The upcoming launch for Penn National‘s Barstool Sportsbook app will begin in Pennsylvania, with more states expected by the first quarter of 2021.
That’s according to the company’s second-quarter earnings release, which saw Penn lose $79.3 million in adjusted EBITDA during the second quarter. The regional casino operator was hit hard by the coronavirus pandemic with revenue of $305.5 million, down 76.9% from last year.
The Barstool Sportsbook app is scheduled for a Pennsylvania sports betting launch in September after originally planning for August. Penn made significant progress on the app over the last few months, CEO Jay Snowden said.
“We have already seen very high levels of interest in the Barstool Sportsbook app from the Barstool audience as well as on a wide range of social media platforms, and we are extremely excited about Barstool’s plans to introduce the app to their growing and loyal audience,” Snowden added.
Why wait to launch Barstool Sportsbook?
Penn National wants to make sure its first impression with Barstool Sportsbook is a great one. That’s why the company waited instead of launching earlier this year, when it wouldn’t have been competitive, Snowden said.
“What’s more important? Rushing it and getting to some MLB and NBA games in August? Or doing this right, launching it in September when we know it will deliver a great experience, [user interface, user experience] for the end user?” Snowden said. “We’re in this for the long game.”
Snowden said Penn National is bullish about how the Barstool Sportsbook app will compare to competitors. He noted the intuitiveness of the app, its traveling wallet and betslip experience, and exclusive betting options including Barstool personalities that he feels should give the app an edge over competitors.
That being said, Snowden acknowledged it would be great to be live right now. Penn National’s retail sportsbooks saw handle jump 60% last Saturday and Sunday over the prior year.
Penn National planning more launches
Pennsylvania is the first state for Barstool Sportsbook since Penn National is already live with online casino there. Penn appears to be focusing on that cross-selling ability as it rolls the app out.
Snowden didn’t give any definitives when it came to the next launch state after Pennsylvania. But he did note Penn is “very focused” on Michigan, which could launch online sportsbooks and casinos in the fourth quarter.
New Jersey, where Penn can launch both sportsbook and casino online, is also high on the list, he said.
Barstool Sportsbook, iGaming big opportunity for Penn
Penn National sees big opportunities in the Penn Interactive segment, especially with social distancing keeping many from land-based casinos.
Its real-money online casino in Pennsylvania grew revenue 108% in the second quarter over the first. Penn National achieved more than 10% of PA iGaming market share while maintaining strong EBITDA margins, Snowden said.
Penn’s ability to convert its retail database, along with the Barstool partnership, should lead to significant organic customer acquisition and cross-sell opportunities, he added.
“As a result, we believe the company is poised to capture an outsized share of the high growth U.S. sports betting and online casino markets and achieve market-leading profitability,” Snowden said.
Can Penn compete without spending big cash?
It’s unknown what Penn’s marketing budget will look like to grab sports betting customers. But the company might not have as loose a leash as some of its other sports betting-focused competitors.
Penn National reported $1.2 billion in cash and equivalents at the end of the second quarter. That’s overshadowed by its $3.1 billion in total debt.
Meanwhile, BetMGM, BetRivers, DraftKings and FanDuel–Fox Bet parent Flutter have all raised cash recently to attack the US sports betting market.
Penn expects to convert 5% of Barstool’s 66 million fans and about 25%, or 5 million, of its mychoice loyalty members into online gamblers.
Another step in customer acquisition for the Barstool Sportsbook went live earlier this week in PlayBarstool.
The app, powered by Boom Sports, offers free-to-play contests right now. Those include choosing the winner of Jenga and ping-pong games played by Barstool Sports personalities.
PlayBarstool feels like what Penn’s promised out of the Barstool Sportsbook app with links to content on Barstool Sports. The app also includes a banner for players to get emails when Barstool Sportsbook launches in their states.