Penn paid $550 million for Barstool, then sold it back for $1

Added: 2026-05-18

[00:00:00]A highly regulated casino company paid $550 million for an online sports media company and then sold it back to the founder 3 years later for $1. During the sports betting gold rush back in the 2019 to 2023 era, Penn Gaming bought Barstool Sports with the hope of cheating the system and not having to outspend FanDuel and the other sports books to get customers. The thesis was that Barstool Sports already had the eyeballs of millions of young men, the type of people that sports books online were desperate to get as customers.

[00:00:29]Paper, it was brilliant. But it turned out Penn Gaming didn't really understand what they bought. First sign was that there were allegations against the founder, Dave Portnoy, which ended up going pretty much nowhere. But it caused all the regulators across the country to basically start to investigate them and understand why Penn Gaming was betting their process on so much edgy content.

[00:00:49]When folks like the Ohio regulators fined Barstool $250,000 and New York excluded them completely, basically the Penn Gaming stock started to feel the brunt of it and the value dropped 20% in a week. So, Barstool's edgy brand that originally brought lots of bettors to try their new app and eventually propelled them to 42% market share started to decline over time when those same customers were getting pulled away by better deals from FanDuel and DraftKings. Eventually, Penn Sports online gambling enterprise dropped to less than 5% market share and they walked away with their tail between their legs. Penn Gaming would end up blowing $4 billion on online gambling forays including with Barstool Sports and in the end end up exactly where they started in the first place and pretty much dead last. Full video on the rise and fall of the acquisition of Barstool by Penn Gaming.

[00:01:38]It's a long-form video from this here Drainage Stitch on my channel. Check it out in the comments below on my bio page.