Barstool Sportsbook Trounces App Download Marks Held by DraftKings, FanDuel

Despite just a single state launch, Penn National Gaming’s (NASDAQ:PENN) Barstool Sportsbook app throttled records previously held by rivals DraftKings and FanDuel.

The much-ballyhooed sports betting platform, a collaboration between Penn National and Barstool Sports, had a three-day soft launch in Pennsylvania last week before going live across the state over the weekend. Data confirms the timing was good.

Both marks easily top previous highs set by DraftKings and FanDuel, the two largest operators in the US online and mobile sports betting market. Morgan Stanley doesn’t mention how many bets were placed as a result of the rush to the Barstool platform.

DraftKings was downloaded just 4,000 times in its debut weekend in New Jersey in 2018, while its single day high is 15,000, set on Sept. 10, according to Bloomberg data. FanDuel’s weekend high for customers placing the app on their mobile devices is 9,000, notched on NFL opening weekend in 2018, while the operator’s daily record is 19,000, set on Sept. 13.

Barstool Stock a New Favorite

Allen says Barstool Sportsbook is off to an “extremely strong” start in Pennsylvania, but that the arrival of a new player didn’t result in a significant reduction in gamblers moving other betting platforms onto their smartphones.

Barstool is expanding the market rather than cannibalizing it,” said the Morgan Stanley analyst.

That bodes well for the industry at large, notes Allen, who has an “equal-weight” rating on Penn National stock. That’s one of the more tepid views on Wall Street.

The shares are up more than 174 percent year-to-date, and the stock is rapidly becoming an analyst favorite due in large part to enthusiasm tied to Barstool Sportsbook. Shares of Penn are up more than six percent in midday trading on the aforementioned app download data.

The gaming company is planning to launch the app in several more states in the first quarter of 2021.

Tests Linger

Obviously, Barstool Sportsbook is in its infancy, and while Pennsylvania is a major sports wagering market, it’s just one state, meaning Penn’s foray into the hyper-competitive online sports betting industry faces more tests.

Those include confirming to Wall Street and investors that leveraging personalities, namely Barstool Sports founder David Portnoy, is an effective business model. The app is attracting “stoolies” — Barstool fans. Penn paid $163 million in cash and equity for a 36 percent stake in the sports media property. While some analysts initially balked at that outlay, they’ve come to embrace the advantages of Portnoy being the face of Penn.

Other hurdles for Barstool Sportsbook to clear include proving to the investment community that its customer base is sticky. While the sports betting industry is chock full of recognizable brands, customer loyalty is a different ballgame.

Typically, sharp bettors shop for the best odds and books that will regularly accept large wagers without limiting clients when they win. On the other hand, recreational gamblers are usually enthralled by signup bonuses, but they aren’t known for being brand-devoted, particularly after they deplete their accounts.