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FanDuel Passed On Buying Barstool Sports Before Penn National, Portnoy Says

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FanDuel Passed On Buying Barstool Sports Before Penn National, Portnoy Says

Barstool Sports founder Dave Portnoy said on a recent podcast that his company could have been purchased by someone other than Penn National Gaming.

What Happened: Portnoy revealed on the "Pomp" podcast with Anthony Pompliano last week that Barstool promoted itself to other betting companies before Penn National Gaming (NASDAQ: PENN).

This list includes FanDuel, owned by Flutter Entertainment (OTC: PDYPY); DraftKings Inc (NASDAQ: DKNG); and Points Bet, he said. 

“FanDuel specifically could have gotten us for far cheaper than Penn did,” Portnoy said. “I think [other operator] were too scared of controversy and me.”

Portnoy said he was surprised FanDuel would not sign a deal. 

"These guys we were doing business with — who I liked — they’re not going to make an offer?" he said. 

"You f------ idiots. And they’ve probably had to spend more on talent if they had just bought us.”

FanDuel “missed the boat” when it came to a deal, the Barstool personality said. 

Penn National purchased a 36% stake in Barstool Sports for $163 million in cash and stock.

Future Partnerships Not Ruled Out: Portnoy refused to rule out a partnership between Penn National and a daily fantasy sports company in the future.

“I think there’ll be consolidation in the market. If you combine FanDuel or DraftKings with us, that’s the end of the market,” he said.

“We combine with one of those companies and the other is dead. I like that position and it could happen down the road.”

Any deal depends on how much money Portnoy would receive and who has control, he said. 

Success Of Barstool Sportsbook: The Barstool Sportsbook App was the No. 1 sports betting and sports app during its launch in Pennsylvania.

Over 24,000 registered users placed bets in Pennsylvania and Barstool Sportsbook was downloaded by more than 180,000 people nationally after its Pennsylvania launch on Sept. 18. 

The success led Penn National Gaming to release a new presentation this week on boosting its omnichannel strategy.

The company is accelerating plans to covert all retail sportsbooks to the Barstool Sportsbook brand to attract new demographics. There are four currently under construction, and the rest will be converted by the end of 2021, according to Penn National. 

Penn National highlighted that it spent zero on external marketing. This was a point highlighted by Portnoy as the difference made by Barstool’s loyal built-in fan base treating the brand like a team.

The company will have to spend less on advertising and customer acquisition, he said. 

Penn National highlighted Colorado, Illinois, Indiana, Michigan, New Jersey, Virginia and West Virginia as future markets. 

Penn National now believes it can hit 13% market share in the sports betting/iGaming market by 2025 and is forecasting revenue of $3.2 billion in this segment by 2025.

PENN Price Action: Shares of Penn National gained 4.74% in Wednesday's session, closing at $72.70. 

Courtesy photo. 

 

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