The business, which changed its name to Penn Entertainment in August 2022, is assuming the total ownership of one of its key sportsbooks.
The sports betting market in the US is booming, and according to iGaming PA, Barstool Sports is one of the most prominent online sportsbooks in Pennsylvania, while the Barstool Casino is one of those operators that offer online casino no deposit bonuses. And it seems like their future is about to change.
Penn Entertainment stated that it had used its call rights to acquire 100% of Barstool Sports in an SEC filing. In 2020, Penn paid $163 million for a 36% stake in Barstool; more recently, Penn invested $62 million to acquire a 50% stake.
By the time Penn completes the remaining share purchases by February of 2023, Barstool Sports will have cost them almost $550 million. The transaction, according to the Q2 Penn investor call that was held in August, will be able to fulfill Barstool’s potential.
Penn’s Initial Investment
The company’s original investment in Barstool was made to save marketing expenses for a sportsbook with the Barstool name. Barstool has a huge and dedicated player base that enjoys its wide variety of games and services.
Penn believed it could forgo aggressive marketing spending because of people like founder Big Cat and Dave Portnoy, presenter of “Pardon My Take,” one of the biggest podcasts in the US. While some businesses spend quite a bit on client acquisition, Barstool wants to reach its core audience organically.
Penn reported that its interactive business could be profitable in the fourth quarter even though the sportsbook has only gained a small market share, roughly 6%, as reported by the operator. In August, Portnoy stated to Fox Business that Penn investments make up the majority of his personal worth and that he is still optimistic about the company’s spot in the sports betting market.
According to Portnoy, the Penn stock has been trading virtually lockstep with the other gaming stocks for more than a year at this point. They don’t function the same as the other companies. They burn money and lose hundreds of millions of dollars while spending billions on advertising.
Barstool Isn’t the Only Recent Acquisition of Penn
Penn purchased theScore, a sports media firm located in Canada, for $2 billion in 2021. At the time, Penn mentioned the possibility of cutting costs by fusing the strengths of theScore and Barstool.
TheScore Bet and its internal trading platform were also acquired by Penn alongside one of the most well-known sports applications in NA. By Q3 2023, the business intends to have the Barstool Sportsbook app on the IT stack.
Penn closed theScore Bet in the US in July 2022 and decided to concentrate on sports betting in Ontario while using Barstool for US sports betting.
Barstool’s Presence in the Market
In Q2, Penn stated that $179.3 million in bets were placed at its 24 Barstool retail sportsbooks throughout ten US states. According to an investor presentation, the sportsbooks kept a 19% retail market share in H1, these figures don’t include Nevada into account.
The Barstool Sportsbook over at Greektown Casino had 51% of the retail handle of three Detroit casinos in July 2022.
In the company’s second-quarter earnings call, The Barstool retail sportsbooks, according to Jay Snowden, the CEO of Penn, have a strong appeal to younger consumers and provide great opportunities for cross-selling. By providing exciting and pertinent content, Barstool Sports, Inc. has further increased its presence across its social media channels.