Penn National Gaming’s Barstool Sports brand seems to have shrugged off the devastating impacts of COVID-19 in 2020 and is upbeat heading into 2021. Despite a net loss of $669 million in 2020, there was no shortage of positive signs for Penn National or optimism from their management team about Barstool Sportsbook heading deeper into this year.
Penn’s interactive division experienced massive growth during 2020, with strong revenues and EBITDA margins for the Hollywood Casino iCasino product in Pennsylvania, robust performance at the company’s 16 retail sportsbooks, and the introduction of the Barstool Sportsbook mobile app. Penn National Gaming Stands Strong Despite Covid-19 Turmoil. Penn National Gaming's Barstool Sports brand seems to have shrugged off the devastating impacts of COVID-19 in 2020.
It was just over a year ago that Penn National purchased a 36% interest in Barstool Sports and married two Heavyweight brands in the sports industry. Since then, Barstool has become an important and successful entity in their existing states, Pennsylvania and Michigan with an eye on rapid expansion in the next 12 months.
Penn National Misses Estimates… but Not Because of Barstool
Penn National last weeks, came out with its financials for Quarter 4 and not-all-that-surprisingly, it missed estimates albeit slightly. Q4 total revenues came in at $1.03 billion, off of the $1.09 billion estimate before commencement of the quarter.
The main reason for Penn National’s struggle to hit estimates comes as no surprise either. COVID-19 forced closures of their Illinois, Michigan and Pennsylvania retail locations, which obviously affected the company’s bottom line. Penn revenues had been trending in the right direction ahead of the coronavirus shutdowns.
Along Comes Barstool
There wasn’t much doubt about the impact that a Barstool Sportsbook would have on the industry when the media brand crossed over into the legal betting space. Barstool boasts 66 million dedicated viewers as well as 52 million Instagram followers, over 26 million followers on TikTok almost 5 million on Facebook, and 27 million on Twitter nationally. Their reach is massive.
The first state in which they launched, Pennsylvania saw the sportsbook downloaded 72,000 times with approximately $300 million in bets with limited marketing. In their second market-launch, Barstool Sportsbook was downloaded by 48,000 new customers in Michigan and saw $27.5 million in betting handle in the first 10 days and reported net earnings of $12.7 million in Q4.
Singing the praises of their new brand, Penn National CEO Jay Snowden said in a statement: “We view Barstool Sports not only as a fantastic channel to promote our offerings, but also an undervalued media asset that has evolved from primarily a sports brand into a highly relevant sports and life-style brand,”.
Customer Acquisition Perks
The Barstool sportsbook was expected to benefit from the media brand’s 66 million dedicated monthly viewers. The betting brand’s attempts to flip a portion of those users, mostly younger, to online sportsbook customers has so far gone very well… and has done so cheaper than other participating sportsbooks.
The average customer acquisition cost for sportsbooks is said to range anywhere from $300 to $800. Barstool’s costs have bested those averages. In fact, Barstool’s costs are estimated to be just under $200 per customer.
In an investors’ call this week, Penn CEO Jay Snowden went on record saying: “For Penn, so far from the first four months in PA, despite all of the Barstool Fund matching that we’ve done as well as in Michigan in our first month, we are well below the bottom end of that range. We have so much room, we have so much cushion to be opportunistic and figure out what we want to do and how we want to do it.”
Where Do They Go From Here?
Penn expects the Barstool Sportsbook to be live in 10 states by the end of 2021. Indiana, New Jersey, Colorado, Virginia, West Virginia, Iowa and Tennessee are some of the states on the brand’s radar. The brand hopes to add a new jurisdiction every 3-5 weeks this year.
Illinois, one of the most exciting new markets in the US scene looks to be first in line to gain a Barstool Sportsbook. The Chicago-area market is Barstool Sports’ second-largest market in the country, giving the company an immediate leg-up before going live. The goal for Penn National is to have something in place in Illinois by March Madness, which is approaching quickly,
Maryland looks to be in Barstool’s immediate future as well. In mid-December, Penn National announced an agreement with Gaming and Leisure Properties to acquire Hollywood Casino Perryville with the plan to have the Barstool betting brand live some time this year.
Hopes Becoming Reality?
Barstool Sportsbook launched with an ideal to become a true Heavyweight in the US legal sports betting scene and those desires haven’t gone away. In fact, hope seems to be becoming reality for the brand.
Jay Snowden backed up his company’s desires last week when he said: “What I think you should assume is that we are going to be top three, we said that before we ever launched and we’re delivering on that. We’re going to be profitable faster than anyone else, and we’re delivering on that and continue to deliver on that pledge, again, faster than anybody else.”
“And as we scale, we just end up with a lot more dry powder to be more aggressive in the areas of widening that funnel and customer acquisition that we believe is driving the best return.”
Penn National Gaming Partnering With Barstool Sports to Raise Money for Pennsylvania Small Businesses This Weekend
Penn National Gaming, Inc. (“Penn National” or the “Company”) announced today that the Company’s two Pennsylvania casinos, Hollywood Casino at Penn National Race Course (“Hollywood Casino”) and The Meadows Racetrack and Casino (“The Meadows”), are partnering with Barstool Sports on a promotion this weekend to raise money for Pennsylvania small businesses impacted by the COVID-19 pandemic.
The fundraiser will begin at 8:00am on Saturday, January 9 and conclude at 11:59pm on Sunday, January 10. Visitors to the retail sportsbook at Hollywood Casino or the Meadows will have their first-time rated wager matched by the casinos with a donation to The Barstool Fund. In addition, Pennsylvania residents will have their first-time deposit on the Barstool Sportsbook App matched with a donation to The Barstool Fund provided they wager equal or more than their first-time deposit during the weekend.
Earlier this week, Penn National donated $1 million to the cause, which to date has raised over $20 million from more than 155,000 supporters.
“We are very proud to support our partners at Barstool Sports and look forward to helping local small businesses in and around Dauphin County,” said Dan Ihm, Vice President and General Manager at Hollywood Casino.
“It’s amazing what Dave Portnoy and his team have done so far,” said Tony Frabbiele, Vice President and General Manager at The Meadows. “We wanted to localize the support here in Washington County and decided we can make it fun for our players to be part of the fundraising.”
Any small business owners in need of help due to the impact of the pandemic on their business and employees are encouraged to apply for support at TheBarstoolFund.com/apply.
Penn Gaming And Barstool
About Penn National Gaming
With the nation's largest and most diversified regional gaming footprint, including 41 properties across 19 states, Penn National continues to evolve into a highly innovative omni-channel provider of retail and online gaming, live racing and sports betting entertainment. The Company's properties feature approximately 50,000 gaming machines, 1,300 table games and 8,800 hotel rooms, and operate under various well-known brands, including Hollywood, Ameristar, and L'Auberge. Our wholly-owned interactive division, Penn Interactive, operates retail sports betting across the Company's portfolio, as well online social casino, bingo, and iCasino products. In February 2020, Penn National entered into a strategic partnership with Barstool Sports, whereby Barstool is exclusively promoting the Company's land-based and online casinos and sports betting products, including the Barstool Sportsbook mobile app, to its national audience. The Company's omni-channel approach is bolstered by the myChoice loyalty program, which rewards and recognizes its over 20 million members for their loyalty to both retail and online gaming and sports betting products with the most dynamic set of offers, experiences, and service levels in the industry.
About Hollywood Casino at Penn National Race Course
Penn National Gaming Barstool Sports
Located near Harrisburg PA, Hollywood Casino at Penn National Race is a mychoice destination property that features a variety of entertainment options including slots, tables games, hybrid games, live thoroughbred and simulcast racing and an array of casual and fine dining options.
About The Meadows Racetrack and Casino
Barstool And Penn
Pointsbet app android. Located near Pittsburgh PA, The Meadows Casino Racetrack and Hotel is a mychoice destination property that features a variety of entertainment options including slots, tables games, hybrid games, live harness and simulcast racing and an array of casual and fine dining options.
Penn National Gaming Locations
MEDIA CONTACTS
Penn National Gaming, Inc.
Eric Schippers, Sr. Vice President – Public Affairs | 610-373-2400
Hollywood Casino at Penn National Race Course
Christine Parker, Director of Marketing | 717-469-3278 | Christine.Parker2@pngaming.com
The Meadows Racetrack and Casino
Samantha Maskrey, Marketing Manager | 724-503-1561 | Samantha.Maskrey@pngaming.com
Penn National Gaming Acquires Barstool
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