Barstool Sportsbook in New York? Penn National Inks Deal for Online Skin, But Hurdles Remain for All Operators

Penn National’s latest market access deal adds another major player to the New York sports betting market, even if the company – or any other sportsbook operator – is far from guaranteed an online license.

Penn’s “second skin” agreement with Rivers Casino & Resort in Schenectady would grant Barstool Sports’ partner company a chance to open an online sportsbook in what would be the most lucrative sports betting market in America. Barstool Sportsbook accepts bets in Pennsylvania and Michigan, expects a March launch in Illinois, and to go live in as many as seven more states by the end of 2021.

Barstool’s loyal following all but guarantees another major player for market dominance in New York, which would be the most populated state to legalize sports betting.

That is if Manhattan-based Barstool Sports can ever actually take a bet in its home state.

Online sports betting is still illegal in New York and Penn National is not partnered with any of the upstate commercial casinos or Native American tribal casinos allowed to take retail wagers.

A 2021 sports betting bill would allow as many as 14 online licenses, or “skins,” opening the door for a company such as Penn National. However, that legislation conflicts with Gov. Andrew Cuomo’s limited operator proposal that could keep out Penn (and nearly every other operator).

The obstacles aside, Penn’s preemptive agreement adds another high-profile name to the New York online sports betting race. This amplifies political pressure and lobbying influence for a competitive market favored by lawmakers instead of the restricted model proposed by the governor.

It remains to be seen how policymakers would approve statewide mobile wagering or if they can reach consensus on the legislation to do so, but Penn National and its growing Barstool brand raise the stakes for 2021’s biggest sports betting prize.

Potential New York Online Sportsbooks

Lawmakers introduced a bill earlier this year that would allow the state’s four commercial casinos and three Native American gaming tribes to open two online sportsbooks apiece. All seven entities already have at least one retail partner in place, which sets up market access for the following brands should the bill pass:

• DraftKings (partnered with del Lago Resort)
• Bet365 (partnered with Resorts World Catskills)
• FanDuel (partnered with Tioga Downs & Casinos)
• BetRivers (partnered with Rivers Casino & Resort – would give Penn National/Barstool its second skin if allowed to under state law)
• Kambi (partnered with the Seneca Tribe, which also has partnerships with Unibet in other states)
• Caesars / William Hill (partnered with Oneida Indian Nation)
• Stars Group (partnered with Saint Regis Mohawk Tribe, which operates retail betting with IGT’s PlaySports technology. The Stars Group also owns FOX Bet)

Additionally, MGM owns Yonkers Raceway & Empire City Casino, ostensibly as a foothold for a hypothetical BetMGM sportsbook or iGaming product, though the current legislation wouldn’t grant the company market access via the racetrack.

Cuomo’s plan calls for “one or more” licenses to be bid between the casino’s existing sportsbook partners. It’s not clear if that means just the existing, primary retail partners or if a secondary partner such as Penn National would be eligible as well.

Next Steps for New York Online Sports Betting

The Barstool Sportsbook in New York depends on legislation percolating in Albany.

Lawmakers advanced the multi-operator model bills out of the respective racing committees in both the Assembly and Senate but are still waiting for further committee votes before they can go before the full floor in either chamber. Cuomo’s support for the limited-operator model looms large over sports betting hopes, even though the multi-operator bill is being spearheaded by fellow Democrats.

It remains to be seen if negative headlines surrounding Cuomo’s COVID-19 response will dent the influential governor as he gears up to campaign for what would be his fourth term as New York’s chief executive. With both his intangible power as the state’s most prominent Democrat and his literal power to veto legislation, the legislature’s sports betting backers still need to appease Cuomo for any mobile sports wagering bill to pass this year.

Cuomo warmed up to mobile wagering as one small solution to the state’s $15 billion budget shortfall, which by state law must be rectified by April 1. Policymakers are still debating a host of additional internal budgetary issues while awaiting federal aid still tied up in Congress.

If other state-level proposals such as recreational marijuana legalization or federal budget aid falter or fall short of expectations, elected officials may have no choice but to take on a more aggressive sports betting model to fill the budget gap. This sets up a tense next few months for New York leaders in both Albany and Washington D.C.

In the meantime, Penn National’s market access deal assures another major sports betting operator will work to enter New York even as the legislative framework for doing so remains far from certain.