Why an Aging Casino Company Embraced Barstool’s David Portnoy

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Regulators in 13 states have permitted Penn to offer Barstool-branded sports betting, with four states also allowing digital casino games. Penn also has introduced Barstool bars and sports-betting venues in 12 locations.

The results for Penn have been mixed. The Barstool betting app is the seventh-largest in the country by revenue, according to research firm Eilers & Krejcik Gaming. It commands about 3 percent of the sports-betting market, less than half of what analysts had projected.

Penn, which has said it will exercise its option to buy Barstool outright in February, remains committed. The new Barstool Sportsbooks inside Penn’s casinos have enticed younger gamblers to visit. Once inside, Penn executives say, they spend money on gambling, food and beverages — and often return.

Thanks at least in part to the Barstool deal, customers who are between 21 and 44 years old now account for about 20 percent of Penn’s revenue — a figure that nearly doubled over the past few years, Mr. Snowden told analysts this month. He said Barstool and Mr. Portnoy have proven to be “amazing partners for us.”

They have also at times engaged in what critics describe as problematic behavior, including ridiculing the concept of responsible gambling and trumpeting his five- and six-figure bets.

In a September 2021 Twitter post, for instance, Mr. Portnoy said, “First. Always bet responsibly. 2nd. Here is how you win a quick ¼ million,” alongside a photo of a bet slip showing a $19,000 wager he placed on the Barstool app.

Later that month, Barstool and Penn agreed to pay a total of $17,500 to Indiana regulators after Barstool posted a TikTok video in which a young woman minimized the consequences of losing money. The video violated Indiana’s laws governing deceptive marketing of gambling. (Penn, realizing the video was inappropriate, flagged it to regulators in multiple states, but only Indiana appears to have taken disciplinary action.)