Penn National Gaming is the largest regional casino company in North America and owns the most horse racing tracks in the United States.  Penn National has 41 properties in 19 states, which includes 10 racetracks. 

Like all casino and racetrack companies, Penn National’s customer profile skews older.  Penn National is implementing a strategy to attract a younger demographic with its purchase of a 36% share in Barstool Sports for $163 million in cash and $28 million in preferred stock.  In three years, Penn National will pay $62 million more to boost its share of Barstool Sports to 50%, with the option to have majority control.

Jay Snowden, Penn National’s president and CEO, commented on the rationale:  “With its leading digital content, well-known brand and deep roots in sports betting, Barstool Sports is the ideal partner for Penn National and will enable us to attract a new, younger demographic, which will nicely complement our existing customer database.  In addition, with 66 million monthly unique visitors, we believe the significant reach of Barstool Sports and loyalty of its audience will lead to meaningful reductions in customer acquisition and promotional costs for our sports betting and online products, significantly enhancing profitability and driving value for our shareholders.”

If the partnership turns out as planned, Penn National will attract a significant number of the 21-to-45-year-old males who access the Barstool Sports website to Penn National’s online sports betting and horse racing account wagering offerings.

Whether the Barstool Sports concept works enough to justify Penn National’s monetary outlay is an open question, but the strategy is aggressive and has promise of achieving what casinos have heretofore struggled with, and that is attracting a younger customer base. With online sports betting in its infancy in the United States, the Penn National/Barstool Sports alignment has huge potential for monetary return.

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