that it can get done.

Another major hurdle will be Walt Disney, which partnered with Penn to launch the ESPN Bet online sportsbook. The deal between the two companies was completed in 2023, and the sportsbook went live in November. While Boyd Gaming is a prominent player in the gambling industry, it does not have experience running a national online sportsbook. Boyd owns a 5% share of FanDuel and operators some Tribal sportsbooks, but that experience may not translate to a platform like ESPN Bet. 

Given the amount Walt Disney has invested in their product, it may not be willing to trust Boyd.

Boyd’s decision to approach Penn among all available operators is not random. As profitable as the industry, Penn has suffered many bumps and bruises along the way. That started with the now-defunct Barstool Sportsbook, which drew the ire of nationwide regulators over how the platform marketed itself. This led to Barstool exiting the partnership, only to be replaced by ESPN.

While ESPN Bet has found some success, it has yet to gain the desired traction. The platform trails far behind DraftKings and FanDuel, struggling to compete with BetMGM and Caesars in many markets. Many other operators have dealt with the same struggles to compete, leading many to exit the industry altogether.