(Bloomberg) -- Barstool Sports, the controversial sports and pop-culture blog, agreed to sell a 36% stake to casino operator Penn National Gaming Inc. for about $163 million, the latest sign of convergence in sports, media and gambling.

Penn National will increase its ownership to about 50% after three years with a further investment of about $62 million, the companies said Wednesday in a statement. Penn National will be Barstool Sports’ exclusive gaming partner for as long as 40 years.

The purchase gives Penn a popular brand name to reach new customers and market its sports-wagering business nationally. Legal sports betting has soared since the U.S. Supreme Court overturned a mostly nationwide ban two years ago. Fourteen states now have sports betting, while seven more have approved it but aren’t yet taking wagers.

The deal follows other media-betting partnerships, including an online sports-wagering venture that Fox Corp. launched with the parent of PokerStars, and ESPN’s partnership with Caesars Entertainment Corp. to open a TV studio for betting fans in the Linq casino in Las Vegas.

The sale also represents a profitable partial exit from Barstool for Hollywood executive and investor Peter Chernin, who acquired a majority stake in the business in 2016. Entities affiliated with his Chernin Group will own 36% of Barstool after the deal, with the remaining 28% held by Barstool employees.

Podcasting Expansion

Barstool was founded in 2003 by Dave Portnoy, a blogger who remains involved. The company has expanded recently into podcasting.

In late 2017, ESPN canceled a show hosted by some the site’s personalities following social-media complaints that Barstool’s content was insulting to women. The site has a daily feature with photos of a scantily clad woman called Smokeshow and in the past rated the attractiveness of teachers who were charged with having sex with their students.

The company recently reached a settlement with the National Labor Relations Board to delete tweets in which Portnoy threatened to fire people who talked to union activists.

Penn, based in Wyomissing, Pennsylvania, got its start in 1972 with a single horse track it still operates nearby. The company has expanded largely through acquisitions and now operates 42 casinos or tracks across the country.

State that have approved sports betting generally give preference in awarding licenses to existing casino and track owners. Penn’s main brand, Hollywood Casino, doesn’t resonate with sports bettors, however, and Chief Executive Officer Jay Snowden said last year that he was looking for a media partner.

--With assistance from Josh Eidelson.

To contact the reporters on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net;Lucas Shaw in Los Angeles at lshaw31@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob Golum, John J. Edwards III

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