Barstool Sportsbook has been better than others at turning bets into revenue across its young life.
According to recent figures from Penn National, Barstool Sportsbook has taken $660 million in handle in the seven months since it launched.
It turned those wagers into $61 million in gaming revenue, good for a 9.2% hold.
That is well clear of the average 7.2% hold across all states since the repeal of PASPA.
Outpacing DraftKings and FanDuel
A 2% difference might not sound much, but on that $660 million in handle, it is worth $13.2 million.
The hold rate is also well clear of the big two in US sports betting.
DraftKings is at 6.3% hold according to state by state data for 2020/21. FanDuel is at 7.5%.
Interestingly FanDuel recently talked up their hold rate at their recent Q1 results, pointing to the strength of their Same Game Parlay product.
What’s driving high hold for Barstool Sportsbook?
Penn gave some clues about the reasons for the high hold at its Q1 results:
- High adoption among casual bettors
- Custom parlays like the Dave Day Night Parlay
- Exclusive and “boosted’ bets
- Overindexing in younger bettors
The Sky Bet model
Interestingly, Penn CEO Jay Snowden said the operator was modeling itself after UK sportsbook Sky Bet, which also boasts a high hold rate.
Sky uses boosted odds and parlays, although it is perhaps best-known its wildly popular RequestABets.
“The lion’s share of bettors in our ecosystem are under 30. So we see a lower average bet size but higher hold rates. They are betting a lot of parlays, and recreational wagers. That’s what Sky Bet has been doing for a long time.
“Sky Bet also overindexes on hold. It’s still early, but life to date, our hold is higher than the competition and I think that’s because we have a younger, more casual bettor. And think about lifetime value. I’d rather have bettors under 25.”
Big NFL push for Barstool Sportsbook
Elsewhere, Snowden pledged to ramp up marketing ahead of this football season, with Barstool Sportsbook expected to be live in eight states.
However, he said that marketing spend would be concentrated on media outlets and “influencers” like Barstool, rather than TV and radio.
“I’ve been in PA all week and every TV commercial is sports betting,” Snowden said. “It’s overwhelming, you don’t even know who is advertising to you.
“We’re not going to play that game. That’s a very low ROI and you get customers with no loyalty.”
Dry marketing powder
Snowden said Barstool Sportsbook cost per acquisition (CPA) was under $100 in its three states so far, giving the company “dry powder” to spend this football season. For one comparison, PointsBet said this week it was satisfied with $500 CPAs.
Snowden was also asked about some of the concerning trends in monthly state-by-state data, but warned analysts not to read into those figures too much, especially out of football season.
“Dave Portnoy and Big Cat, their best sport is NFL which was coming to an end as we launched in Michigan,” Snowden said.
He promised better results come September, with increased marketing spend and learnings from the first season.