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Monday, May 20, 2024

Penn Clashes With Barstool After Firing, Earnings Miss

  • Penn Entertainment's stock slid 13.3% after earnings per share came in below expectations and the company had a public spat with Barstool.
  • The company completed its $551 million acquisition of Barstool in February.
Barstool Sportsbook is owned by Penn Entertainment.
Paul Kuehnel via Imagn

An earnings miss and a spat with a subsidiary company led to heavy losses for Penn Entertainment.

Penn released its earnings report shortly after the company overrode Barstool executives to fire host Ben Mintz, who uttered a racial slur while reading song lyrics on a Barstool show.

The firing was announced on Wednesday, and on the following day, Penn’s stock plummeted 13.3%, which Barstool founder Dave Portnoy attributed to Mintz’s firing. Penn completed its acquisition of Barstool in February for a total of $551 million.

Penn brought in $1.67 billion in the first quarter, up 7% year-over-year, with net income growing from $51.6 million to $514.4 million.

The casino and gaming company’s revenue beat expectations but missed significantly on earnings per share.

A general view outside of the TD Garden in Boston with the Zakim Bridge in the background.

Massachusetts Online Sports Betting Goes Live

The state carries a “very competitive” 20% online sports betting tax rate.
March 10, 2023

Regulator Watch

It’s possible Penn is being cautious about Barstool’s content after it drew scrutiny from Massachusetts’ gaming commission for its history of racist and misogynistic content, though regulators ultimately awarded the company permission to operate a sportsbook there.

“I’m having a hard time reconciling branding a sportsbook in Massachusetts … that I have concerns [for] not only responsible gaming, but simply the character and reputation and honesty of [that brand],” said state commissioner Eileen O’Brien.

Penn’s sportsbook began operating in Massachusetts and Ohio in Q1.

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