Online sports betting is big business and many companies make deals with each other in the industry. For example, the casual online gambler may not know online gambling brands including Betfair, FanDuel, Paddy Power, and PokerStars are all owned by the same company, Entain. FanDuel and PokerStars are two completely different online gambling brands yet they are owned by Flutter Entertainment.
Barstool Sportsbook is a further example of a gambling brand that has been fully acquired by another company. Read on as we look more closely at what happened and how the deal went down.
History of Barstool Sports
Barstool Sports started as a sports magazine which was available in the Boston metropolitan area. It offered fantasy sports fans advice and included gambling advertisements within its pages. Having launched online in 2007, Barstool Sports expanded to include other topics and the popularity of the website started to grow. By 2014, AOL was offering live content from Barstool Sports and as so many people were visiting the website, it attracted the attention of Chernin Group.
Founder, David Portnoy sold a majority stake (51%) of Barstool Sports to the group and the headquarters was moved to New York. Portnoy still had control of the website and most of the content and in 2020, Penn Entertainment took over the stake held by Chernin and professional players were signed up to offer the views on sport, including former NFL player Pat McAfee and NBA player Frank Kaminsky.
In September 2020, the company launched Barstool Sportsbook, an online sports betting platform, in Pennsylvania. Having enjoyed $11 million in wagers in the first week of launch, Barstool Sportsbook expanded to the state of Michigan and the app is now available in several states across the country, including Indiana, Colorado, New Jersey, Tennessee, Arizona, Iowa, West Virginia, Louisiana, Ohio, and Maryland.
Full Sale to Penn Entertainment
In February 2023, Penn Entertainment paid $388 million for the remaining stake in Barstool Sports, becoming the sole owner of the company. However, some of Barstool Sports personalities had been causing an issue when trying to obtain permits for sports betting in some states. The main issue was the possibility those who were offering betting advice on Barstool Sports were also having wagers using the Penn-owned Barstool Sportsbook.
Portnoy is not one to hold back and has interviewed Donald Trump, appeared on Fox News, praised the sale of Twitter to Elon Musk, and discussed the idea of moving to Florida because it is far more tax friendly. Articles were published relating to the sex life of Portnoy and it is claimed they were released to coincide with Penn National Gaming’s quarterly earnings announcements. Following the release of the article, the value of Penn National Gaming’s stock went down.
Future of the Sportsbook
For a business to grow, such as Barstool Sportsbook, the less controversy surrounding the brand, the better. The online sports betting market is growing rapidly in the United States and competition is fierce. Many people want to find a sportsbook that has the best odds and that is key, along with other factors considered by punters, including promotions and advertising campaigns. An online sportsbook must compete with rival brands for market share and while the Barstool Sportsbook is linked to the main Barstool Sports website, that is not going to be enough to drive the number of people required to the sportsbook to make it a success for Penn Entertainment.
Analysts have forecast Barstool Sportsbook will spend more on marketing throughout 2023, especially prior to the new NFL season. The hope is the new marketing campaign will drive more people to bet on NFL games using Barstool Sportsbook, with television advertising and promotions via social media. However, the basics of offering competitive odds and bonuses is what will keep punters away from other betting brands.