Where Penn Entertainment’s new CTO places his bets

It also closely coincides with a new beginning for Aaron LaBerge, who in July was appointed to the role of chief technology officer at casino gambling and online sports betting operator Penn Entertainment.

He joined Penn to lead its tech efforts integrating betting with the ESPN brand, as well as to connect the company’s physical properties—casinos, restaurants, hotels, and horse tracks—and combine them with digital properties like ESPN Bet.

“I think that is a massive opportunity for us,” says LaBerge.

The sports betting industry is fast growing, yet still maturing in the wake of a 2018 ruling by the Supreme Court that had struck down a 1992 law that had banned commercial sports betting in most states. In the years since, 38 states and D.C. have allowed some form of sports betting, though companies like Penn have to earn licenses in each to operate legally.

Last year, Americans wagered a record $120 billion on sports betting, up nearly 28% from 2022, according to the trade group the American Gaming Association. Those bets translated to $10.9 billion in revenue. But data shows ESPN Bet is racing from behind, lagging the market share of FanDuel, DraftKings, and other rivals.

Penn operates ESPN Bet under a 10-year license signed last year, in which it agreed to pay ESPN owner Walt Disney Co. $1.5 billion in cash, as well as millions of stock warrants, allowing the companies to place a bigger bet on sports gaming. ESPN Bet is about to earn its 19th state license to operate, pending approval from New York, which is expected within the next few weeks.

The relationship between ESPN Bet and Penn explains why joining Penn was an easy leap for LaBerge to take. He’d spent over two decades at Disney, working on big projects like the initial creation of ESPN.com and the first live draft to appear on the internet. In his final role before joining Penn, he had served as CTO for the ESPN and Disney Entertainment divisions for more than five years, basically all of Disney’s businesses, minus the parks. 

LaBerge didn’t initially intend to take on the top tech leadership role at Penn. Due to Disney’s vested interest in the success of ESPN Bet, he had consulted with Penn CEO Jay Snowden as the gambling company conducted a CTO search. An offer was even made to a candidate, who ended up taking a role at Amazon instead. After that setback, LaBerge realized he was up for a new challenge.

At Penn, he will be the first CTO to oversee the entire business, which includes physical properties like the casinos, online gaming, and sports betting. 

One page of the Disney playbook he wants to emulate is the company’s success developing user identities that provide insight into how a consumer spends their money across parks, the streaming services, and other Disney IP. That gives Disney a trove of data to use for more tailored marketing materials, in turn generating more revenue per user.

“It’s very similar to a lot of the connectivity that needs to happen at Penn, as we connect our land-based casinos with our interactive properties,” says LaBerge.

Being so new to the role, LaBerge couldn’t share too many specifics on how that would work quite yet. It’ll be a work in progress in the coming years. He hasn’t made any changes to Penn’s IT organizational structure and remains committed to Penn’s cloud partnership with Google.

Competing with the likes of DraftKings and Fanatics, LaBerge foresees that the industry’s technology stack will operate at parity, meaning all sports betting companies will operate apps that similarly allow users to place and track their bets. The greatest way to stand out, he asserts, is to lean on ESPN’s branding. 

He is working to integrate sports betting into other parts of ESPN’s business, including targeting the 12 million users that play fantasy football easy season, and the millions more that watch sports but don’t currently place bets. ESPN Bet is currently changing to offer some users more simplified language so they don’t need to fully understand odds and spreads and other sports betting lingo to place a bet. The language can be as simple as: “Bet $5 to win $20. Pick the winner of the game.”

“We have an opportunity to really target how we display betting information based on the sophistication of the better,” says LaBerge.

John Kell

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NEWS PACKETS

California AI law awaits final sign off. California lawmakers approved a bill that would create new restrictions for artificial intelligence, a bill that would require large AI companies to test their systems for safety before releasing them publicly. The bill, known as SB 1047, would only apply to the world’s largest AI models and could make developers liable for harms caused by their technologies and would also require an “emergency stop” button that can shut down the entire AI model. Tech leaders are split on their support for the bill, with some critics claiming it will hurt research advancements for the technology. Gov. Gavin Newsom has until Sept. 30 to consider the bill.

OpenAI and Anthropic agree to safety testing. As AI regulation takes time to form in the U.S., the federal government recently announced agreements with generative AI pioneers OpenAI and Anthropic to test and evaluate their upcoming technologies for safety. The pact will allow the US AI Safety Institute to receive early access to major new AI models to evaluate their capabilities and risks, as well as work together to address potential issues. The news comes as money continues to pour into AI: Apple and Nvidia are reportedly in talks to invest in OpenAI, a new fundraising round that would value the maker of ChatGPT at above $100 billion. Fortune weighed in on why OpenAI needs more money and what’s in it for investors.

The AI boom creates opportunities—and fear—for the $38B outsourcing industry. Bloomberg has published a big feature about AI’s impact on the outsourcing industry, which is undergoing big changes as copilots and other tools are deployed to make it easier for call center staffers to answer customer questions. The new systems, which can remove workloads from human workers and delegate cases to the machines, including AI-enabled chatbots, are raising questions about how AI will impact future job prospects and the current business models for the industry, which is forecast to generate $38 billion in revenue this year. Frequently in this newsletter, CIOs have shared that AI investments in customer support are among the most popular use cases they are pursuing to save costs and boost productivity.

ADOPTION CURVE

AI leaders home in on data-related concerns. Deloitte’s quarterly survey on AI showed that 55% of organizations say they are avoiding certain generative AI use cases due to data-related issues. The concerns that organizations were most worried about included using sensitive data in models and managing data-privacy related issues (both at 58%), followed by managing data-security related issues (57%). Companies were less worried about complying with AI regulations and the use of their own proprietary data in AI models.

Some top ways that companies are looking to address data deficiencies include enhancing their data security, improving data quality practices, and updating their data governance frameworks. The survey included the perspectives of 2,770 AI business and tech leaders directly involved in piloting or implementing generative AI at major companies across 14 countries.

JOBS RADAR

Hiring:

– Intuit is seeking a director of Sarbanes-Oxley IT compliance, based in New York City. Posted salary range: $232.5K-$316.5K/year.

– Samsung Electronics America is seeking an IT director, based in New York City. Posted salary range: $210K-$245K/year.

– Leidos is seeking a navy division CTO, based in Reston, Virginia. Posted salary range: $144.3K-$260.8K/year.

Hired:

– Shopify appointed Mikhail Parakhin as CTO, joining the commerce platform from Microsoft, where he previously led the Bing search engine and advertising businesses. Parakhin left Microsoft earlier this year, Bloomberg reported at the time, after the software giant tapped Mustafa Suleyman to oversee consumer AI work and asked Parakhin to report to him.

– Navistar announced the appointment of Robert Oh as chief digital and information officer, effective September 16. Most recently, Oh served as an SVP and a chief operating officer at South Korean conglomerate Doosan Group.

– LinkedIn announced Lea Kissner joined the social network as chief information security officer. Kissner previously held the CISO title at Lacework and X. And prior to that, as a director of engineering at Apple.

– PulteGroup appointed Mike Guhl as SVP and chief information officer, effective August 19, and replacing current CIO Joe Drouin, who will retire effective October 1. Guhl joins the homebuilding company from HD Supply, where he has served as CIO since 2020.

– Choice Financial Group named Andrew Fritzinger as CTO, joining the insurance agency from Progressive’s Protective Insurance business, where he also served as CTO and played a key role in modernizing and consolidating insurance systems.

– Altais appointed Dr. Kumar Murukurthy as chief information and digital officer, joining the healthcare services company’s executive team and reporting to President and CEO Dr. Nishant Anand. Murukurthy joins Altais from Walmart Health and Wellness, where he most recently held the position of CIO.

– Bionema named Stephen Ford as CTO, where he will drive the biotechnology firm’s tech vision and establish a center of excellence in biocontrol in Wales, leading 10 scientists and researchers.