Penn National Barstool App

3/31/2022

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Penn National Barstool App Rating: 4,2/5 2803 reviews

Launch to Include Fundraiser for the Barstool Fund to SupportMichigan Small Businesses Impacted by the COVID-19 Pandemic

Penn National Gaming, Inc. (Nasdaq: PENN) (“Penn National” orthe “Company”) announced today that the Michigan Gaming ControlBoard (“MGCB”) has approved the Company’s applications to offeronline sports wagering and iCasino products in Michigan. PennNational intends to officially launch its Barstool Sportsbookmobile app on iOS and android, as well as desktop at 12:00pm EST onFriday, January 22, 2021 and its iCasino products will followshortly thereafter, subject to final regulatory approvals. Thisfollows the opening of the Company’s retail Barstool Sportsbook atGreektown Casino Hotel (“Greektown”) in downtown Detroit onDecember 23, 2020.

“This is an exciting time to be launching our online BarstoolSportsbook in Michigan,” said Jay Snowden, President and CEO ofPenn National. “We have been incredibly pleased with the success ofthe mobile app since launching in Pennsylvania in September. Ourcustomers have thoroughly enjoyed engaging with Dave Portnoy, Dan‘Big Cat’ Katz and other Barstool fan favorites, and we expect moreof the same in Michigan. As the only gaming operator with a fullyintegrated sports media and entertainment partner, Penn can provideour customers the opportunity to interact with Barstoolpersonalities online and also in-person at our new BarstoolSportsbook at Greektown.”

During the opening weekend of the Barstool Sportsbook, PennNational will be partnering with Barstool Sports on a fundraiser tosupport Michigan small businesses impacted by COVID-19. From thehours of 12:00pm on Friday, January 22 to 11:59pm on Sunday,January 24, Michigan residents will have their first-time depositon the Barstool Sportsbook mobile app matched with a donation toThe Barstool Fund provided they wager equal or more than theirfirst-time deposit during the weekend. The Barstool Fund wasstarted by Mr. Portnoy in December to raise money to sustain smallbusinesses around the country that have been hard hit by theongoing pandemic. In addition, visitors to the retail BarstoolSportsbook at Greektown will have their first-time rated wagermatched by Greektown Casino with a donation to Fund.

View the Webcast. WYOMISSING, PA (Jan. 29, 2020) – Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn National” or the “Company”) announced today that it has entered into an agreement to acquire a 36% interest in Barstool Sports, Inc. (“Barstool Sports”), a leading digital sports media company, for approximately $163 million in cash and convertible preferred stock. Install our App and Create your Free Account-Choose your Teams and Place your Bets-Follow Along Live-Come Back for More Games, Teams, and Bets Barstool Sportsbook & Casino operated by Penn National Gaming, Inc. And licensed subsidiaries. Gambling problem? Call 1-800-GAMBLER for help. Sportsbook wagering currently only available in PA & MI. Penn National: The Barstool Sportsbook app from Penn National Gaming (NASDAQ: PENN) will launch on Friday, with an iCasino offering from Penn expected to launch shortly after.

“We’re proud to be able to support those small businessesimpacted by COVID-19 as part of our opening plans,” said Mr.Snowden. “I also want to thank the MGCB and its staff for theirtime and effort in reviewing and approving our applications. Inaddition, I want to thank our team at Penn Interactive, our greatpartners at Barstool Sports, and our risk management and platformproviders, Kambi and White Hat Gaming, for their many months ofhard work and collaboration. We’re off to a fast start in 2021 andlook forward to continuing our Company’s evolution into the leadingomni-channel provider of retail and online gaming, live racing andsports betting entertainment,” concluded Mr. Snowden.

About Penn National Gaming

With the nation's largest and most diversified regional gamingfootprint, including 41 properties across 19 states, Penn Nationalcontinues to evolve into a highly innovative omni-channel providerof retail and online gaming, live racing and sports bettingentertainment. The Company's properties feature approximately50,000 gaming machines, 1,300 table games and 8,800 hotel rooms,and operate under various well-known brands, including Hollywood,Ameristar, and L'Auberge. Our wholly-owned interactive division,Penn Interactive, operates retail sports betting across theCompany's portfolio, as well online social casino, bingo, andiCasino products. In February 2020, Penn National entered into astrategic partnership with Barstool Sports, whereby Barstool isexclusively promoting the Company's land-based and online casinosand sports betting products, including the Barstool Sportsbookmobile app, to its national audience. The Company's omni-channelapproach is bolstered by the mychoice loyalty program, whichrewards and recognizes its over 20 million members for theirloyalty to both retail and online gaming and sports bettingproducts with the most dynamic set of offers, experiences, andservice levels in the industry.

About Barstool Sports

Founded in 2003 by David Portnoy, Barstool Sports is a leadingdigital sports, entertainment and media platform that deliversoriginal content across blogs, podcasts, radio, video and social,supported by nearly 70 dedicated personalities. It benefits fromits base of loyal monthly unique visitors, including an estimated48% of males and 44% of females in the Millennial and Generation Xgenerations across the United States. In 2019, Barstool Sports grewby approximately 65%, delivering nearly $100 million in revenuefrom digital and audio advertising, ecommerce, events, licensingand subscription.

Forward-Looking Statements

This press release contains “forward-looking statements” withinthe meaning of the Private Securities Litigation Reform Act of1995. These statements can be identified by the use offorward-looking terminology such as “expects,” “believes,”“estimates,” “projects,” “intends,” “plans,” “goal,” “seeks,”“may,” “will,” “should,” or “anticipates” or the negative or othervariations of these or similar words, or by discussions of futureevents, strategies or risks and uncertainties. Such statements areall subject to risks, uncertainties and changes in circumstancesthat could significantly affect the Company’s future financialresults and business. Accordingly, the Company cautions that theforward-looking statements contained herein are qualified byimportant factors that could cause actual results to differmaterially from those reflected by such statements. Such factorsinclude, but are not limited to, risks related to the following:(a) the magnitude and duration of the impact of the COVID-19pandemic on capital markets, general economic conditions,unemployment, consumer spending and the Company’s liquidity,financial condition, supply chain, operations and personnel; (b)the launch of the Barstool Sportsbook app is subject to regulatoryapprovals, which may be delayed; (c) the impact of significantcompetition from other companies for online sports betting; (d) theCompany’s ability to achieve the expected financial returns relatedto its Barstool Sportsbook app; (e) the risk of failing to maintainthe integrity of the Company’s information technologyinfrastructure and safeguard its business, employee and customerdata in connection with the Company’s online sports betting; (f)the Company’s and its business partners’ ability to obtain variousregulatory approvals required to own, develop and/or operate theBarstool Sportsbook app may be delayed or may not occur; and (g)other factors included in “Risk Factors” of the Company’s AnnualReport on Form 10-K for the year ended December 31, 2019, theCompany’s Quarterly Reports on Form 10-Q for the quarters endedMarch 31, 2020, June 30, 2020 and September 30, 2020, subsequentQuarterly Reports on Form 10-Q and Current Reports on Form 8-K,each as filed with the U.S. Securities and Exchange Commission. TheCompany does not intend to update publicly any forward-lookingstatements except as required by law. In light of these risks,uncertainties and assumptions, the forward-looking events discussedin this press release may not occur.

View sourceversion on businesswire.com:https://www.businesswire.com/news/home/20210119005952/en/

Eric Schippers
Senior Vice President, Public Affairs
Penn National Gaming
610/373-2400

Penn National Buys Barstool

Joseph N. Jaffoni, Richard Land
JCIR
212/835-8500 or penn@jcir.com

Penn National is America’s new hottest gaming stock. The company is up some 1,200% from its pandemic lows to around $53 at the time of writing.

And just like DraftKings earlier this year, analysts keep raising their price targets higher and higher as the stock climbs.

Goldman Sachs became Penn’s latest supporter last week, initiating the stock as a ‘buy’ with a $60 price target.

“Penn sits at the cross-section of a rapidly rebounding regional casino space and inflecting growth in sports betting,” Goldman analyst StephenGrambling wrote.

Breaking down Barstool Sportsbook economics

Grambling argued Barstool Sportsbook’s customer base and content creation engine would drive “one of the lowest customer acquisition costs in the industry,” allowing Penn to quickly take sports betting share.

Goldman estimated the upcoming Barstool Sportsbook app could acquire customers at $57 compared to $193 for DraftKings and $190 for FanDuel. For further context, BetMGM said last week it hoped to reach a blended $250 CPA.

Goldman also pointed to Barstool’s social media reach, saying the two factors pointed towards a 15% market share for the Barstool Sportsbook.

“Based on our DKNG valuation, that methodology would drive a $4.5 billion valuation for Barstool/Penn sports betting alone,” Grambling said.

That’s $4.5 billion out of a current Penn market cap of $7 billion. In other words, a huge amount of Penn’s current market value is already driven by the Barstool Sportsbook.

As RoundhillInvestments CEO WillHershey put it recently:

“This is not hyperbole — the Penn Barstool acquisition may be one of the best deals of all time. I wonder what position the company would be in had it not gotten done.”

Questions to be answered for Penn National

If that $4.5 billion valuation stems from massive sports betting growth on strong margins, is it realistic?

Here’s more from Goldman:

“From the company’s 66 million monthly unique visitors, 62% bet on sports with 44% of those betting at least 1x per week. Additionally, 65% of their audience is in the key 21-44 age group. The cross-section implies a potential database of users that actively bet on sports of 18 million. Even if only 10% of these users are converted to the Penn/Barstool app, [that’s 1.8 million users.]”

Penn National, of course, already paid $163 million for access to that customer database by buying its Barstool stake. So ignoring that cost in new CPAs seems a little disingenuous.

But perhaps more importantly, there’s an assumption of 1.8 million sign-ups for a product the world has not seen yet.

And the app is on track to launch in September instead of August as initially planned, perhaps a tiny warning sign.

“What’s more important?” Penn CEO JaySnowden said at the firm’s recent Q2 results. “Rushing it and getting to some MLB and NBA games in August? Or doing this right, launching it in September when we know it will deliver a great experience for the end user?”

Execution is key

Getting it right is, of course, more important than rushing it. But it’s also a risk to debut your first-ever sports betting app into the furnace of NFL betting.

Do you want any bugs exposed on those sleepy days in August, or on NFL Sunday when 50,000 Philly fans log on at 1 pm EST to back the Eagles?

The product really is key here, and, of course, it’s an unknown. But there is likely a low bar to clear. We know the Kambi back-end should work – DraftKings and BetRivers have built good market share on the back of it.

Combine that with the Barstool marketing machine, and the Penn front-end really just has to be good enough.

Why that’s the case

As Eilers & Krejcik analyst AlunBowden put it in a recent note: “Barstool is a different beast. There is no doubting the willingness or desire of the team to throw themselves at gambling promotion.”

He added, however: “Barstool will have to excel at the fundamentals to make this work in product, retention, customer service, and trading. And that is not as easy as it looks.”

It’s not, and it’s an area Penn may struggle, simply because it’s new to the space and sports betting is operationally complex. But it’s worth remembering it took Sky Bet in the UK nearly a decade to back up its media presence with a great product. And when it did, it exploded.

Barstool has a clear route to a similar level of success. The road just might be bumpier than some analysts are expecting.

Penn National Gaming Barstool App

Buy or sell Penn National stock?

As for the Penn valuation, a word of warning: earlier this year when $DKNG was soaring, one reason was its exclusivity.