MA regulators voice concerns over Barstool Sportsbook and Portnoy

MGC suitability Barstool Sportsbook
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Public meetings to approve operators have become par for the course in US gambling, but Tuesday’s meeting of the Massachusetts Gaming Commission to discuss the sports betting license application of Penn Entertainment’s Plainridge Park Casino was anything but ordinary.

Rather than rubber stamp the brick-and-mortar facility for retail and online operations, the commission took time to ask some very serious questions about responsible gambling and suitability. By the end of a long meeting, the group convened into a private executive session to discuss the matter further with Penn and Plainridge Park representatives. While a vote was expected today, MGC has delayed the vote on the application until next week.

NYT story on Penn, Barstool, and Portnoy sparked the discussion

At the center of the debate was a recent story in the New York Times specifically about Penn’s relationship with Barstool Sports. Titled “Desperate for Growth, Aging Casino Company Embraced ‘Degenerate Gambler'”, the piece detailed the history of the partnership and what some in the industry labeled a blase approach to responsible gambling. It also went into great detail about Barstool’s founder, Dave Portnoy, including his history with problem gambling, recurring personal tax liens, and sexual assault allegations.

Various commissioners expressed concern about the article, the allegations, and how it impacts their job, which is to evaluate the suitability of Plainridge Park’s application.

Commissioner Eileen O’Brien questioned Penn representatives about a specific incident in the article when Portnoy and other Barstool personalities hosted a tailgate event near the University of Tennessee campus during a college football game. Even though the Penn team clarified the event did not take place on campus and argued tailgates are as much about alumni as current students, especially in the South. Nonetheless, O’Brien found the combined promotion of sports betting and alcohol around a collegiate sports event troubling.

“I’m disturbed by that and then I’d love to have a conversation about how the company is addressing those types of things,” O’Brien said.

Penn emphasized difference between Barstool Media and Barstool Sportsbook

Penn representatives acknowledged her concern but offered several justifications as to why this single incident is not indicative of Plainridge Park and its plans for Barstool Sportsbook in Massachusetts. Penn Entertainment Chief Compliance Officer Chris Soriano offered an argument that gets brought up frequently in Barstool Sportsbook debates, which is that there is a distinct difference between Barstool Media and the Penn entity Barstool Sportsbook.

“I think one of the important things to keep in mind was this was the Barstool College Football Show which was broadcast from there,” Soriano argued. “There was no sportsbook advertising. This was Barstool Media. So this was not a Barstool Sportsbook. This was not the gaming operation. And so it was a more generic college football program rather than specifically targeted for school sportsbook-type promotion.”

How to handle betting and college sports is an industry-wide problem

Erin Chamberlin, who serves as Senior VP of Regional Operations for Penn also pointed out this is a problem that is not specific to Barstool, but something the entire industry is grappling with.

“I think that the entire industry is looking at, and it’s an important point for the entire industry. My point being is this question could be asked and this dialogue could take place around many others, not just us,” she said. Chamberlin also carefully brought up the fact that other competitors like Caesars and PointsBet have inked sponsorship deals with universities.

“I think one of the things that I would point out, and I don’t want to cast stones at any of the competition, but what we are not doing is specifically sponsoring any colleges or universities from marketing perspective with any sports betting agreement,” she added. “You have not seen Penn Entertainment enter into any of those types of agreements, very purposely.”

It is worth noting that Barstool did draw criticism for its title sponsorship of the Arizona Bowl. This was another instance in which the sponsorship was not part of of Barstool Sportsbook, but rather the media arm of the brand, with the official name of Barstool Sports Arizona Bowl. Other sponsors pulled out of the event after the announcement Barstool would be the title sponsor.

Soriano acknowledged the combination of media and sports gambling is a difficult one to manage but one that Penn takes very seriously.

“Barstool is a company that is very active in the media space. It’s certainly on lots of different platforms and lots of different places. Something like over 100 different channels of distribution, podcasts, 90-some-odd personalities we’ve undertaken since we became affiliated with Barstool, since we became a part-owner of Barstool. One of the things that we did was impose really strict compliance guardrails on what it is Barstool does. We regularly train, we regularly coordinate with Barstool,” he told the commission.

Chamberlin echoed the company’s dedication to responsible gambling and also spoke to some of the custom responsible gambling messaging the Barstool team has produced. She called it an “innovative approach to responsible gambling” and suggested the irreverent tone speaks more effectively to younger bettors.

MGC commissioners will meet with Penn reps during closed-door executive session

MGC Chairman Cathy Judd-Stein pushed back on Chamberlain’s characterization of the brand.

“Are we being genuine here? Because I came across the article because you brought it to the attention of the MGC Investigation and Enforcement Bureau (IEB). I don’t believe you would have brought it to the attention of the IEB if you thought that they, and I am using they because you’re using the word they, that your spokespeople for Barstool are advocates for responsible gambling? If that was the case, why would you bring that article to the attention of IEB? So there’s some risk attached to that article,” Judd-Stein argued.

Northscott Grounsell, the General Manager at Plainridge Park, did note that Penn and Plainridge Park have always been very proactive with regulators regarding issues, bringing them to the table if there is even the whiff of a problem. Grounsell said the New York Times story was just another example of trying to maintain a very transparent and honest relationship with the MGC.

Even with that explanation, Judd-Stein and the other commissioners remained deeply concerned about the issue and made that apparent as the meeting wound down.

“I just want to make sure we’re all being very, very clear here that the regulators in Massachusetts are really at a crossroads because the timing of this article is such that we are having these conversations. So now we have an obligation to reconcile what is very available publicly as to Barstool and, really, the significant personality attached to Barstool, and what we are going to do about it as we think about this application,” Judd-Stein said.

Judd-Stein and the entire group of commissioners also went out of their way to recognize the efforts of Plainridge Park when it comes to responsible gambling and being a good community partner. Judd-Stein even stated that the application is “A++” were it not for the involvement of the Barstool brand.

The commissioners had an opportunity to speak behind closed doors with Penn about just how much of their audience is in the underage demographic. The issue of suitability and how it relates to Portnoy also seemed to be an issue for the executive session docket.

MGC has repeatedly shown it is willing to take time to come to a decision, so the postponement of a vote to next week was unsurprising, particularly given what a large decision they are facing regarding Plainridge Park and its sports betting license.