Penn Sports vs Barstool: An Explainer
Barstool is Back in the Betting Game
Well, that was fast. Just a few months after prevalent sports and lifestyle brand Barstool Sports was sold by owner Penn Entertainment — a major gambling company — back to founder Dave Portnoy, Barstool is headed back in the sports betting space.
To add another layer of drama and intrigue to the Penn Sports vs Barstool situation, DraftKings is reportedly set to enter into a major marketing partnership with Barstool Sports.
When Barstool was owned by Penn, Barstool had its own branded “Barstool Sportsbook” betting app on which fans could directly wager on games. Well-known Barstool personalities like Portnoy, Dan “Big Cat” Katz and PFT Commenter would also come up with specific boost bets and parlays that Barstool fans could follow along and bet with. Considering Barstool’s huge following among sports fans, the Barstool Sportsbook became one of the more prominent football betting sites on the market.
NEWS: @barstoolsports is getting back into sports betting. @stoolpresidente‘s company is in advanced talks with @DraftKings on a multi-year marketing deal.
Would be announced after Super Bowl (can’t be earlier, due to $PENN separation). Details 👇https://t.co/jHz9VXVkBI
— Eben Novy-Williams (@novy_williams) January 24, 2024
The Backstory
In theory, the partnership between Barstool and Penn seemed like a no-brainer as Penn looked to edge out more established online bookmakers like DraftKings and FanDuel. But, because of Portnoy’s propensity to make controversial public statements, Penn faced much regulatory backlash in states where it tried to get betting licenses.
As a subsidiary of a publicly traded company, Barstool — and its outspoken employees — was accountable to standards that didn’t exist when Portnoy owned the company outright.
Penn was so ready to get rid of Barstool that it essentially sold the company back to Portnoy for $1, taking a massive loss as a result.
Penn has since partnered with ESPN to re-brand Barstool Sportsbook as ESPN bet and, pursuant to Penn’s sale to Portnoy, Barstool is unable to open up its own book again and has to wait until after the Super Bowl to officially get back into official betting deals.
Barstool x DraftKings
By reportedly partnering with DraftKings, Barstool is taking the Penn Sports vs Barstool battle to a new level. While Penn isn’t exactly on the same level as DraftKings in the sports betting space, they are both competitors in the market.
So, DraftKings paying Barstool an annual amount thought to be in the low eight figures just to promote the DraftKings sportsbook on Barstool podcasts, articles, social media posts, and merchandise is pretty fascinating.
It should be a big coup for DraftKings in its fight to hold off FanDuel, ESPN Bet, Caesars and other newer entrants to the space. Barstool has tons of influence in the sports media landscape and has positioned itself as a leader in the market for sports betting adjacent content.
When Barstool produces live streams of its personalities watching big games, thousands of people tune in to watch. DraftKings is hoping that, while people watch those streams where the DraftKings sportsbook is promoted, those audiences will flock to their app to make bets.
It’s a good idea for one of the best sports gambling apps out there, and it comes at a relatively low cost, considering how popular Barstool is. Of course, it remains to be seen precisely how Barstool will incorporate DraftKings into content and if Barstool will promote it as much as it did its own internal sportsbook.
But it’s fair to say that DraftKings will eventually become synonymous with Barstool, which is precisely what DraftKings is looking for.
Effects on ESPN
How will this deal affect ESPN, which used to partner with DraftKings and now has its own branded sports betting app? It’s an interesting question and one that will shape how future betting deals between sports content providers and gaming companies will look.
Penn sold Barstool partly because the Barstool Sportsbook couldn’t compete with DraftKings or FanDuel regarding market share. That means ESPN Bet has a steep hill to climb.
Granted, ESPN’s reach is still far bigger than that of Barstool, and ESPN lends more legitimacy to Penn than Barstool ever did, so maybe Penn will win out in the Penn Sports vs Barstool battle.
On the other hand, DraftKings being able to harness the loyal Barstool fan base is critical. Bettors already using the Barstool Sportsbook or FanDuel (or another company) as their primary betting app might not immediately switch to DraftKings, but the appeal of being able to bet with Portnoy or Katz is enticing.
The next couple of months after the Super Bowl, once the reported Barstool/DraftKings partnership takes hold, will be critical. Betting volumes drop after the NFL season, so can Barstol keep the momentum up during the NHL and NBA playoffs and MLB regular season? It won’t be easy, that’s for sure.
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