As part of its separation from Penn Entertainment last year, Barstool was prohibited from partnering with another sportsbook until the end of the NFL season. Less than an hour after the Kansas City Chiefs beat the San Francisco 49ers in the Super Bowl, Barstool owner Dave Portnoy posted a video on Twitter announcing the partnership.
“We’re back to our roots,” Portnoy said in the post. “[DraftKings] is once again the exclusive betting partner of Barstool Sports.”
Sportico reported last month that the two sides were close to a deal a traditional marketing partnership. There will be no Barstool-branded sportsbook, Sportico reported at the time, but Barstool will promote DraftKings odds and benefit from customers referred to the sportsbook.
Terms of the deal were not announced. A representative for DraftKings didn’t immediately respond to a request for comment.
To kick off the partnership, Portnoy announced that he and other Barstool personalities will run a live free throw contest on Monday, with a DraftKings companion fantasy game that carries $100,000 in prizes. The contest will utilize a social media format that Barstool and others have popularized recently–athletic contests that could take hours or days to complete, streamed live for fans–layering in a way for those watching to win money depending on the outcome.
The news comes less than a year after gaming giant Penn (Nasdaq: PENN) sold Barstool back to Portnoy for $1. Penn initially paid $163 million for 36% of Barstool, then bought the other 64% for $388 million, all part of a plan to utilize Barstool’s name and avid core of consumers to build a sustainable betting app (Barstool Sportsbook). Those plans didn’t come to fruition, and in August Penn unloaded Barstool for $1 in order to partner with a different sports media brand (ESPN) for a newly named sportsbook (ESPN Bet). Penn later reported an $850 million write-off on the Barstool acquisition.
The sale back to Portnoy included “certain non-compete and other restrictive covenants,” Penn said at the time. It included a clause that Penn would receive 50% of the gross proceeds if Portnoy sells the company in the future. Barstool was also prevented from getting back into betting before the end of this NFL season, including playoffs, according to sources.
Betting is part of Barstool’s origin story. The company started in 2003 as a weekly betting and fantasy pamphlet that Portnoy distributed for free. Gambling advice and picks remain a critical part of Barstool’s content, but for the past few months there’s been no sponsor to mention and the company isn’t sharing in the upside of directing its audience to any particular sportsbook. Portnoy’s video announcing the DraftKings deal alluded to a previous partnership between the two companies forged a decade ago.
Marketing deals with media companies are one of the principal ways that sportsbooks maintain name recognition and attract new customers, and a central part of the media strategy for many gambling operators. DraftKings in 2021 bought Vegas Stats & Information Network (VSiN), a gambling media company, and it partners with a number of prominent sports podcasts, including The Dan LeBatard Show With Stugotz, Pablo Torre Finds Out, and All The Smoke. It also had a pricey deal with ESPN that was terminated last year as part of ESPN’s tie-up with Penn Entertainment to launch ESPN Bet.
For those keeping track: Penn ditched Barstool to commit roughly $2 billion to launching ESPN Bet. As part of that deal, ESPN ended its marketing partnership with DraftKings, which subsequently began talks on a marketing deal with Barstool.
DraftKings spent $1.19 billion on “sales and marketing” in fiscal 2022, and is on pace to top that number when it declares 2023’s year-end numbers next month. That said, its most recent quarter was the first time in more than three years that its quarterly marketing spend dropped year-over-year. It’s unclear how much the ESPN deal coming off the books impacted that figure.