Media content companies are fast becoming desirable partners for gaming companies trying to tap into the fast-growing $150 billion dollar legal sports betting market.
Regional casino operator Penn National Gaming is the latest to target a sports media brand and a controversial brand at that. The owner of 43 casinos in the US and Canada including the Tropicana in Las Vegas is in advanced talks to purchase Barstool Sports from the Chernin Group.
Barstool has been the subject of several stories from HBO's "Real Sports" to the web's Daily Beast, focusing on its reputation as a haven of social-media harassment and misogyny as well as charges of attempts at union-busting. That a publicly-traded company like Penn National would be ready to take on an outlet so often mired in the headlines and social media dust-ups speaks to the competition to try and take the lead in the sports gambling arena.
|PENN||PENN NATIONAL GAMING||75.55||-1.93||-2.49%|
“We continue to speak or have spoken with everybody from DraftKings to FanDuel to Stars to PointsBet to Penn to William Hill to MGM to Rush Street, etc. I think that if we aligned ourselves with one company with a shared vision, that company would have an extraordinary advantage in the race to becoming the leading gambling company in the United States,” Portnoy said in a statement to Recode.
Representatives for Penn National and The Chernin Group did not immediately respond to a request for further comment.
More and more though sports content companies and sports betting see their futures aligned. FanDuel, started life as a sports fantasy company, but in 2018 Irish/British bookmaker Paddy Power Betfair paid $465 million for the company and merged its the TVG Network, which televises horse racing. TVG now airs several FanDuel branded programs and last month FanDuel reached an agreement with The Cordish Companies to bring FanDuel's fantasy and sports to Cordish's Live! Casino & Hotel and Entertainment Districts.
"This partnership allows us to capitalize on the incredible success of sports betting to date and bring FanDuel's top sports betting operations to Cordish destinations across the United States," said Matt King, CEO FanDuel in a statement on the deal.
The deals between media and gaming have been fast and furious. MGM Resorts partnered with Verizon’s Yahoo Sports last November to launch a mobile sportsbook for customers in New Jersey, with plans to expand operations to other states when legally viable.
Fox Corp. bought a stake in gaming brand Stars Group and subsequently launched Fox Bet, which will offer live betting in states where sports gambling is legal. Burgeoning daily fantasy and gambling brand DraftKings has a partnership with Vox Media’s sports site SB Nation.
Plus, the pioneer in the sports media/gaming marriage, the Las Vegas based VSiN (Vegas Stats & Information Network) with more than 80 hours of live linear programming weekly has deals with SlingTV and Fubo to stream its content including legendary sportscaster Brent Musburger's daily show, "My Guys in the Desert." The network also offers its programming on a dedicated SiriusXM satellite radio channel. Plus, all of VSiN's programming airs from the South Point Hotel, Casino and Spa in Las Vegas.
Barstool’s current gambling-related offerings include a weekly series called “Barstool Sports Advisors,” featuring Portnoy and Dan “Big Cat” Katz, as well as a site vertical called “Barstool Bets.” If the Penn National deal proceeds, the gaming company could utilize Barstool branding on some of its operations, according to Recode.
The prospective deal for a majority stake would value Barstool Sports “much higher” than the $100 million valuation it held as recently as 2018, Vox’s Recode reported, citing sources familiar with the matter. Founded by entrepreneur Dave Portnoy, Barstool Sports prioritized gambling-related content since the U.S. Supreme Court struck down a federal ban in May 2018.
The legal U.S. sports betting industry has expanded rapidly since the Supreme Court’s ruling. Morgan Stanley projected last fall that the overall market could be worth as much as $8 billion by 2025. As of this month, 20 states have legalized sports betting in some form, and deliberations are underway in several other locales.