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Dave Portnoy’s Barstool Sports is reportedly in talks with DraftKings about a return to sports betting, just months after exiting the activity.

According to unnamed sources quoted in Sportico, talks have focused around a multi-year agreement that would pay Barstool “in the low eight figures per year”.

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.

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