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What Does A Barstool, DraftKings Deal Mean For Sports Betting?

Bill Speros for Bookies.com

Bill Speros  | 5 mins

What Does A Barstool, DraftKings Deal Mean For Sports Betting?

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Barstool Sports and president Dave Portnoy have returned to their gambling roots. 

A deal between the site and Boston-based DraftKings went into effect immediately after the Super Bowl.  

When Portnoy bought back Barstool for $1 from Penn Entertainment, Barstool was barred from entering the legal sports betting space until after this current football season. It remains baffling why the non-compete part of that deal was so short. Penn ditched Barstool in favor of ESPN BET last summer. 

Unlike its previous journey into sports betting, this time Barstool is not operating or branding its own sportsbook. Rather, DraftKings is marketing DraftKings through the Barstool platform. Barstool is using DraftKings odds exclusively on its site and will earn fees for referring customers to DraftKings. 

Portnoy and several Barstool personalities streamed a free-throw shooting contest that began Monday and ended Tuesday. The task was to have a group of several shooters combine to make 41 freethrows without a miss. The mission was accomplished on the 7,607th attempt after more than 15 hours and 45 minutes. 

Back To Basics For Both Barstool, DraftKings

The companies had a similar deal in 2014 when DraftKings was a just a DFS provider. 

This more traditional play makes sense for both companies. DraftKings remains in a Stalingrad-like siege with FanDuel, fighting for supremacy in U.S. market share. In August, DraftKings overtook FanDuel in overall U.S. market share in 2023. A study had DK finally catching up with its primary competitor, capturing 31% of overall gross gaming revenue, compared to FanDuel’s net handle of 30%. FanDuel has been the U.S. market leader since PASPA was overturned in 2018.

Barstool would earn "low eight figures per year" in the multi-year deal, according to Sportico's reporting. This would give Portnoy's company a revenue boost without tying it down with the regulatory concerns that come with being a licensee. 

After getting his company back from Penn, Portnoy was forced to lay off multiple employees and cut costs. The revenue would no doubt give Barstool the cash it needs to continue its push "to the moon" and beyond. 

Unlike when the Penn-owned Barstool Sportsbook launched, this time neither company will be starting from scratch. Barstool is secure in its hold on the Stoolies. And DraftKings is No. 1 in the U.S. and looking to both pull away from FanDuel and keep Fanatics from tapping into the coveted Barstool audience. 

PENN sold Barstool back to Portnoy in August for $1 after paying him and his partners $541 million over a period of three years. Portnoy has agreed to share 50% of the proceeds of any future sale of Bartsool to PENN. But “El Presidente.” has been adamant that he never plans to sell. 

Barstool will again face regulatory scrutiny in some states as a vendor, including Ohio and Massachusetts. 

That irony is not lost given that Portnoy is a Bay State native, and DraftKings was founded outside of Boston. 

Why The Barstool Sportsbook Didn’t Work

During an open meeting on November 7, Massachusetts sports betting regulator and Massachusetts Gaming Commissioner member Eileen O’Brien said she had concerns about "components ongoing about the connection of the Barstool brand to PENN” that had been raised in a previous executive session. 

Portnoy mocked that claim in a post on X. Bookies.com has made multiple requests for a comment from PENN but has yet to hear back on this matter. Two Barstool sources told bookies.com at the time they were unaware of any ongoing relationship between Barstool and PENN after the app switch was made. 

A lack of scale and prohibitions on Barstool content in the regulated space doomed PENN’s partnership with Barstool. 

The marriage between PENN and Barstool struck some as odd at the outset. But the Barstool brand was coveted due to its ability to attract and develop deep and loyal relationships with those in the sports betting sweet spot: Men between the ages of 21-34. 

For a variety of reasons, the two companies were unable to leverage the loyalty Barstool fans had for “The Pirate Ship” to activity in the legal sports betting space. 

Portnoy said his company struggled with the limits of the regulated gaming space. Barstool was under fire in Ohio and Massachusetts even before it launched in those two lucrative states. 

Barstool Sportsbook and PENN were fined $250,000 by the Ohio Casino Control Commission in early 2023. The penalty was handed down for advertising the sports book on or near a college campus and for targeting customers under 21, the legal age to bet in the state, during a Barstool College Football show hosted on the University of Toledo campus in 2022. 

Massachusetts regulators put extra conditions on PENN’s license in Massachusetts in part due to their concerns about unproven allegations made against Portnoy that were highlighted by the New York Times and other media outlets. 

A decision on whether to fine PENN for a “Can’t Lose Parlay” offered by Barstool on March 10, 2023, the day mobile betting launched in Massachusetts, has yet to be made. The hearing on that case in the spring turned into a circus. Attorneys for PENN cited a “Cap’n Crunch Crunch Berries” defense in defending the offer. And openly trashed the handicapping skills of Barstool personality Dan “Big Cat” Katz. 

About the Author

Bill Speros for Bookies.com
Bill Speros
Bill Speros is an award-winning journalist and editor whose career includes stops at USA Today Sports Network / Golfweek, Cox Media, ESPN, Orlando Sentinel and Denver Post.