Barstool Sportsbook holds a major feather in their cap for the month of December, but they may not want you to know it.
Penn National Gaming (36% stakeholder of Barstool Sports) put forward a fantastic $13 million in total sportsbook revenue for the month of December in Pennsylvania. This is more than DraftKings and FanDuel combined. Backed by a 19.1 hold percentage, Barstool Sportsbook may be the most profitable sportsbook in the industry.
For those that are not familiar, a “hold” is the percentage of money that a sportsbook keeps for every dollar wagered. In order to calculate hold, you must understand how implied win probability works. A hold is essentially another word for “vig” (which itself is short for vigorish), which is a percentage of winnings taken by an operator. Typically, vigs range anywhere from 3-5 percent.
In laymen’s terms, Barstool Sportsbook’s 19.1 hold percentage is a huge number for a sportsbook. The average hold percentage is anywhere between 5-7 percent. A hold percentage nearing 20 percent is extremely irregular compared to the typical sportsbook’s hold. Barstool’s Pennsylvania sportsbook made more money per dollar in December than any other sportsbook in the state by a longshot.
Barstool Sportsbook had its first full month of operation as a sports betting company in December. Their substantial numbers in Pennsylvania are impressive but maybe something that they do not want to be advertised.
Is There A Reason For Barstool Sportsbook’s 19.1% Hold?
A hold percentage should always be over 5% for the sportsbook. For those unfamiliar, hold percentages should be over 5% and hope to get closer to 10%. Anything over that is considered extreme profitability.
Barstool Sportsbooks 19.1% is considered extremely profitable. This could be that the sports bettors are inexperienced and struggle or it could be the vigorish is too high.
There is also another contributing factor that could explain part of it, but certainly not all of it. Hold percentage does include unpaid futures bets as revenue. Theoretically, Barstool Sportsbook could have a lot of unpaid futures bets that would contribute to this number. Once futures are paid out, it could dramatically influence the sportsbook’s hold percentage.
Barstool Sportsbook was not open to take any futures bets that may have been completed in December. For instance, NFL Futures “Win Totals” bets are paid out in December. Barstool Sportsbook launched after these popular bets took place. Barstool has not had to pay out any futures bets yet, but the sportsbook can still take those bets. This could be one explanation for this unbelievable number.
However, this does not contribute to the number in its entirety. Every sportsbook is able to take futures wagers at any time. Furthermore, there are not many futures bets that cash in December other than the “Win Totals” NFL futures bets.
The reality seems to be that Barstool Sportsbook is charging a particularly high vigorish. This will not result in sustained success if they continue to offer uneven odds and few true odds boosts like their competitors.
Inexperience A Contributing Factor
Unfortunately for Barstool Sportsbook, this number is a bad look. They are branded as a sportsbook for the players, the everyday sports fan. A sportsbook that is truly for the players would not have this high of a hold percentage.
Barstool Sportsbook’s total December action in Pennsylvania was $71,779,304. The sportsbook’s total revenue was $13,932,121. Compare this to DraftKings, which took $207,608,213 in total bets and only $7,208,027 in revenue. Furthermore, FanDuel Sportsbook took $130,909,333 in total action in December. The revenue for the company was only $5,425,957.
Barstool Sportsbook took in 1/3 of the bets (in dollars) that DraftKings Sportsbook brought in, but earned almost double the revenue. Barstool Sportsbook has yet to truly become the sportsbook for the players. Its fans are fiercely loyal, but the sportsbook’s hold percentage shows that loyalty has not been reciprocated at this point.
Perhaps the “Stoolies” (Barstool Sportsbook users) are truly the worst sports bettors in the industry or the vigorish is just too high. It will be interesting to see the numbers as they go forward in Pennsylvania and now Michigan.