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The parent company of the Plainville slots parlor has bought into and partnered with Barstool Sports in an acquisition that the company said will draw younger players to gambling and sports betting.
Plainridge Park Casino parent Penn National Gaming announced that it is purchasing 36% of the equity in Barstool in a transaction valued at roughly $163 million. Penn will be Barstool’s exclusive sports gaming partner and will have "the sole right to utilize the Barstool Sports brand for all of the Company's online and retail sports betting and iCasino products," the company said.
"With its leading digital content, well-known brand and deep roots in sports betting, Barstool Sports is the ideal partner for Penn National and will enable us to attract a new, younger demographic, which will nicely complement our existing customer database," Penn President and CEO Jay Snowden said. "In addition, with 66 million monthly unique visitors, we believe the significant reach of Barstool Sports and loyalty of its audience will lead to meaningful reductions in customer acquisition and promotional costs for our sports betting and online products, significantly enhancing profitability and driving value for our shareholders."
After three years, Penn will increase its ownership to 50% with an additional $62 million investment, the company said.
Penn had been rumored to be in talks to purchase the sometimes controversial Barstool, which already offers content related to sports betting and which has a devoted following of mostly young men. Launched in the Boston area by Dave Portnoy in the early 2000s, Barstool has expanded from sports to cover entertainment and pop culture, and from a website to a multimedia lifestyle brand.
Initially, Penn will own 36% of the company, the same stake as current owner The Chernin Group. Employees, including Portnoy, will hold 28% of the equity.
The deal is expected to close within the next two months, Penn said. On Wednesday morning, Penn is holding a call with investors to detail the transaction and "expand upon the Company's omni-channel vision for the convergence of sports betting and casino gaming."
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