Online gambling in America is expected to experience annualized growth of 14.78% through 2025. Much of this disproportionate growth will be due to a wave of legalization of sports gambling hitting states.

Penn National Gaming (NASDAQ: PENN) is best positioned to profit from this move, and should be considered regardless of the surge in its share price – here’s why.

Penn and Barstool: a heavenly wedding

Early last year, Penn struck a deal to buy 36% of sports media conglomerate Barstool Sports at a valuation of $ 450 million. Company has options to increase its equity stack to 50% – what does Barstool mean for Penn?

12 months ago, Barstool Sports attracted 66 million Monthly Active Users (MAUs) to its content. The makeup of this audience is also ideal, with around 40 million of these MAUs playing on sports. To put this in context, the American Gaming Association has forecast 33.2 million players for the entire National Football League (NFL) season.

It’s getting better: Barstool’s audience is also younger and more masculine than Penn’s before the acquisition – exactly the audience that sports games attract.

To take advantage of this massive audience, Penn and Barstool released Barstool Sportsbook together, first in Pennsylvania late last year – the response has been encouraging. The digital bookmaker broke the record for total downloads for its first weekend while only being available in one state. The product has already racked up a 12.4% online market share in the state in just a few months, against already established products from DraftKings and many others.

What makes this even more remarkable is that Penn spends next to nothing on external marketing. It simply relies on the influence of Barstool to ensure the success of the bookmaker. Apparently, Barstool is the path of least resistance for customer acquisition, which is important due to the low margin nature of sports betting.

The product will debut in Michigan this month when the state rolls out its program. It is possible to think that Penn could take market share even faster than it did in Pennsylvania, given that it will enjoy the first-mover advantage – it was late for the party in Pennsylvania.

The momentum towards legalization does not appear to be slowing down either. This week, New York Governor Andrew Cuomo expressed his strong motivation to legalize digital gambling in his state. The COVID-19 pandemic has wreaked havoc on New York’s budget, and it’s one of the ways Cuomo plans to cope.

With the pandemic financially devastating every state, this could be a sign of things to come.

Not just sports betting and not just digital

Penn National Gaming gets a lot more from Barstool than a digital bookie. Barstool owns two of the top 20 podcasts in the country and had its most profitable year of growth in 2020 despite a temporary hiatus from the sport. On social media platforms, his personalities attract tens of millions of followers.

Additionally, Penn National will use the excitement created by Barstool and sports betting to improve its bricks and mortar portfolio as well. The company is actively shifting its physical assets to the Barstool brand to better capture its momentum. If that wasn’t enough, Penn plans to open Barstool-branded entertainment destinations in urban centers. These will work the same as sports and gambling themed nightclubs.

The duo are planning a truly omnichannel approach with Barstool’s digital presence also directly improving Penn’s real estate portfolio – a compelling win-win.

Say yes to Penn

Penn is ideally positioned to take advantage of the disproportionate growth that online games (and sports games in particular) will provide. His Barstool partnership greatly simplifies the path to success, and his use of the Barstool name has been effective and timely so far.

Regardless of recent preparation, Penn National Gaming is a stock to continue betting on for the long term.