ESPN is taking another step into the sports betting game. The sports entertainment leader has cut a long-term deal with casino owner PENN Entertainment to launch the ESPN Bet sportsbook. And that will impact both Barstool and PENN operations in Illinois.
As part of the deal, Penn will sell the Barstool Sports brand back to founder Dave Portnoy. Penn acquired Barstool Sports from Portnoy in 2020.
ESPN Bet will launch this fall in the 16 states where Penn has sports betting licenses, including Illinois. It will replace the Barstool Sportsbook. Meanwhile, Barstool will still have a significant presence in Illinois.
ESPN Bet to replace Barstool Sportsbook in Illinois
According to the terms of the deal, Penn will get the rights to the ESPN brand (for betting purposes) for 10 years. There is an option to extend the deal for another 10 years with mutual agreement. ESPN programs will promote the service, with some ESPN talent also being involved. ESPN will also be able to designate a Penn board member after three years.
PENN Entertainment currently operates four separate Illinois casinos. Three of them are home to a Barstool retail sportsbook: Argosy, Hollywood Aurora and Hollywood Joliet. The assumption is that those retail locations will be rebranded as ESPN Bet sportsbooks.
Meanwhile, Barstool Sportsbook has operated in the Illinois sports betting scene since launching in 2021. As mentioned, PENN and ESPN plan to launch their new site and mobile app this fall. The rebranded site is expected to operate under the same tech stack as PENN’s other sports betting operator, theScore Bet. However, all this needs to be approved by the Illinois Gaming Board.
According to revenue reports, Barstool Sportsbook ranks sixth out of seven Illinois sports betting operators in both lifetime handle and revenue. However, Barstool ranks third in those same categories when it comes to retail-only sportsbooks in Illinois. That is partly due to having three separate retail locations in the state.
Barstool has a large footprint in Illinois
Barstool Sports has been a fixture in Illinois for many years. The media company first opened an office in the Lakeview neighborhood. Barstool also runs a themed bar in River North.
Recently, the company leased a second office space in Chicago located west of the Chicago Loop at 400 N. Noble St., nearby Fulton Market. The newer space measures 400,000 square feet and hosts a full-size basketball court, a golf simulator, several music studios and additional spaces for creating media content. Barstool Sports’ spokesperson Debra Duffy announced that the company’s employees would move from their New York offices to the brand-new Chicago office.
As part of this new deal, Barstool is retaining these spaces. Many of the company’s media fixtures, like Dan “Big Cat” Katz, have Chicago connections. Katz is a well-known Chicago Bears fan.
Portnoy: “I bought back Barstool Sports”
PENN sold 100% of the Barstool Sports stock to Dave Portnoy in exchange for certain non-compete and other restrictive agreements. PENN also has the right to receive 50% of the gross proceeds received by Portnoy in any subsequent sale or other monetization event of Barstool.
Portnoy posted a video on X saying this is arguably the biggest day in the history of Barstool Sports.
Emergency Press Conference – I Bought Back Barstool Sports pic.twitter.com/dmUk0eNowx
— Dave Portnoy (@stoolpresidente) August 8, 2023
He said he has nothing but respect for PENN and the relationship the two companies created. However, he says there were several roadblocks preventing the partnership and Barstool sportsbook from reaching its top potential.
“We underestimated just how tough it is for myself and Barstool to operate in a regulated world,” said Portnoy. “Where gambling regulators, The New York Times, Business Insider hit pieces (affecting) the stock price. Every time we did something it was one step forward, two steps back. We got denied licenses because of me. You name it.”
Portnoy says the regulated gambling industry is likely not the best place for Barstool Sports and the content the company makes.
