Penn National Gaming (NASDAQ:PENN) popped nearly four percent on Friday amid speculation that the company’s Barstool Sportsbook app launched in quiet, partial fashion in New Jersey this week and that an official, full state launch is slated for next week.
The move into the largest US sports wagering market by the upstart sportsbook operator was confirmed Friday on Twitter by Barstool Sports founder David Portnoy.
NEW JERSEY #BARSTOOLSPORTSBOOK pic.twitter.com/NPFhW3Gtlw
— Dave Portnoy (@stoolpresidente) August 20, 2021
The addition of New Jersey brings the list of states in which Barstool Sportsbook is available in mobile form to seven with others being Colorado, Illinois, Indiana, Michigan, Pennsylvania and Virginia. The operator’s internet casino platform is available in Michigan and its home state of Pennsylvania. Penn National previously said it’s aiming to have the mobile sportsbook live in 10 states before the end of this year.
New Jersey a Coup for Barstool Sportsbook
In January 2020, Penn National doled out $163 million to acquire 36 percent of Barstool Sports with an option to eventually acquire the media firm outright for $450 million.
That deal set the stage for Penn to leverage the Barstool brand, which is highly recognized and popular with millennials and Gen Z – demographics gaming operators are actively wooing. Barstool Sportsbook debuted in Pennsylvania last September and has been quick to grab decent market share in some markets.
New Jersey is the largest state in terms of handle in which Barstool Sportsbook is available and the state is an essential market for any operator in the ultra-competitive regulated sports betting industry. Last month, sportsbooks in the state retained almost $55 million on a handle of $578 million while internet casinos posted a record win of $118.6 million.
Some of New Jersey’s dominance in sports betting is derived from neighboring New York not yet allowing mobile sports wagering. Thought the process has been slow-moving, New York is preparing to embrace mobile sports betting. Penn is partnering with Fanatics to win rights to offer online sports betting in the fourth-largest state.
Intense Competition Across the Country
While New Jersey is an essential market for any sportsbook operator, online sports betting is an increasingly national business as it’s live and legal in 22 states and Washington, DC with another 10 states waiting in the wings.
Rapid expansion of iGaming and sports betting in the US also underscores the fierce competition in these industries and the expenditures companies contend with to lure customers. There are plenty of participants, but the domestic online sports wagering industry is dominated by FanDuel, BetMGM and DraftKings.
However, Penn isn’t spending big dollars on marketing Barstool Sportsbook, indicating it’s generating return on investment from its stake in Portnoy’s company and that’s building market share on a cost-effective basis.
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