Will Barstool Sportsbook — Now Live In One State — Become A National Powerhouse?

Optimism is high off opening weekend downloads, but DraftKings and FanDuel's lead won't be easily erased
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The Barstool era of legal U.S. sports betting, in which people who call themselves “El Presidente” and “Big Cat” and “Marty Mush” stand as avatars of regulated gaming, has arrived. Penn National’s Barstool Sportsbook launched on the web and in the App Store on Friday for customers in Pennsylvania, to much hype and fanfare — and apparently, many downloads.

According to data from Sensor Tower, the Barstool Sportsbook app had 63,000 downloads in its first weekend, peaking Saturday with 23,000 downloads.

Bank of America analyst Shaun Kelley wrote that “although data is limited, initial metrics are encouraging, as it was the #1 sports betting and overall sports app in the App Store for much of the weekend.”

DraftKings Sportsbook and FanDuel Sportsbook are the two clear leaders in the online sports betting space, and have been since they launched in New Jersey in 2018, but Barstool’s early download numbers crushed theirs — DK and FD’s opening weekends saw 4,000 and 9,000 downloads, respectively, and their single-day records are 15,000 and 19,000.

But it’s also somewhat of a proverbial apples-to-oranges comparison. Barstool’s launch came with great fanfare during an NFL weekend in a semi-mature market; DK and FD went live without much warning during the summer months, and converted customers gradually enough while New Jerseyans were still learning about legal sports wagering. There was never going to be a single day or single weekend of a concentrated download frenzy.

Unsurprisingly, none of those qualifiers could slow Barstool Sports founder Dave Portnoy from declaring that “we blew all our competitors out of the water.”

Just getting warmed up …

Even if you view FanDuel and DraftKings — not to mention William Hill, BetMGM, FOX Bet, BetRivers, PointsBet, and other mobile sportsbooks finding solid audiences — as very much in the water and not blown out of it, there’s no doubt that Barstool made a splash during its opening weekend.

The question now is how that translates. After the initial buzz wears off, will the site prove more hype than handle? Or was this step one on the road to Barstool challenging DraftKings and FanDuel for national supremacy?

One thing most experts agree on is that the sports betting competition in the U.S. is a marathon, not a sprint, and the head start of DraftKings and FanDuel and hot start of Barstool guarantee nothing about where they’ll finish the race.

“It’s important to remember that the head start for DraftKings and FanDuel really stretches back to about 2014, not 2018,” said gambling industry analyst Chris Grove, a partner at Eilers & Krejcic Gaming. “So these are companies that were working on this question of how do we efficiently acquire people who are interested in risking money on sports outcomes well in advance of [the Supreme Court’s overturning of] PASPA. And their head start also includes the $800 million or so that they dumped into DFS advertising across that span as well. So that head start is obviously impressive, but the longer the head start is for DraftKings and FanDuel, the more time that competitors should be allowed to play catch-up before you really have a like-for-like comparison that allows you to answer the question of who is a legitimate contender in this market.”

Grove pointed out that a company like Caesars might have a vast player database, but it’s not a database that’s as optimized toward online sports betting as those of the DFS giants. So there is, and will continue to be, a learning curve for major casino brands before they can close the gap on FanDuel and DraftKings.

“It’s probably far too early for us to say that the market belongs to DraftKings and FanDuel,” Grove added. “The market may be theirs to lose, I suppose. But that’s a different thing than just assuming that they have the market locked up. You can’t properly evaluate how strong of a competitor Penn is going to be yet. Or BetMGM. Or Caesars. Because the assets they all have at their disposal are just starting to be deployed.”

Stoolies stand up

What are those assets that Penn/Barstool in particular has at its disposal?

Penn National brings the gaming industry know-how, which most sports betting companies are equipped with, while Barstool Sports brings certain characteristics that set it apart. The brand’s following is enormous and passionate — 8.8 million large on Instagram, just shy of 5 million on Facebook, and 2.5 million on Twitter. The vast majority of those numbers are young males, a demographic that tends to overlap with the slices of the population that are either already enthusiastic about sports betting or could become enthusiastic about sports betting.

And Barstool brings controversy, which certainly sells, even while it turns off countless potential customers.

“From a classical gaming regulatory model, Barstool is an interesting industry study,” said casino industry veteran Richard Schuetz, owner of the gaming and regulatory consulting entity Schuetz LLC. “Most regulatory acts mandate something along the lines that the industry participants operate at the highest levels of character, honesty, and integrity. I guess that means that the n-word, misogyny, and anti-Semitism, be it real or veiled as humor, now constitutes a behavior consistent with character, honesty, and integrity.

“I am probably showing my old-school heritage here, but I am challenged to see how this helps elevate the image of the industry and enhances its sustainability with the public.”

Schuetz speaks for many inside and outside the industry, and there certainly will be backlash in the form of bettors who refuse to patronize the Barstool product. But we live in a strange time in which there’s more upside than ever to having people passionately oppose you.

“That backlash is a piece of weight on the scale,” Grove analyzed. “On the other side is the culture and the community that actually draws strength from that backlash. It’s an interesting dynamic. The people that don’t like Barstool create an ‘other’ and help to define the Barstool community and give it an identity, and strengthen it in some way.

“Penn knew exactly what they were getting and decided there was more weight on the pro side than on the con side. And they decided that the controversy around Barstool would be one of the main forces that would help Barstool cut through what otherwise is a very crowded brand conversation in a typical U.S. sports betting market. So I think that is, from Penn’s perspective, a feature, not a bug. Penn’s hope is that the force of that culture, the fact that fans of the brand draw some part of their identity from the brand, will keep people engaged, even in the absence of traditional re-engagement tactics like aggressive marketing spend.”

Does making money matter?

So far, nobody has come close to DraftKings and FanDuel with regard to that marketing spend. But Schuetz warns not to confuse marketing spend with actual success as a sports betting operator.

“I almost tend to look at DraftKings and FanDuel as marketing companies that happen to be delivering a betting product. What I have not seen yet is if they can operate a profitable business model,” Schuetz said. “When I was in the betting business, the book was considered a part of the casino, so we did, especially at the Stardust, use it as a marketing tool to generate activity both for itself and the larger casino gaming experience. And that was cool, but the book was also expected to be profitable. Burning cash quarter after quarter was not as accepted back then.

“The current valuations of these companies seem to indicate very high expectations, and if these expectations are not met, look for the finger-pointing to start and the divorce lawyers to start circling the scene. With this comes a potential groundswell of change with respect to the composition and character of the industry, up to and including restructurings.

“I had the opportunity to meet and visit with leadership expert Steven Covey back in the 1990s, and he was famous for saying, ‘The main thing is to keep the main thing the main thing.’ That always made sense to me, and when I was in and around the booking business, the main thing was to make sustainable profits. I have no earthly idea what the main thing is today.”

It seems the main thing today, when it comes to online sports betting, is to acquire customers, almost at all costs. On that front, DraftKings and FanDuel are succeeding, and Barstool Sportsbook is off to a strong start.

But the main thing can easily change, especially in a vertical this new and this far from maturity. Who’s winning the wars when the top online sports betting states are New Jersey, Pennsylvania, and Indiana is all well and good, but these are effectively preseason games, and the games that count will be played when California, New York, Florida, and Texas have regulated online sports betting.

Quite a few sportsbooks are playing the long game — in part because they can’t compete in the short game. Penn/Barstool would appear to a sportsbook that can compete right out of the gate.

Bringing a big, mainstream name to the table — as FOX, MGM, and Caesars all did with their sportsbook offerings — has not proven sufficient to grab a top-tier market share.

But Barstool has a name — if a bit more “cult” and less “mainstream” than those others — and combines it with a fervent level of brand support that nobody else in the space can boast. When was the last time you saw someone as proud to identify as Team FanDuel or Team William Hill as some supporters are to fly their Barstool flag?

Barstool Sportsbook is up and running in one state. Other significant states, like New Jersey and Michigan, are expected to follow in the months ahead. All signs point toward Barstool making headway, capturing eyeballs, and being competitive.

But one weekend of impressive download numbers and boasting from “El Presidente” do not a position shoulder to shoulder with DraftKings and FanDuel make. The landscape will shift several more times before this battle is decided. Pennsylvania represents a small ’Stool sample. On a national scale, for now we’re betting blind if we’re betting either on or against Barstool.

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