In the sports betting industry, market share is the most important thing. Barstool Sportsbook Pennsylvania might be a serious contender for a significant chunk of that in the Keystone State.
For the most part, however, it’s too early to tell. The initial numbers are strong but there are extenuating circumstances that might limit the sportsbook’s longterm success, including how potential users view the Barstool brand.
The risks associated with the Barstool brand
Barstool carries a negative connotation in the eyes of many. Media personalities have been recorded making comments that people have interpreted as misogynist and racist in the past.
Its reputation for defying cultural norms on social media has carried over to touting its sportsbook as well. This past weekend, Barstool’s Instagram account used a child in its promotion of the sportsbook, which might be a violation of state law.
— Jessica Welman (@jesswelman) September 28, 2020
Whether or not this post would constitute a violation is up to the interpretation of the PA Gaming Control Board. The regulation says that no advertising message can, “suggest or imply that underage persons engage in sports betting.”
Barstool could argue that this isn’t implying the child is wagering, but it would be difficult to say that this doesn’t at least flirt with the standard. It’s a prime example of how Barstool has built its business.
Barstool Sportsbook Pennsylvania numbers and what they mean
In its first weekend (Sept. 18-21), Barstool took over $11 million in handle in PA. People in the state downloaded the app over 30,000 times and there were over 12,000 first-time depositors.
DraftKings Sportsbook, which has been second in market share since January, took over $35.91 million in online handle in its first full month in the state. If Barstool can maintain its pace from its first weekend, it could surpass those marks by a comfortable margin.
The 12,000 first time depositors comprise the most important bit of information toward that end for Barstool. The crucial thing for the brand, like any and all sportsbooks, will be converting those into repeat customers.
The grains of salt to take this news with
Barstool benefitted from being the “new and shiny” latest thing on the market. With over 30,000 downloads in PA, less than half of the people who downloaded the app on the first weekend actually went through the registration process and made deposits.
Additionally, there’s no guarantee that any of those people will do so again, much less on a regular basis. Founder Dave Portnoy buoyed that opening weekend handle with his own wagers and we don’t know how many people with connections to the brand may have done the same.
Barstool is also in a competitive market where it could be outgunned. DraftKings’ and FanDuel’s path to success in market share in many jurisdictions is no secret. Both of those brands blow through capital, offering attractive promotions and very competitive odds.
Essentially, they operate a loss in order to gain market share. Whether Barstool can afford to do that at the same level is questionable. Penn National, which owns over a third of the company, has just released 14 million new shares to raise cash.
That means expecting Penn to front the cash to compete might be a bad plan. Naturally, Barstool could look to other sources for marketing funds.
Barstool does come with a built-in potential customer base from its media properties, just like DraftKings and FanDuel did with their daily fantasy games.
Whether Barstool will overcome competitors’ marketing machines and its own reputation to hold market share in PA over the long haul is up in the air.
The start has been good, but that’s all it is at this point – a start.