This would be in the form of an affiliate marketing deal, with Barstool promoting DraftKings odds and receiving a cut from customers it successfully directs to the operator’s sportsbook.
Under the terms, Barstool would not be licensing its brand for a sportsbook product, as it did so previously with Penn Entertainment.
No deal has been finalised due to a non-compete in Barstool’s contract with Penn that reportedly expires after the Super Bowl on 11 February.
Penn sells Barstool for $1
Penn Entertainment, which had previously operated the Barstool brand, sold the business back to Portnoy for just $1 in August, with a contract that included “certain non-compete and other restrictive covenants”.
Many commentators initially assumed this non-compete to be permanent, or at least valid for a longer period than six months.Penn, which has since launched ESPN Bet, is also entitled to 50% of the proceeds of any sale of the business in future.
In February 2020, Penn initially paid $163m for a 36% stake in the business, opting to purchase the remaining 64% three years later for $388m.
The plan was for Barstool to act as Penn’s flagship media-led online gambling brand in the US. The sports betting platform endured mixed fortunes, reporting an approximate 5% market share.
However, Penn threw that strategy overboard in August 2023 when it agreed a $2bn deal to licence Disney-owned ESPN, the most popular sports media brand in the US.
In the announcement, Penn set its sight on achieving $500m-$1bn in long-term EBITDA and a target market share of 20% by 2027.
The first full month of data in Iowa and Pennsylvania saw ESPN Bet take an approximate 8% market share.
While still early days, this stands Penn in firmly second-tier status, level with Caesars Sportsbook and ahead of BetMGM in those markets.