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Casino Company Buys $163 Million Stake in Barstool Sports

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  • Casino operator Penn National Gaming agreed to buy a minority stake in Barstool Sports for $163 million, a deal that now values the popular sports and pop culture blog at $450 million.
  • Since sports gambling was legalized in 2018, media and gambling companies have been rushing to enter the market. 
  • By combining their forces, media companies get access to revenue streams outside of advertising, while gambling companies get access to new consumers and a broader reach.
  • While some believe this model will spread, others note that Barstool has a unique following and ability to monetize its audience that sets it apart from others.

Penn National Buys Barstool Stake

Casino operator Penn National Gaming announced Wednesday that it bought a $163 Million stake in sports pop culture blog Barstool Sports, valuing the media company at $450 million.

In a press release, Penn National said that they had acquired a 36% stake in Barstool, adding that in three years the casino operator will “increase its ownership to approximately 50% with an incremental investment of approximately $62 million.”

Penn National will now be the “exclusive gaming partner” of Barstool for “up to 40 years,” according to the press release. 

Penn National will also have “the sole right to utilize the Barstool Sports brand for all of the Company’s online and retail sports betting and iCasino products.” 

Barstool founder Dave Portnoy separately announced the deal in a video on Twitter, where he talked about how he started Barstool as a “gambling rag” 17 years ago, and how the company has a deep history connected to gambling.

“We just needed a company with a shared vision,” he said. “That vision is Penn National Gaming. They have one of the biggest infrastructures in the country for gambling. They have sports tracks, they have casinos, they’re all over the country.”

“They have the infrastructure, we have this rabid audience, this fan base craving it,” Portnoy added. 

“Together, we’re going to create an omnipresent approach to gambling, on-premise, off-premise: Barstool casinos, bars, pizza places, you name it, we’re going to build it. All fueled by the Barstool media engine.” 

Win-Win for Media and Gambling Companies

The deal is a significant step for Barstool and Penn National, but it is also representative of a broader change in the gambling industry. 

In 2018, the Supreme Court ruled that sports gambling was legal in the U.S., giving individual states the power to decide if they wanted to legalize. 

According to the Wall Street Journal, 20 states and DC have legalized sports gambling. While some of those states only allow it to take place in casinos, others do permit online betting.

Since the decision, there has been a rush by both the gambling industry and media companies to capitalize on that new market, specifically when it comes to online gambling.

Those efforts have proven to be incredibly lucrative. According to the American Gaming Association, gamblers have placed $15.8 billion in sports bets and generated $1.1 billion in revenue for sportsbooks since the Supreme Court ruling.

Online betting has been the most profitable in states where it is allowed like New Jersey, where nearly 84% of the $4.58 billion the state brought in from sports wagers last year came from online bets, according to the Journal

The thing that is so unique about this market is that media and gambling companies do not have to be competitors. When companies like Penn National and Barstool combine their resources, both benefit.

Working jointly is good for companies like Barstool because digital-media companies primarily depend on advertising revenue. But combing forces with a gambling industry giant allows them to diversify their revenue streams.

It is also beneficial for big gambling operations like Penn National because media companies give them access to their large, young audience.

For example, Barstool sports has 66 million monthly unique visitors. By pairing with a popular company like Barstool, Penn National— which is very lucrative but not very well known— can grow its profile nationally while simultaneously cutting down on costs.

This saves gambling companies money because attracting new customers through normal means like advertising Facebook and Google can be expensive.

According to filings from the sports betting company DraftKings, the company paid an average of $406 for each new customer acquired in New Jersey in the first half of 2019. 

Future of Sports Gambling

While some predict that this model will be used for other media and gambling company pair-ups in the future, others are not so sure.

In an article for Forbes, writer Daniel Marcus argued that from the get-go, Barstool, “has been willing to leverage its’ rabid and loyal fan base into other revenue opportunities outside of the traditional advertising model.”

Marcus notes that Portnoy has always mobilized Barstool’s fans in a unique way, like through selling merchandise and convincing fans to actually buy that merchandise in a way other companies have not.

He also said that while other media companies have leaned into premium subscription models, Barstool has always supported growth without doing so.

“For those assuming this deal will trigger some sort of domino effect that will benefit the other sports media entities that are currently in play, I wouldn’t count on it, as few of them have proven they are able to effectively monetize their audiences beyond advertising,” he wrote.

While Portnoy has been effective at reaching his fans, he has also been a controversial figure. In August, he came under fire after he threatened to fire Barstool employees who talked to union activists in a series of tweets.

He was later forced to remove the tweets in a settlement with the National Labor Relations Board.  

See what others are saying: (The Wall Street Journal) (Forbes) (Business Insider)

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FDA Recalls 11,000 Ice Cream Containers and Sportsmix Pet Food Products

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  • Over 11,000 cartons of Weis Markets ice cream were recalled after a customer discovered an “intact piece of metal equipment” inside a 48-ounce container of the brand’s Cookies and Cream flavor. 
  • The FDA also expanded a recall of Sportsmix pet food over concerns that the products may contain potentially fatal levels of aflatoxins.
  • So far, more than 70 dogs have died and more than 80 pets have become sick after eating Sportsmix food. The agency recommends taking your pet to a veterinarian if they have eaten the recalled products, even if they aren’t showing symptoms.

Metal Pieces in Weis Ice Cream Cause Massive Recall

The Food and Drug Administration announced two major product recalls this week following serious consumer complaints.

The first came Sunday when the agency revealed that over 11,000 cartons of Weis Market ice cream were recalled. “The products may be contaminated with extraneous material, specifically metal filling equipment parts,” the FDA’s statement explained.

At least one customer discovered an “intact piece of metal equipment” inside a 48-ounce container of the brand’s Cookies and Cream flavor.

Those containers were available in 197 Weis Market grocery stores, but they have already been pulled from shelves. The products have a sell-by date of October 21, 2020, and customers who purchased the product can return it for a full refund.

Along with removing 10,869 units of the Cookies and Cream containers, the brand also recalled 502 3-gallon bulk containers of Klein’s Vanilla Dairy Ice Cream.

Those bulk containers were not for retail sale, but were instead sold to one retail establishment in New York and have since been removed.

Sportsmix Recall Follows 70 Pet Deaths, 80 Illnesses

The second major recall came Tuesday when the FDA expanded a recall of Sportmix dog food.

According to the agency, the product may contain potentially fatal levels of aflatoxins – toxins produced by the Aspergillus flavus mold, which can grow on corn and other grains used as ingredients in pet food.

As of Tuesday, more than 70 pets have died and more than 80 have gotten sick after eating Sportsmix pet food. Not all the cases have been officially confirmed as aflatoxin poisoning at this time. This count also may not reflect the total number of pets affected.

For now, the FDA is asking pet owners and veterinary professionals to stop using the impacted Sportsmix products that have an expiration date on or before July 9, 2022, and have “05” in the date or lot code.

More detailed information about the recalled products can be found on the FDA’s announcement page.

Pets experiencing aflatoxin poisoning may have symptoms like sluggishness, loss of appetite, vomiting, jaundice, and/or diarrhea. In some cases, this toxicity can cause long-term liver issues without showing any symptoms. Because of this, pet owners are being advised to take their animals to a veterinarian if they have eaten the recalled products, even if they aren’t showing symptoms.

There is currently no evidence that pet owners who have handled the affected food are at risk of aflatoxin poisoning. Still, the FDA recommends that wash your hands after handling pet food.

See what others are saying: (CNN) (USA TODAY) (PEOPLE)

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Signal and Telegram Downloads Surge After WhatsApp Announces It Will Share Data With Facebook

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  • Downloads for Signal and Telegram have skyrocketed in the last week, with the encrypted messaging apps boasting 7.5 million and 9 million new followers, respectively.
  • The growth comes after WhatsApp said it will require almost all users to share personal data with its parent company Facebook.
  • It also comes after Parler’s shutdown and bans against President Trump from Twitter and Facebook, which prompted his supporters to turn specifically to Telegram.

Telegram and Signal See Big Boost

Downloads for the encrypted messaging apps Signal and Telegram have surged in the last week after WhatsApp announced that it will start forcing all users outside the E.U. and U.K. to share personal data with Facebook.

Last week, WhatsApp, which is owned by Facebook, told users that they must allow Facebook and its subsidiaries to collect their phone numbers, locations, and the phone numbers of their contacts, among other things.

Anyone who does not agree to the new terms by Feb. 8 will lose access to the messaging app. The move prompted many to call for people to delete WhatsApp and start using other services like Signal or Telegram.

Now, it appears those calls to use other encrypted messaging apps have been heard. According to data from app analytics firm Sensor Tower, Signal saw 7.5 million installs globally through the App Store and Google Play from Jan. 6 to Jan. 10 alone, marking a 4,200% increase from the previous week.

Meanwhile, Telegram saw even more downloads. During the same time, it gained 9 million users, up 91% from the previous week. It was also the most downloaded app in the U.S.

WhatsApp responded to the exodus by attempting to clarify its new policy in a statement Monday.

“We want to be clear that the policy update does not affect the privacy of your messages with friends or family in any way,” the company said. “Instead, this update includes changes related to messaging a business on WhatsApp, which is optional, and provides further transparency about how we collect and use data.”

Other Causes of App Growth

Notably, some of the spikes in the Telegram downloads, specifically, also come from many supporters of President Donald Trump flocking to alternative platforms after Parler was shut down and Trump was banned from Twitter and Facebook.

Far-right chat room membership on the platform has increased significantly in recent days, NBC News reported. Conversations in pre-existing chatrooms where white supremacist content has already been shared for months has also increased since the pro-Trump insurrection at the U.S. Capitol last week.

According to the outlet, many of the president’s supporters have moved their operations to the app in large part because it has very lax community guidelines. Companies like Facebook and Twitter have recently cracked down on groups and users sharing incendiary content, known conspiracy theories, and attempting to organize events that could lead to violence.

There have been several documented instances of Trump supporters now using Telegram channels to discuss planned events and urge acts of direct violence. Per NBC, in one channel named “fascist,” users have called on others to “shoot politicians” and “encourage armed struggle.” A post explaining how to radicalize Trump supporters to become neo-Nazis also made rounds on the “fascist” channel, among others. 

Membership one channel frequently used by members of the Proud Boys has grown by more than 10,000 in recent days, seeming to directly attract users from Parler.

“Now that they forced us off the main platforms it doesn’t mean we go away, it just means we are going to go to places they don’t see,” a user posted in the chatroom, according to NBC.

See what others are saying: (NBC News) (Business Insider) (CNBC)

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Pornhub Removes All Unverified User Uploads, Taking Down Most of Its Videos

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  • Pornhub is now removing all videos that were not uploaded by verified users.
  • Before the massive purge, the site hosted around 13.5 million videos. As of Monday morning, there were only 2.9 million videos left. 
  • The move is part of a series of sweeping changes the company made days after The New York Times published a shocking op-ed detailing numerous instances of abuse on the site, including nonconsensual uploads of underage girls.
  • Following the article, numerous businesses cut ties with the company, including Mastercard and Visa, which both announced Thursday that they will not process any payments on the site.

Pornhub Purges Videos

Pornhub removed the vast majority of its existing videos Monday, just hours after the company announced that it would take down all existing videos uploaded by non-verified users.

According to reports, before the new move was announced Sunday night, Pornhub hosted about 13.5 million videos, according to the number displayed on the site’s search bar. As of writing, that search bar shows just over 2.9 million videos. 

The decision comes less than a week after the company announced it would only allow video uploads from content partners and members of its Model program.

At the time, Pornhub claimed it made the decision following an independent review launched in April to eliminate illegal content. However, many speculated that it was actually in large part due to an op-ed published in The New York Times just days before. That piece, among other things, found that the site had been hosting videos of young girls uploaded without their consent, including some content where minors were raped or assaulted.

The article prompted a wave of backlash against Pornhub and calls for other businesses to cut ties with the company. On Thursday, both Visa and Mastercard announced that they would stop processing all payments on the site.

“Our investigation over the past several days has confirmed violations of our standards prohibiting unlawful content on their site,” Mastercard said in a statement.

Less than an hour later, Visa tweeted that it would also be suspending payments while it completed its own investigation.

Pornhub Claims It’s Being Targeted

However, in its blogpost announcing the most recent decision, Pornhub claimed that it was being unfairly targeted.

Specifically, the company noted that Facebook’s own transparency report found 84 million instances of child sexual abuse content over the last three years. By contrast, a report by the third-party Internet Watch Foundation found 118 similar instances on Pornhub in the same time period.

Notably, the author of The Times report, Nicholas Krisof, specifically said the Internet Watch Foundation’s findings represented a massive undercount, and that he was able to find hundreds of these kinds of videos on Pornhub in just half an hour.

Still, the site used the disputed numbers to point a finger at others.

“It is clear that Pornhub is being targeted not because of our policies and how we compare to our peers, but because we are an adult content platform,” the statement continued.

“Every piece of Pornhub content is from verified uploaders, a requirement that platforms like Facebook, Instagram, TikTok, YouTube, Snapchat and Twitter have yet to institute,” the company added. 

However, Pornhub’s implication that it is somehow more responsible because it only let verified users post content is a highly impractical comparison. First of all, Pornhub is a platform created exclusively for porn, content the social media companies the company name-checked explicitly prohibit.

Second of all, and the vast majority of people who use those platforms are not verified, and it would be impossible for a company like Facebook or YouTube to limit content to only verified users without entirely undermining their own purposes.

Verification Concerns

Even beyond that, there are also still questions about Pornhub’s verification process. According to their site, all someone needs to do to become verified is to simply have a Pornhub account with an avatar and then upload a selfie of themselves holding a piece of paper with their username and Pornhub.com written on it.

While the company did tell reporters the process would be made more thorough sometime next year, they did not provide any specific details, prompting questions about exhaustive the verification process will ultimately be.

That question is highly important because, at least per its current policies, the verification process makes it so users are eligible to monetize their videos as part of the ModelHub program.

If the new verification process is still weak or has loopholes, people could easily slip through the cracks and continue to profit. However, on the other side, there are also big concerns among sex-workers that if the process is too limited, they will be able to make money on the platform.

That concern has already been exacerbated by some of the other actions taken since The Times article was published. For example, after Mastercard and Visa made their announcements, numerous sex workers and activists condemned the decision, saying it would seriously hurt how porn performers collect income —  not just on Pornbub, but on other platforms as well. 

“By targeting Pornhub and successfully destroying the ability for independent creators to monetize their content, they have made it easier to remove payment options from smaller platforms too,” model Avalon Fey told Motherboard last week. “This has nothing to do with helping abused victims, and everything to do with hurting online adult entertainers to stop them from creating and sharing adult content.”  

Other performers also expressed similar concerns that the move could spillover to smaller platforms. 

“I am watching to see if my OnlyFans will be their next target and sincerely hoping not,” amateur performer Dylan Thomas also told the outlet.

“Sex workers are scared by this change, despite not having uploaded any illegal content,” Fey continued, “because we have seen these patterns before and have had sites and payment processors permanently and unexpectedly shut down.”

See what others are saying: (Motherboard) (The Verge) (Bloomberg)

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