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The first Barstool Sportsbook could be coming to West Virginia early this year, the Head of Penn Interactive Jon Kaplowitz told Legal Sports Report.
Publicly traded Penn National announced it bought a 36% stake in the media company Barstool Sports this morning. It’s planning to move quickly in the upcoming months to get the brand rollout started.
Penn’s Hollywood Casino at Charles Town is a good target to rebrand its WV sports betting shop early this year, Kaplowitz said. Another crucial retail focus will be Michigan as Penn has one of the three commercial casinos in the Detroit area.
Penn currently has 14 retail sportsbooks across the country. That total will be closer to 20 by the end of the year, Kaplowitz said.
Where Penn decides to roll out its Barstool-branded mobile app will depend on where it can get the best “bang for its buck,” Kaplowitz said.
The internally designed sportsbook app, powered by Kambi, will launch in August before the NFL betting season. Some states being considered are Michigan, Illinois and Colorado, he added.
But it really comes down to a bunch of ingredients, Kaplowitz explained. Those include where Barstool’s 66 million monthly unique users are located, how quickly regulators move, and the rules for those states such as whether in-person registration is a requirement.
Penn National CEO Jay Snowden mentioned the company expects to get top-three market share in every state it enters. That will take longer to establish in the states that are already operating, he added.
The faithfulness of Barstool Sports fans, also known as “Stoolies,” is a key part of this agreement.
“One of the reasons we chose Barstool is because of their loyal fans,” Kaplowitz said. “… The fact that they are so loyal will be a huge differentiator for us to convince people to come to the Barstool Sportsbook.”
Barstool will also create organic content to give its users reasons to use the Barstool Sportsbook. How betting will be integrated into the current Barstool Sports app is still part of the ongoing discussions with the Barstool team, he added.
Kaplowitz also mentioned William Hill‘s strategy of using brand ambassadors in New Jersey to help capture market share.
Penn National is not revoking any of the market-access agreements it signed last year with The Stars Group‘s Fox Bet, theScore Bet, DraftKings or PointsBet. It doesn’t have to, of course, as the company kept its primary sports betting license in every state.
Instead, Penn will be profiting off some of its competition in states that allow more than one online sports betting license.
“We think those skin deals, which are straight cash that drop to the bottom line, further fuel and fund our strategy,” Kaplowitz said.
Those agreements pay between 5% to 15% of net revenue on an industry average. Along with not paying those fees because of having properties in 19 states and much lower customer acquisition costs thanks to the Stoolies, Penn enjoys a lot of financial flexibility, he added.
That cash then can flow back into the app’s development or promotions.
The investor deck that accompanied Penn National’s conference call breaks down just how valuable these Stoolies could be.
Barstool Sports internal data suggests 62% of Stoolies bet on sports. Of those who gamble, 44% bet at least once a week.
About four in 10 of those gambling Stoolies have an average bet of more than $51.
Penn will likely stick with the Barstool brand for its sportsbooks moving forward, Kaplowitz said. That makes sense considering the agreement requires Barstool to exclusively promote Penn’s online- and land-based products for up to 40 years.
Barstool will also be worked into Penn’s online casino brands as well; however, it won’t be the only brand. Those online casinos will likely be designed with more table games and poker in mind, which fits the typical games that sports bettors enjoy.
Barstool-branded online casinos are still about a year away. The first will launch sometime in 2021, Kaplowitz said.