Analysis: What Will Penn National Investors Think About Barstool Sportsbook Numbers?

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Barstool Sportsbook

Two recent user-related figures from Penn National that affect its Barstool Sportsbook brand might concern investors.

Penn National submitted testimony this month in Maine concerning its proposed sports betting legislation.

It reads much like submitted testimony in just about any state from any sportsbook, but this submission included a few interesting figures.

What’s in a number?

The testimony from Jeff Morris, VP of public affairs and government relations for Penn, specifically calls out more than 72,000 users registered with Barstool Sportsbook in Pennsylvania since its launch last September.

Another notable figure is the 54 million monthly unique visitors the brand calls “Stoolies.” That includes the unique visitors across its website and app, social media, podcasts and video content, as explained in Penn’s presentation when it first bought its 36% stake in Barstool Sports.

At the time of that acquisition last January, that Stoolie total was 66 million. Penn still references the 66 million figure in its company profile.

Barstool Sportsbook
Source: Penn National Gaming

Stoolie decline not actually a decline?

A company spokesperson who responded to questions created some confusion.

Penn and Barstool Sports seem to be proud of the fact they do not market externally a lot and instead focus on the organic conversion of its Stoolies as the brand launches throughout the country. So if that fanbase were to fall by 22.2%, alarm could be warranted.

Whether it did or not is still not clear. The company spokesman gave multiple answers in an email exchange:

“It’s actually over 100 million monthly actives now and we have said that publicly.”

“You can continue to go with 66M monthly unique.”

“Not sure why that old estimate, which does obviously fluctuate from month to month, was used in that testimony.”

The testimony is not the first time the 54 million number was quoted by Penn. It was used in a March 17 press release concerning its license in Virginia under the “about Barstool Sports” section.

Barstool Sportsbook registrations sluggish

The 72,000 registrations since September feel a bit low considering the brand’s hot start.

Penn National reported 48,000 registrations as of Oct. 24 during its third-quarter earnings call. That means Barstool Sportsbook had 24,000 registrations since then.

That number would look questionable over any six-month period for a sportsbook looking to crack the top three operators nationally. Considering that stretch included the NFL Playoffs, Super Bowl and March Madness – all events that see customer registrations spike – those numbers look worse.

Given the registration only tracks people that sign up for an account and not who wagers, it could explain why Barstool Sportsbook remains third in the PA sports betting market and might not hit levels once expected nationwide.

Pennsylvania’s total handle jumped 10% from February to March, with No. 1 operator FanDuel Sportsbook and second-place DraftKings Sportsbook both growing handle. Barstool Sportsbook handle fell $2 million, which meant a 1.6 percentage point drop in handle share to 11.6% for the month.

How does Barstool Sportsbook compare to others?

A lot of operators do not provide that much detail with their key performance indicators, so there is no apples-to-apples way to compare those numbers. FanDuel Sportsbook added 900,000 customers throughout the US in the first quarter alone. PointsBet, meanwhile, reported 127,470 active US users during the 12-month period ending March 31, up from 68,094 for the 12 months ending Dec. 31.

DraftKings Sportsbook noted its monthly unique players in its B2C segment – which includes sports betting, daily fantasy sports and iGaming – rose 114% in the first quarter to an average of 1.5 million unique paying customers each month.

Those numbers need a caveat, though, especially in comparison to the Barstool registrations.

Both FanDuel and PointsBet’s numbers include their total US operations which included launches in new and ramping states. Barstool, meanwhile, launched into a fairly mature market when it went live in Pennsylvania last September.

Plenty bullish on Penn, Barstool

Penn stock is on a bit of a slide in the last month and a half. The stock hit a 52-week closing high March 15 at $136.47. It closed Friday at $89.12, down 34.7% from that closing high.

According to more than a few analysts, that means it is time to buy.

Eight of the 12 analysts compiled by Nasdaq have buy ratings on Penn. Recently joining the bullish voices on Penn is Bernie McTernan at Needham, who initiated with a $151 price target and buy rating.

Why some analysts say buy

Barstool has the potential to become the leading sports betting media company in the US, McTernan said. Its interaction with Stoolies on social media will help with online sports betting gains with McTernan assuming Penn can reach a 15% market share.

That depends on keeping those Stoolies, though.

“Barstool is PENN’s customer acquisition strategy; as such, PENN spends significantly less than peers on external marketing,” McTernan said in his note.