The Pennsylvania launch last month of the Barstool Sportsbook app was described by Penn National Gaming officials Thursday morning as a huge success that out-performed nearly all of the gaming company’s goals.
In a third-quarter earnings call with investment analysts, Penn National CEO Jay Snowden said Pennsylvania’s 10th online sportsbook is generating a high volume of new and younger customers without the company needing to spend any money on traditional advertising.
“We set internal goals when we launched the app in Pennsylvania,” he noted in the conference call. “Based on where we are today, we exceeded every one of our goals,” although he quickly added that live, in-game betting is less than had been projected.
Barstool Sportsbook officially launched Sept. 18 for public use after a three-day, invitation-only test period. It can be downloaded across the country, but can only accept real-money wagers in Pennsylvania.
Penn National opted to debut the site in the state where it is headquartered, but plans to market it next in Michigan as soon as regulators allow — possibly by year’s end — and then in 2021 in all of the other jurisdictions where mobile sports betting is authorized and it has existing operations.
PNG finds 95% of the bettors are new to it
Penn National revealed various details about early use of the app, which it has relied on its business partner, the Barstool Sports multi-channel media site, to heavily promote rather than joining in the ubiquitous TV/radio advertising of key competitors such as FanDuel and DraftKings.
Through Oct. 24, it reported 48,000 registrations in Pennsylvania and 30,000 first-time depositors. Its total betting handle through that date was $78 million, by taking wagers that averaged $62. The app has been downloaded far more nationally, a total of 310,000 times, even though those outside Pennsylvania can’t use it.
Both nationally and within the state, Snowden stressed, 95% of those signing up were individuals entirely new to Penn National, rather than among the millions in its existing MyChoice rewards database.
“In terms of acquisition of new customers to the brand, what a success story,” he said. “That is big news for us.”
And he said 80% of those betting on the app are between the ages of 21 and 34, which is far younger than the company’s traditional customers.
Without making any future predictions, Snowden pointed to all of the early signs as positive while acknowledging, “We’re still in the first inning. We’re learning a lot in terms of what works.”
Bet per day is down in October, but revenue is up
The official September revenue figures for Pennsylvania sports wagering reported by the Pennsylvania Gaming Control Board showed the Barstool Sportsbook handling $29.9 million in wagers, compared to $168 million by FanDuel and $116.5 million by DraftKings. Barstool was only operating for about half the month, but among the 10 sites it was quickly in third-place position in terms of handle, taking 7.2% of the state’s $414.1 million wagered online.
The site’s handle and percentage will increase in October, although the company figures released Thursday also showed its betting volume per day is slowing down. Snowden attributed that to the high level of promotional credits that had been utilized among all the new customers in September. As is similar to offers from other sites, Barstool’s new players can take advantage of a risk-free first bet of up to $500. It also offers a $10 free bet to everyone signing up.
Penn National reported $48.4 million in Barstool Sportsbook handle in the first 24 days of October, compared to $29.9 million over 13 days in September.
At the same time, the reduced utilization of promotional credits has bolstered revenue performance. The sportsbook actually lost money in September, a total of $2.8 million with $2.2 million of that coming from free credits, while it reported being $3.1 million ahead in October after giving out $1.4 million in credits.
“The impressive results have been without any meaningful external marketing spend,” Snowden emphasized about the site’s early track record. “We should be able to achieve top three marketing position in the states where we operate.”
Sports bettors help company overall
Snowden said other Penn National operations will build upon the strong Barstool Sportsbook online start. Those include rebranding its retail sportsbooks with the Barstool name across the country and at some point opening Barstool-branded entertainment centers, similar to a sports bar/nightclub combination, in various metropolitan areas.
Already, he said, the company has recognized how the addition of sports betting customers helps the rest of the casino company’s operations.
At one casino that added a retail sportsbook, Snowden said, it helped boost food and beverage revenue by 20% and table games volume by the same amount. By adapting the Barstool brand to its sportsbooks, such impact should only increase, he said.
The optimism comes at the same time Penn National reported the third quarter of 2020 was a strong one overall for the company, despite the impact the COVID-19 pandemic continues to have in limiting capacity and amenities in casinos.
The company reported revenue across its 41 properties in 19 states at $1.13 billion for July-September, compared to $1.35 billion in the same three months a year ago. Income was $141.2 million, compared to $43.7 million a year ago, and its quarterly adjusted EBITDAR was at an all-time high of $452.6 million.
While the uncertainties surrounding the coronavirus make it hard to guarantee anything about the future, Snowden said, “All I know is we are very comfortable with where our business is today.”
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