Barstool's Impending Expansion Includes Indiana and New Jersey

One of the most hyped “newish” US legal sports betting brands, Barstool Sportsbook revealed plans to go live in two Heavyweight states by the end of May in an interview on CNBC‘s Squawk Box Tuesday. According to Penn National CEO Jay Snowden, the Barstool betting app is ready to go live in two of the top 5 bet-friendly states, afterword a few weeks ago that the company has gained market access to New York if and when mobile betting is legalized in that state.

Already live in Pennsylvania, Michigan and Illinois, Barstool is making good on its commitment to have an app presence in at least 10 legal sports betting states this year. “We’re going to be live in Indiana by the end of April, we’re going to be live in New Jersey probably by the end of May, and then another slew of three or four states probably by the start of football season,” Snowden said.

The Plan

Barstool Sportsbook, in a recent earnings call committed to being live in at least 10 states by the end of 2021 and has set out a plan to launch in a new market every month or so in order to reach that goal.

Launching in Indiana and New Jersey is a very good start on their path to rapid expansion. New Jersey has consistently come in as the top producing sports betting state and Indiana's platform has been nothing short of remarkable since its launch. There seems to be plenty to go around in those states despite near-saturation in those markets.

The plan for Barstool sportsbook is to be live in time to capture the bonanza of legal sports betting wagers seen during a typical NFL season. It is an ambitious timeline, but the company has seemingly gotten better at their rollout as demonstrated by their Michigan and Illinois launches earlier this year.

What's Next?

Penn National's sports betting reach is among the more impressive in the US legal sports betting scene. They have access to a host of states that currently have or are working on bringing about a betting platform of their own. Parent company Penn National has a lot to do with that.

Realistically, the markets that Barstool is looking to target are ones with up-and-running robust platforms already. Colorado, Tennessee, Virginia, Iowa and West Virginia seem to be in lead in terms of potential destinations for the Barstool brand. Each of these states have outperformed their projections and have no reason to think a huge drop-off for their platforms are imminent.

Penn National's ability earlier this month to secure one of the up to 12 mobile-only betting licenses in Virginia gives a good hint as to which destination could be next for the sportsbook.

A Peek at Penn National stock

Penn National stock has followed a trend of incredibly high market values for publicly traded sports betting companies in the US. Despite a small slump Wednesday, when share prices fell about 5%, Penn National stock, thanks in part to the Barstool brand is up 10X from its value just 12 months ago. It currently sits at about $110 per share.

“What we’re seeing right now in the business is revenues and volumes that I haven’t seen in years,” Snowden said. “The month of March has been incredible.”

The potential to further spike remains high and most analysts are bullish on where stock like Penn National can go in 2021. Jefferies analyst David Katz highlighted the fact that the majority of Americans are still unable to place a sports bet legally and the potential for growth in that metric.

"Among active bettors, 40 percent have wagered over $50 in the past 12 months. We note that US sports betting remains in very early innings,” said Katz recently. “Roughly 41 percent of the US population have access to legalized sports betting, while only 27 percent with access to legalized OSB. With more states continuing to legalize and launch sports betting, we expect penetration will grow meaningfully over time.”

Unique Position

The Barstool sportsbook has carved out a unique path toward dominance in the US legal sports betting world. Prior to launching their own sportsbook, Barstool boasted 66 million dedicated viewers as well as 8.8 million Instagram followers, almost 5 million on Facebook, and 2.5 million on Twitter nationally.

Barstool has been able to parlay those numbers into becoming the #3-ranked provider in Michigan and Pennsylvania - they slid to fourth in Michigan in February.

The key for Barstool will be to hold on to the market share they generate immediately after launch in certain jurisdictions. In Michigan, their brand captured a 23.9% market share the first 10-days after launch in February but ended the month with a 13.3% share.

Attracting customers doesn't seem to be a problem but keeping them in the fold seems it will be Barstool’s challenge as the US legal sports betting scene becomes more competitive and more saturated.

It is going to be a busy 2021 for Barstool. Get used to seeing their name in the industry news.