The ten-year-old sports betting collaboration between Barstool and DraftKings: Understanding the reasons behind its continual agreement extension
Barstool Switches to DraftKings for Sports Betting
After partnering with gambling company PENN for their sports betting service Barstool Sportsbook since 2020, U.S. media firm Barstool Sports has called it quits. This decision came after PENN merged with TV network ESPN.
According to an article in online magazine iGaming Business, Barstool founder David Portnoy used his buyback option to regain his site's independence.
Deal Announced Post-Super Bowl
However, Portnoy was bound by contract not to engage in sports betting until the Super Bowl concluded. In the shadows, a deal between Barstool and DraftKings was being finalized, which was revealed shortly after the end of the football championship.
On Barstool's site, Portnoy conveyed his excitement when announcing the deal:
I'm stoked to announce that Barstool has signed a multi-year mega-deal with DraftKings. We're returning to our roots. DraftKings is once again Barstool Sports' exclusive sports betting partner. – David Portnoy, Barstool Sports founder, as reported in Barstool Sports
The fine print of the collaboration hasn't been disclosed yet, and DraftKings hasn't issued an official statement about it either.
Can DraftKings Take the Lead in U.S. Market?
The U.S. market for sports betting is dominated by providers FanDuel and DraftKings, with a combined share of approximate 80%. FanDuel holds a 10% lead over DraftKings.
The new sports betting service from ESPN and PENN, nicknamed ESPN Bet, which saw record download numbers at launch, might aim to challenge this supremacy and carve out a piece of the market.
However, DraftKings CEO Jason Robins expressed confidence last year, claiming to be unintimidated by upcoming competition. It's plausible that negotiations with Barstool were underway at that time, providing an explanation for his assertion.
In any case, the deal with Barstool could expand DraftKings' reach, as Barstool community members would be introduced to DraftKings as their exclusive sports betting partner, rather than the creation of a new brand.
Giant Clash on the Horizon
It remains to be seen if the balance of power in the U.S. sports betting sector will shift due to the association between Barstool Sports and DraftKings.
In 2024, it will be thrilling to witness if ESPN Bet manages to establish itself as a major third player. Meanwhile, FanDuel and DraftKings, it seems, will try to preserve their positions.
While DraftKings has roped in NBA legend LeBron James as a brand ambassador along with the Barstool deal, FanDuel is supported by the massive Flutter Entertainment Group, whose stock prices have never been higher since its NYSE listing.
The deal with DraftKings was announced on Barstool's site following the Super Bowl, making DraftKings once again Barstool Sports' exclusive sports betting partner. With this new partnership, DraftKings could potentially expand its reach within the U.S. sports betting market.
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