The regulator of sports betting in Massachusetts has made its peace — to an extent — with the gaming company tied to a sometimes-controversial media brand.
Members of the Massachusetts Gaming Commission (MGC) resumed their work on Tuesday regarding an application filed for a legal sports betting license for a casino operated by PENN Entertainment Inc.
Wyomissing, Pa.-based PENN was seeking an in-person sports betting license for Plainridge Park Casino in Plainville, Ma. And, while the MGC ultimately gave the casino the approval it needs to eventually obtain that license, it only did so after another lengthy discussion about the company the casino operator keeps.
Massachusetts regulators initially deferred a decision earlier this month on Plainridge Park’s application for a “Category 1” license, which would allow it to offer event wagering at the facility and through two online sports betting sites that would require a separate "Category 3" license to operate.
Although commissioners were fine with most of the application, the MGC got hung up on PENN’s responsible-gaming efforts and its ties to Barstool Sports.
Stuck on a Barstool
PENN bought a 36% stake in Barstool Sports in February 2020, and then, in August 2022, PENN exercised its rights to buy Barstool entirely. The acquisition of those remaining Barstool shares is expected to close in February, PENN said in recent financial filings, which will make the digital-media company a wholly-owned subsidiary of PENN.
The transaction granted PENN the right to use the Barstool Sports brand for its sports-betting operations, which it does for both its retail and mobile-wagering efforts. PENN plans to do the same in Massachusetts.
Barstool, though, has attracted controversy since PENN’s purchase. The controversy culminated in a recent series by the New York Times that included an unflattering story focused on PENN’s alliance with Barstool that landed just as the MGC was preparing to review sports-betting applications.
PENN CEO Jay Snowden appeared before the MGC on Tuesday to try to explain their plans and to put commissioners at ease with licensing the company. Snowden started by distinguishing Barstool Sports, the media brand, and Barstool Sportsbook, PENN's betting brand.
“To be clear, neither [Barstool Sports founder] David Portnoy nor anyone else at Barstool has any control or decisionmaking authority over the operations at either the retail or online operations of Barstool Sportsbook,” Snowden said. “All decisions, directions, and influence over the operations of sports betting are made entirely by PENN team members who are authorized to do so and are licensed to do so as required.”
'We are not perfect'
Barstool is PENN's media and marketing partner and will remain as such once PENN acquires 100% of Barstool in February, Snowden added. Barstool Sports, he said, is made up of “entertainers” who sometimes create “edgy, adult-oriented” content.
Snowden told the commission that PENN put in place "meaningful compliance guardrails" when it bought into Barstool. Snowden stressed other responsible-gaming credentials as well and claimed there were inaccuracies in the New York Times' reporting.
The PENN CEO also touched on Barstool's college football show, which recently earned the ire of the Ohio Casino Control Commission due to the show taking place on a state college campus and advertising Barstool Sportsbook. Going forward, Snowden said Barstool will restrict live-audience access to the show to only those aged 21 and older.
“Again, we are not perfect, but we own up to our mistakes and we try very hard not to repeat any of them,” Snowden said.
Continuing concerns
Snowden’s remarks weren't enough to avoid further pushback from the MGC. Commissioner Eileen O’Brien, for instance, said she still had concerns about the PENN-Barstool relationship “that go not only into responsible gaming," but also the character, integrity, and reputation of the gaming company.
The unease of the MGC was evident in how they ultimately decided to proceed with the application for Plainridge Park Casino’s Category 1 license. While the commissioners voted in favor of finding that the company connected to Plainridge Park had satisfied the criteria for a retail sports betting permit, they found only that the casino was preliminarily suited for a license and attached a few unique conditions to the approval.
The first condition was something PENN and Barstool were already prepared to do, which is to bar anyone under the age of 21 from attending Barstool's college football show. The second was that PENN must fully cooperate with the regulator on an investigation of Barstool Sports in connection with the branding for its sportsbook.
Snowden told the commission they would cooperate with the investigation and that they were fine with the preliminary finding, as long as it provided PENN with temporary licenses that would allow it to take bets on the first day of legal retail and online sports betting in the state. The finding of preliminary suitability by the MGC does allow PENN to apply for a temporary license for sports betting at Plainridge Park Casino (PPC).
"PPC is now eligible to request a temporary license to conduct sports wagering while a full suitability review is undertaken by the MGC," the regulator said in a press release. "Following a temporary license being granted, PPC must obtain an operations certificate and meet additional conditions before they can accept wagers on approved sporting events. More information on a universal launch for retail wagering, followed by online wagering will be released as it becomes available."
MGC Press Release: Massachusetts Gaming Commission Votes to Award MGM Springfield with a Category 1 Sports Wagering Operator License pic.twitter.com/EAF7reHIu9
— MA Gaming Commission (@MassGamingComm) December 19, 2022
Tuesday’s work by the MGC now means that the state’s three casinos have key approvals for their sports-betting licenses in hand, keeping them on track to start taking in-person wagers at their properties in late January, the target start date for regulators.
Plainridge Park, MGM Springfield, and Encore Boston Harbor all received approvals from the MGC this month that have them poised to be ready on the first day of legal sports betting in Massachusetts.
“So this moves you forward,” MGC Chair Cathy Judd-Stein said after the unanimous vote on Plainridge Park's application. “And we will monitor the investigation to keep it going along. My hope is that we all learn a whole lot.”
Moreover, the MGC has given key approvals to three online sportsbook operators that are linked to the brick-and-mortar casinos: BetMGM, Caesars Sportsbook, and WynnBET. Statewide mobile sports wagering isn’t scheduled to start in Massachusetts until March, though.
The MGC decided to punt the applications for Plainridge Park’s mobile sports betting partners to the New Year. It is then that the commissioners will more deeply probe the suitability of Barstool Sportsbook and Fanatics.
However, the MGC will meet again this week to discuss more sports betting-related regulations, including disciplinary rules.
