- Penn National purchased a 36% stake in Barstool Sports for $163 million.
- "It's going to increase the traffic in their casinos," Baron said.
- Penn National's stock has climbed since the announcement last week.
Billionaire investor Ron Baron said Tuesday that the recent investment into Barstool Sports is going to be a boon for Penn National Gaming.
Appearing on CNBC's "Squawk Box," Baron said the deal for the sports media company will bring more people to Penn National's casinos. Penn National shares were up more than 7% midmorning Tuesday.
"Not only are they going to make a lot of money on this investment for this $150 million and buy the rest of it out from the founder, but also it's going to increase the traffic in their casinos," Baron said. "It's going to be worth a ton."
The gambling company announced last week that it is paying $163 million to take a 36% stake in Barstool. Penn National said it will launch a Barstool Sportsbook brand, hoping to use the media company's popularity to increase its market share in the growing sports betting industry.
Baron's fund owns 8.6% of Penn National with a market value as of Monday at $296 million.
As of Monday's close, shares of Penn National had risen 14.1% since last Tuesday, the day before the deal was announced.
Baron founded his investment firm, now known as Baron Funds, in 1982. The firm has roughly $27 billion in assets under management.
Correction: As of the close Monday, Penn National shares had risen 14.1% since last Tuesday, the day before the deal was announced. An earlier version misstated the percentage and day.