The Pennsylvania-based casino and racetrack operator will initially invest $135m in cash and $28m in shares; after three years, it will pay $62m to increase its share to 50%.
Under the terms of the deal, Penn National will be Barstool Sports’ exclusive gaming partner for up to 40 years.
Barstool Sports, the multi-channel sports media platform formed in 2003, will now be 28% owned by its employees and 36% owned by previous majority shareholder The Chernin Group.
Penn National President and CEO Jay Snowden said: "This exciting new partnership with Barstool Sports reflects our strategy to continue evolving from the nation’s largest regional gaming operator, with 41 properties in 19 states, to a best-in-class omni-channel provider of retail and online gaming and sports betting entertainment.
Barstool Sports Founder Dave Portnoy added: "This opportunity is a dream of mine and why I started Barstool Sports in the first place.
"Barstool Sports has a deep sports and gaming history and from the moment we met Jay and the Penn National team we knew this could an exciting and game changing partnership and we can’t wait to get started."
The deal is expected to be completed in the first quarter of 2020.
