The recent surprise Barstool Sports deal with Penn Entertainment has raised concerns about the state of the regulated gambling market and could mark a cause for concern for the legal gambling sector. 

The deal, which saw Barstool Sports founder Dave Portnoy assume full control of the company for a bargain price of $1, has been seen by some as a loss for the regulated gambling market, with Portnoy’s future plans for the direction of the company being unsure.

Barstool Deal Shakes Up Online Sportsbook World

The Barstool deal, which comes at a time when the regulated gambling industry is facing increasing challenges, has sent shockwaves through the market. Barstool has gained notoriety for its brash brand of sports commentary and has built a dedicated fanbase. However, the company has struggled to navigate the complex landscape of the regulated gambling sector, which led to failed gambling licence applications and negative press coverage.

During an "emergency press conference" video shared on social media, Portnoy revealed the difficulties Barstool faced in operating within the regulated industry. He acknowledged that the company's content did not align well with the industry’s strict regulations and faced significant challenges from gambling regulators. These hurdles culminated in failed licence applications, falling stock prices, and negative media attention from reputable outlets.

Portnoy stated: 

“We underestimated just how tough it is for myself and Barstool to operate in a regulated world. With gambling regulators…[media] hit pieces…it was one step forward, two steps back. We got denied licences because of me. So the regulated industry? Probably not the best place for Barstool Sports.”

This move has significant implications for the regulated gambling market, as it highlights how the unregulated sector could take market share. With Barstool's ownership change, new opportunities and partnerships could arise. The allure of the unregulated market lies in its flexibility and freedom from the stringent regulations that have hindered Barstool Sports in recent years.

While Portnoy has fallen out with offshore bookmakers MyBookie after a public Twitter spat, the two companies used to work together before Barstool entered the regulated gambling market. If Portnoy’s experience with the regulators has soured his taste for promoting legal gambling operators in the US or provoked him to return to working alongside offshore bookmakers, it will go down as a loss for the legal sports betting industry as a whole given his influence in gambling.

The deal, which comes as Penn rebrands its casino and will have a sportsbook called ESPN Bet, not only underscores the challenges faced by companies operating in the regulated gambling market but also raises questions about the direction of the industry as a whole. 

However, it is important to note that the association between Barstool and ESPN has been a subject of controversy in the past. The cancellation of "Barstool Van Talk" in 2017, after just one episode, due to sexist attacks against ESPN correspondent Sam Ponder, highlighted the potential risks and challenges associated with the brand's unfiltered content.

Regulated Gambling Companies Need To Stay Competitive

As Portnoy takes full control of Barstool, the industry will closely observe the company's trajectory as an independent entity outside the realm of regulated gambling. With a unique brand of commentary and a devoted fanbase, Barstool Sports is sure to continue to captivate audiences and attract attention. The move signals a seismic shift in what is possible for sportsbooks and even online casinos. The lure of greater freedom and opportunities for entities is a strong one.

While Portnoy has fallen out with offshore bookmakers MyBookie after a public Twitter spat, the two companies used to work together before Barstool entered the regulated gambling market. If Portnoy’s experience with the regulators has soured his taste for promoting legal gambling operators in the US or provoked him to return to working alongside offshore bookmakers, it will go down as a loss for the legal sports betting industry as a whole given his influence in gambling.

Overall, the Barstool deal serves as a crucial turning point in the regulated gambling market. It underscores that as new companies enter the gambling space, one question remains. Is the industry is ready for this growth and transformation in the years to come? Operating within a regulated framework undoubtedly has benefits for gamblers. However, that does not mean that they will not place bets with an unregulated brand that they are already loyal to.

One thing is certain. As Portnoy himself said in his press conference, “It’s back to the pirate ship”.