Penn National Gaming is betting big on its newest partner, Barstool Sports.
Penn National announced it's taking a 36% stake in the digital sports media company for about $163 million in cash and convertible preferred stock.Penn will soon launch a Barstool Sportsbook brand in retail facilities and on its interactive mobile and online products.
The stake is a big play for the regional gaming company to expand its exposure in sports betting, which will reduce its marketing costs and the price of customer acquisition. Penn is hoping it lures younger gamblers into its retail and online offerings as well. Fans of Barstool, which says it has 66 million unique monthly visitors, are affectionately known as "Stoolies," according to CEO Erika Nardini. In a call with investors, Nardini said roughly half is already engaging in sports betting.
Penn said it, too, had considered partnerships with other major players in the sports and sports betting industry — some of whom it already shares a partnership. But it said Barstool comes out on top for its customer loyalty and engagement, its diverse revenue streams and its innovative approach.In 2018, Barstool Sports was valued at $100 million based on an investment by former majority owner Chernin Group, according to Jefferies Gaming analyst David Katz.
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