On February 17, Penn Entertainment became sole owner of Barstool Sports, Its sports betting entity. But there are no plans to bring Barstool to Nevada. Penn blames the lack of remote sign-ups for sports betting as well as suitability of Barstool founder Dave Portnoy, according to the Nevada Independent.
Penn has properties in the state. The company operates Horseshu and Cactus Pete’s casinos in the Northeastern Nevada town of Jackpot as well as M. Resort in Las Vegas.
“There was little in the way of commentary around the retention of the key personalities or structure of the relationship post the closing of the Barstool transaction,” Deutsche Bank gaming analyst Carlo Santarelli said of the agreement. Penn will pay $388 million for 64 percent of Barstool. The firm bought 36 percent of Barstool in 2020 for $163 million.
Penn acquired Canadian sports betting operation theScore Media and Gaming for $2 billion in 2021 and said it will move Barstool to the company’s technology platform this year.
On the earnings call, Penn noted its interactive division, which includes Barstool, grew revenue 31 percent to $208 million with a first-ever quarterly profit of $5 million.
The fourth quarter revenue figure would have been more were It not for Barstool’s payment of $10.6 million to Houston gambler Jim “Mattress Mack” McIngvale. The furniture store magnate collected $75 million payout—the largest ever for U.S. legal sportsbooks —in the Houston Astros World Series win.
“We are anticipating a roughly $100 million swing in profitability in our interactive segment in 2023 as we are just beginning to scratch the surface of what we believe will be a tremendous long-term growth opportunity for us,” Penn CEO Jay Snowden said on the company’s conference call.
Stifel Financial gaming analyst Steve Wieczynski said Barstool lost market share in 2022 as a result of its reliance on third-party technology providers, which “hampered its ability to remain competitive.”
Penn put Barstool sportsbooks at Its four Ohio casinos on January 1 and a at its racetrack casino in Massachusetts.
Snowden said Penn operates 31 retail sportsbooks in 14 states with a market share of approximately 18 percent. That doesn’t include Nevada, where Caesars Entertainment-owned William Hill operates sports betting at the three Penn-operated casinos.
