Under Dave Portnoy’s leadership, Barstool Sports has been the subject of many controversies. Not much has changed since Penn Entertainment fully acquired the sports media company in February.
Prior to Penn’s Q1 earnings call, Penn made the decision to fire a popular Barstool employee, Ben Mintz, who rapped song lyrics that contained a racial slur.
Now that Barstool is under the Penn umbrella, Portnoy and company CEO Erika Nardini have lost the power to make some key decisions within the brand. Because Barstool is now in a regulated industry, decisions are much more cut and dry.
Barstool Sportsbook, which operates within the PA online sports betting market, has made it difficult for Penn to exist in the regulated industry.
Can the partnership remain intact?
What happened with Barstool employee Ben Mintz?
Ben Mintz is a fairly well-known Barstool personality. He hosts podcasts for the company and while on his livestream, Mintz rapped song lyrics that contained a racial slur.
Mintz was subsequently fired from Barstool, in a move that likely came from someone higher than Portnoy and Nardini. Losing that kind of power is not something the company is used to. However, they gave that up when allowing Penn to buy them out.
During the earnings call, Penn CEO Jay Snowden briefly addressed the incident. He said:
“It’s something that happened inside the company that we dealt with. We felt like we dealt with it appropriately.”
In a Twitter rant minutes before the earnings call, Portnoy openly disagreed with the decision to fire Mintz.
“Not in my wildest dreams did I think I’d be sitting here saying we had to fire Ben Mintz,” Portnoy said on Twitter. “Penn felt differently, and I’m stunned by it. I’ve been fighting tooth and nail, as has Erika, as has Dan [Katz], to keep Ben and say this is the wrong decision.”
Nardini boasted on the earnings call that Barstool is a “company that’s authentic, it’s a company that’s unapologetic.” As Barstool continues to be as “unapologetic” as it wants, it clearly does not have the same decision-making power it once had.
Regulated sports betting industry impacting Barstool
It’s clear that Portnoy and the rest of the Barstool team wouldn’t have fired Mintz.
Though Snowden didn’t discuss the situation much on the earnings call, Portnoy offered some intel on what Snowden told him.
“Penn is convinced there is a legitimate chance lots of the states would pull their licenses because of this,” Portnoy said. “Penn is a multi-billion dollar company and without their licenses, they’re a zero dollar company.”
“I told them, if this was me and the state wanted to pull a license because of this I’d put it on blast 100-fold. And I’d be like ‘this is what we’re dealing with?’ And our crowd would rally and we’d become stronger. [Snowden] said ‘you know what that’ll do? They’ll just pull the license everywhere potentially.’”
Penn operates the Barstool Sportsbook in Pennsylvania. PlayPennsylvania asked the Pennsylvania Gaming Control Board (PGCB) whether the relationship between Barstool and Penn threatens responsible gambling and the regulated industry. Doug Harbach, PGCB Director of Communications, answered with this statement:
“That would take some discussion internally, but since Mintz… like Portnoy… are not licensed by us… not sure there is relevance to a PN license.”
By that statement, the PGCB is treating Barstool’s relationship to Penn as a separate entity, since Penn actually owns the license. Portnoy’s name is not included in the license application that was approved in Pennsylvania.
Other Barstool controversies within the regulated gaming industry
This is not the first time Barstool has blurred the lines in the regulated gaming industry.
During March Madness, Dan Katz started destroying a table with a baseball bat after losing a bet.
The violence shown in the tweet leads viewers to believe that type of behavior is acceptable. Keith Whyte, Executive Director of National Council of Problem Gambling (NCPG), told PlayPennsylvania in March:
“Implicitly promoting or normalizing extreme anger after losing a bet is irresponsible messaging.”
Back in February, Barstool Sportsbook also accepted a $250,000 fine for promoting its sportsbook app during an event aimed toward college students. The event took place near the University of Toledo in November.
Barstool has toed the responsible gambling, and even ethical lines, since Portnoy founded the company back in 2003. They have now become Penn Entertainment’s conundrum.
Penn stock dips following controversy
Following the release of its earnings report and the Barstool controversy, the Penn stock closed at $30 on May 3. On May 4, the price dropped to $28.50 when the market opened and dipped to $26.20 by the end of the day. The price sits at $26.54 as of Friday afternoon.
Portnoy tweeted a screenshot of the stock and said “That’s Mintzy,” in regards to the price dropping.