We finally know where Barstool Sportsbook plans to make its next move: the online Michigan sports betting market.
Penn National CEO Jay Snowden shared the plans in a wide-ranging interview with Fantini Research CEO Frank Fantini. Fantini Research is a subscription-only newsletter for gaming investors and insiders and publishes its CEO One-on-One series around G2E every year.
Michigan will be only the second state for the Barstool Sportsbook brand after launching in Pennsylvania last month. This launch is different, though, since the app will launch with everyone else instead of entering market that’s more than a year old. A retail sportsbook will also open before the end of the year.
“I think it’s going to really be a nice proof point to show maybe what many other states will look like when we’ve had the appropriate time to play catch up,” Snowden said in the video interview.
Sports betting in Michigan launched right as the coronavirus pandemic hit in March. Online sports betting is expected to launch in mid to late November, Snowden said. Online casino will follow shortly after when allowed.
Snowden predicts the Barstool Sportsbook app will be live in 12 states by the end of 2021, including online casino where legal.
No more Barstool Sportsbook launches this year
According to Snowden, Michigan will be the only other state where Barstool Sportsbook launches in 2020.
That’s a bit surprising given the other states recently listed in an investor presentation where Penn plans to launch next:
- New Jersey
- West Virginia
All but Virginia sports betting is live, which means Penn is missing out on the valuable acquisition period that is NFL betting season in at least five states. Penn previously mentioned launching multiple states through the first quarter. That suggests March Madness might be a bigger inflection point for the app than the Super Bowl.
Another glaring omission is there’s still no mention of sports betting in Tennessee. There’s no limit on sports betting licenses in Tennessee — which will have online-only betting — but it also has a required 10% hold, the first of its kind in the US. (Hold for sportsbooks is typically below that threshold for most US sportsbooks.)
That’s another missed market this year since Tennessee launches Nov. 1.
Barstool Sportsbook growing the PA market
Snowden couldn’t say much on Barstool’s performance in Pennsylvania since its earnings call is in two weeks. So far, though, the brand has had great momentum, he said.
Penn previously announced record download rates in its first weekend with $11 million in handle over the first weekend and $12.5 million over the second weekend.
Snowden pointed to the loyalty of Barstool fans and suggested they’re bringing new business to the PA sports betting market.
“We think we’re largely growing the market, which is very important, as opposed to just stealing share,” he said. “That Barstool audience is very loyal. So we’ve been growing the market, from what we can see and what the data is telling us.”
Snowden also noted the user experience and retention rates have been great so far.
More business opportunities with Barstool
Penn National is looking way beyond gaming when it comes to potential ventures with the Barstool brand, Snowden explained.
He talks with Barstool Sports CEO Erika Nardini and founder Dave Portnoy “every day, it feels like,” about other business opportunities.
“When Dave and Erika, and Dan [Katz] and everyone at Barstool get behind something, like they’re behind the Barstool Sportsbook right now, you can envision a lot of doors opening up and potentially some adjacencies that we could invest in that we’re not even in the business of today,” Snowden said.
“Standalone restaurants and bars, maybe nightclubs, there’s so many things that we can do on the digital side and maybe around food and beverage products and bar offerings, things of that nature.”
The 36% stake in Barstool Sports also changed the way Snowden and Penn National are thinking about mergers and acquisitions moving forward.
“If we’re being aggressive and offensive with regard to M&A, it’s probably because we’re doing something that not only gets us access to brick and mortar and a database but also some digital opportunities around sports betting and online casino in states where we’re not in today.”
Smidge of hypocrisy on problem gambling concerns
One of the non-Barstool questions asked was about slot routes, which essentially allows slot machines in bars and convenience stores. The business model is legal in multiple states and can eat pretty significantly into casino revenue as has been the case in Illinois.
Snowden clutched his pearls at the “very troubling” idea of problem gambling not being correctly addressed in these establishments.
“There are zero responsible gaming protections in those bars and taverns other than a bartender who’s never worked in gaming their life,” he said.
That’s just a bit hypocritical coming from the CEO of a company that’s done some questionable things since the Barstool Sportsbook app launched.
The Barstool Sportsbook Instagram account recently posted a photo of a child asking the Boston Celtics to cover -3.5 points. Another Twitter user grabbed a screenshot of a Barstool show that included a gigantic cup stating “You can only lose if you quit.”
And, of course, Portnoy has been flashing his own five-figure bets across Twitter, though that became less flagrant over the weekend. Maybe that’s because it’s still unclear if Portnoy should be allowed to bet on the app at all.