It is evidently way too early to know if PENN Entertainment’s choice to jettison the Barstool Sportsbook model in favor of ESPN as its mobile sportsbook manufacturer will perform out. There will undoubtedly be winners and losers in this decision, and the ramifications may possibly not be recognised for a long time.
But according to a lot of observers of the sportsbook industry room whom Sports activities Manage questioned about the offer, there is one particular significant winner in all this: Dave Portnoy, the founder — and after all over again 100% proprietor — of Barstool Sports activities.
“Portnoy is almost certainly one particular of the 10 major personal winners submit-PASPA,” reported Chris Grove, the lover emeritus and strategic advisor at Eilers & Krejcik Gaming, a gaming exploration organization. “He’s not in [DraftKings CEO] Jason Robins or [Flutter CEO] Peter Jackson territory, but there are significantly, much, far far more names guiding him than in advance of him. He bought the revenue, an outstanding encounter-conserving exit, and ended up with a larger and extra important Barstool than he had in advance of the PENN misadventure begun.”
At initial blush, it may possibly look Portnoy is a massive loser in this deal. Immediately after all, Barstool Sportsbook is a person of the major — if not the biggest — sportsbook flops in the publish-PASPA era. PENN used $551 million around a period of many years to finish the acquisition of Barstool Sports and use the brand, only to give it up soon after the sportsbook unsuccessful to access the leading tier of operators. The sportsbook is to be rebranded as ESPN Wager in November beneath the new PENN-ESPN partnership.
Moreover, Portnoy observed his name regularly invoked in a damaging light-weight, most notably in a New York Occasions piece that thorough a previously unreported bankruptcy.
And regardless of obtaining Barstool back for $1, as comprehensive in PENN’s quarterly filing with the Securities & Exchange Fee, Portnoy did not get it back totally free and apparent. He signed a non-contend arrangement, facts of which are not publicly offered, and if he at any time sells Barstool in the future, he’ll have to fork in excess of 50% of the proceeds to PENN.
But the positives appear to be to outweigh and overwhelm the negatives. Portnoy gets his business back again from PENN for a buck after pocketing untold hundreds of thousands from selling his firm to PENN in the first put. Sportico reports that details of Portnoy’s prosperity from the offer are mysterious, but it approximated he acquired $150 million from the sale and may possibly be keeping upward of a million shares of PENN stock (now trading at $24 and transform).
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Mo’ cash, less issues
“Portnoy efficiently bought a phone on his organization, finding a ton of dollars to give it up for a small period of time, and finding it again 100 %,” observed Alan Woinski, the CEO of Gaming Usa Corp.
In addition to the funds, Portnoy also now receives out from beneath the wagering regulatory environment and is, once again, free to say — and do — what ever he pleases. His qualifications experienced designed head aches for PENN and Barstool Sportsbook with regulators in multiple states, together with Barstool’s dwelling point out of Massachusetts. As Portnoy famous himself, this is the very first time in a 10 years that he holds complete command about the firm he started off as a four-web page sports activities newspaper a lot more than 20 yrs in the past.
Emergency Push Convention – I Acquired Back Barstool Sports pic.twitter.com/dmUk0eNowx
— Dave Portnoy (@stoolpresidente) August 8, 2023
“Dave Portnoy is an apparent winner in the PENN/ESPN offer. We need to all would like to promote a firm for over $500 million and acquire it back for $1,” explained Lloyd Danzig, the running companion of Sharp Alpha Advisors. “While Barstool Sportsbook unsuccessful to attain sizeable marketplace share, it is not apparent that this was owing precisely and solely to viewers composition.”
And, as Woinski places it, Portnoy can — and will — only enable this roll off his shoulders.
“He retains his identify out there, can make tens of millions, retains his company,” he said. “And he can just shrug off that Barstool just is not the right suit for a regulated field.”
Nevertheless, Brendan Bussmann, the running partner of Las Vegas-primarily based gaming consultancy B World wide, points out that Portnoy “coming out a winner” did not appear simple and details to issues in the course of Portnoy’s PENN partnership that altered the industry.
“While Portnoy, Barstool, and PENN came out on major, they do have the lingering results from an effort by a vocal minority that did everything probable to discredit him by both the push or with regulators, even likely so considerably as pouring kerosene on the marketplace,” Bussmann claimed. “While that may well not have been the struggle for Portnoy to earn, he won in the conclude.
“As Stone’s Policies say, ‘The only thing worse than staying talked about is not staying talked about.’ Portnoy is the epitome of this. And in the end, he was appropriate. No one particular could control Barstool.”
In a different time …
“I assume Dave Portnoy is one of the luckiest males alive,” explained longtime on line casino government (and Athletics Take care of contributor) Richard Schuetz. “Many of the more traditional corporations would not have touched him for concern of regulatory problems. PENN hung with him for good, even after lots of people today — these kinds of as myself — imagined the hunt was around when the Massachusetts people got on his ass. Dave should really thank God, financial institution all of his hundreds of thousands, and go delight in his existence. He caught a aspiration shot from PENN, and no just one will make that slip-up yet again.”
As a delicate counterpoint, Schuetz believes Portnoy is now “untouchable” in the gambling market, and if this were a past time — particularly, when athletics betting was contained to Nevada — there would have been zero chance Portnoy would have been permitted to be element of the field, owing to what grew to become recognised as the “suitability examination.”
“The reason for the qualifications investigation was to make certain of no poor previous associations or behaviors, for these could hurt the model of the marketplace,” said Schuetz, who used two years creating a Ph.D. dissertation on the matter. “The language that frequently surrounds this is that the man or woman demands to be observed to be a human being of very good character, honesty, and integrity. … Back in the day, [Portnoy] would be a enormous puppy to be permitted to associate with and assist condition the brand of the market.”
But in today’s planet? Portnoy was able to leverage his identify and his firm into a offer that turned into a steal.
“Very seldom do you get a second act with the exact same firm,” Bussman stated. “Portnoy is equipped to do that with Barstool, and he will come out of it back again on prime.”