Barstool Sports, a USA Bro Culture company, has been sold off for $1 by Penn Entertainment. Penn then teamed up with Disney to create ESPN Bet, a sportsbook. Penn Entertainment, Inc. (Penn) had built up its sportsbook licenses in the USA with the Barstool brand. Penn was unable to continue expansion due to repeated embarrassments by Barstool frontman, Dave Portnoy.
Sports fans in the USA can bet on their favourite games through ESPN Bet, come fall.
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Penn bought into Barstool Sports in 2020 and completed take over earlier this year. Having spent over $550 million US dollars on the acquisition, the world was stunned to hear they had sold it back to its founder, Dave Portnoy, mere months later – for one dollar.
Penn has wide-spread holdings throughout the USA and is best known for its Hollywood casinos and resorts. It has licenses for sportsbooks in sixteen states. These will be re-branded to ESPN Bet in (the northern hemisphere’s) Autumn of this year. Disney’s ESPN cable tv company has been losing customers to wireless streaming options. Partnering with Penn, will allow both companies to flourish, increasing customer engagement and reach.
Barstool’s Demographic Age Problematic
Barstool is known for its obnoxious “honesty”. It’s frontman, Dave Portnoy, can be found with his team, commenting on sports and current events across multiple platforms. Barstool’s main demographic is young men, however, the age restriction for gambling in the USA is 21 years. Separating the sports betting from the entertainment-only sections of Barstool wasn’t always performed well. They were fined for advertising gambling close to a college, violating the media laws of that state.
The Barstool company is huge and successful among its demographic. It has more than one hundred shows spanning across all major platforms. Its network boasts over 200 million subscribers on its video platforms, podcasts, social media, pay-per-view, live events and various commercial endeavours like sports sponsorship match-up services. With 90+ personalities fronting the shows and the often “unapologetically obnoxious” content by Barstool, their commentary was not always suitable for conservative government regulators.
Barstool Sportsbook Plagued by Frontman’s Public Behaviour
Dave Portnoy and his team were called out on multiple occasions, both informally and in legal settings, for sexist, racist or abusive behaviours. This caused expensive delays and lost opportunities for their Sportsbook operations. It led some state government gambling regulators to investigate the Barstool business before licensing, and some state licensing was refused because of the scandals. One Barstool teammate was recently fired for racial slurs.
Compared to big gunners in the sportsbook industry, FanDuel and DraftKings, Barstool owned only 2% of market share according to recent quarterly reports. The mobile app design and website’s user interface were blamed, with FanDuel and DraftKings products being lauded for their ease of use. Barstool Sportsbook had fewer states to access (licensing problems caused by bad behaviour) and a worse user experience. It’s easy to understand why they didn’t hold much of the pie.
Disney Dips Back into Sportsbetting
In 2019 Disney bought many of 21st Century Fox’s entertainment assets (including the original 100-year-old 20th Century Fox filming studio!) Along with the suite, they bagged the sports broadcast channel, Fox Sports 1. However, they then proceeded to dismantle the sports-bet asset related to it. This left a new void in the potential products Disney could offer its clients. A sportsbook partnership utilising Disney sports channels’ vast customer base became the goal of every sportsbook company in the USA.
Did Disney regret folding their existing Fox sports betting platform? Did they later eye off the potential earnings and come up with a new plan to create sports betting with ESPN? Or, was this always the plan, to buy out Fox Sports, close down its betting options, and increase ESPN Bet’s draw? Either way, the gambling sector will be keeping a close watch on how ESPN Bet progresses.
