A gaming company is making a major investment in a media company all as part of a push to capitalize on the huge popularity and future projected growth of sports betting in the United States. Penn National Gaming Inc. announce recently it will invest $163 million into Barstool Sports. The deal will value Barstool sports at $450 million. Penn National will initially gain a 36% share in Barstool, which will increase to 50% in three years after it invests another $62 million. Once that day arrives, Penn National will also have the choice to buy out Barstool Sports completely if it wishes. The deal also makes Penn National the exclusive gaming partner for Barstool Sports for as many as 40 years, giving them the sole right to use Barstool’s brand on all its online sports betting, retail sports betting and iGaming products. So sports betting is more than a trend and if you want to experience it take a look at the site below.
Ever since the U.S. Supreme Court overturned a federal ban on sports betting in the United States in May 2018, the industry has been expanding and exploding. More states seem to legalize sports betting in some form or another every day, with states such as New Jersey leading the way to compete with the long-standing presence of Nevada.
In September 2019, Barstool Sports capitalized on the popularity, launching Barstool Bets. It’s a site that offers free games as well as online personalities, attracting people to bet on live games through their phones.
This acquisition allows Penn National to increase its market share and also its visibility with a well-known name like Barstool Sports. Penn National operates a number of casinos and resorts that, in total, feature 1,300 table games, 8,800 hotel rooms and 50,500 gaming machines.
Following the announcement of this deal, the company’s stock increased in value by 13%, to $29.60. This brought Penn National’s total market capitalization up to $3.4 billion. Want to get in on the sports betting action yourself? Check out the sportsbook below.
Barstool Sports was founded back in 2003 by Dave Portnoy. It was once just a newspaper, but now it attracts 66 million unique visitors to its site every month, and most of them are between the ages of 21 and 44.
As Jay Snowden, the CEO of Penn National, said: “Many media companies are not very sticky with their viewers, but Barstool has managed to build a loyal following, with content, brands and events.”
The Barstool brand got so big and well-known that it was able to enter the fray on sports gambling, something many media companies have shied away from. However, Barstool’s key demographic is also the age range of people who are most interested in betting on sports in the United States — and beyond.
Through this deal with Penn National, The Chernin Group will reduce its ownership in Barstool Sports from 60% to 36%. What’s left (28%) will be held by employees of Barstool Sports.
This deal is one of many that is likely to come between gaming companies and media companies, as both industries seek to gain a share of the very lucrative sports betting market in the United States. The sports betting market is strong in Canada, too, despite single-game sports gambling not being legal yet. Find out for yourself by visiting one of the online sportsbooks below.
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