MGM, Draft Kings have canceled partnership with Dave Portnoy for NY sports betting license

MGM Resorts, DraftKings and Fanduel had considered teaming up with Barstool Sports to license online sports betting in New York this summer — and dropped the idea due to Dave Portnoy’s erratic behavior in the past, sources told The Post.

Instead, the trio — whose block was one of two to win the high-profile state gaming commission’s license on Monday, beating a group led by Jay-Z, Fanatics and Portnoy’s Barstool Sports — chose Bally’s Corp. to meet a state require they have four sides in their bid, according to sources close to the situation.

The tie-up with Ballys took place this summer, just weeks after a sex tape surfaced showing a naked Portnoy pulling a leash on a collar around the neck of 22-year-old model Sydney Raines.

Portnoy and Raines both said the meeting was by mutual consent, with Raines adding that she had “no regrets”. But the shares of Barstool Sports owner Penn National Gaming were hit at the time, and sources say it was enough to rattle execs at MGM, DraftKings and Fanduel.

Jay-Z in formal wear
Jay-Z’s consortium eventually lost the sports betting bid.
Getty Images for The Rock and Roc

“One of the reasons Bally’s was chosen was that they were the least offensive,” said a source with direct knowledge of the conversations. “They saw a risk in Portnoy.”

Monday’s outcome — which puts the MGM group in line to share an estimated $500 million in profits with the state next year — came as a shock to many insiders, who until recently had expected New York to be the Jay-Z consortium would choose. In addition to the rapper’s star power and Fanatics clout in sports merchandising, Barstool Sports already has a successful online gambling operation.

Model Sydney Raines said her sex tape with Dave Portnoy was consensual.
Model Sydney Raines said what happened on the tape was consensual.
Leah Perry Photography

“Bally’s didn’t have the market share to bring to the table,” noted a surprised source. “Bar stool had market share.”

A gaming official insisted Monday that the state’s rejection of the Jay-Z/Barstool/Fanatics group, which planned to add a fourth partner if it wins a license, had nothing to do with sexual assault allegations. misconduct against Portnoy. reviewed early last week.

But the MGM camp had his bets covered anyway. (“We’ve always considered ourselves a class above Barstool,” said a source close to the MGM bidding group, explaining why they nixed the Portnoy deal.)

On Thursday, Business Insider released an explosive story detailing allegations made by women who accused Portnoy of excessively rough and violent sex.

Three of the women said they had sex with Portnoy, calling the experience “frightening and humiliating,” and two said he strangled and filmed them without permission. Portnoy responded Thursday that allegations that he has a kinky penchant for rough and violent sex “are 100 percent untrue”.

As Portnoy fights, it now seems more doubtful whether Barstool Sportsbook will win state gaming licenses, said an analyst requesting anonymity. Penn National earlier this year forecast a market share of 10 to 12 percent by then, the analyst said. It is currently about 7 percent, the analyst estimates.

DraftKings building
DraftKings has a 20 percent share of the US online sports betting market.
AP

Even before these new allegations, Barstool Sportsbook fell short of its own market share projections, the analyst said. Currently, FanDuel has a leading share of approximately 40 percent of the US online sports betting market. DraftKings is at 20 percent and BetMGM, which Monday announced a partnership with Madison Square Garden, at 13 percent.

Penn National, which bought 36 percent of Barstool in January 2020, has seen its shares fall nearly 20 percent since the Portnoy allegations were published. On Tuesday, they recently rose 1.3 percent to $59.75. They traded above $130 in March.

Another bidding group — Caesars, Wynn Interactive, Empire Resorts, PointsBet and Rush Street Interactive — was also licensed on Monday. New York requires four parties to participate in each bid, as it will account for 51 percent of gambling winnings. In return, it gives the winners a duopoly on sports betting so that they have limited competition.

FanDuel logo
FanDuel has a 40 percent market share.
Bloomberg via Getty Images

New York state is expected to generate $1.2 billion in gambling revenue within a few years, representing six percent of the national revenue, according to an analyst report from Truist. That would make New York the state with the fourth largest sports betting revenue, with California the largest with $3.4 billion. New Jersey is estimated at $800 million and Connecticut $200 million.

Barstool did not answer calls for comment.

BetMGM, FanDuel and DraftKings also did not return calls.

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