Gambling regulators in two states are investigating Penn National Gaming over concerns with Barstool Sports and its founder Dave Portnoy, the Wall Street Journal reported.
Why it matters: Penn's acquisition of Barstool always had brand risk, but now it also has business risk that could result in losing gambling licenses.
Driving the news: WSJ reported Thursday that gambling regulators in Nevada and Indiana are looking into Penn.
Context: Penn acquired a 36% share in Barstool in January 2020 and plans to buy the rest in early 2023, according to Penn's latest earnings call.
The other side: Portnoy told the Action Network that the regulators "wouldn't be doing their job" if they did not investigate the allegations in the Insider articles.
What's next: Snowden told WSJ that Portnoy will remain involved in Penn, but there's no set organizational structure yet. He may announce those details in the third quarter.
The bottom line: Companies must consider far more than financials when dealmaking.
Kerry Flynn co-authors the Axios Pro Media deals newsletter. Sign up now.
