Penn National Optimistic Despite Revenue Falling 32% in 2020
Penn National Gaming stocks rose last week despite the operator posting lower than anticipated earnings in the fourth quarter of the year.
Penn National reported a 23% year-on-year fall in revenue to $1.2bn (£874.4m/€997m) for the fourth quarter, which ended 31 December 2020.
The firm’s adjusted earnings before interest, taxes, depreciation, amortisation and restructuring or rent costs was $365.4m for the same period. This equated to a 9% year-on-year fall.
Both figures had been trending ahead of forecast before covid-19 related closures were imposed on the business in Illinois, Michigan, and Pennsylvania, with increased restrictions in Ohio and Massachusetts and some other states from mid-November.
The Pennsylvania-based operator reported a 32% drop in revenue for the full year to $3.58bn.
However, it appears that the firm’s investment in media company Barstool Sports has bolstered the markets’ confidence, with shares rising by 26% since the start of the year.
Since it acquired a 36% stake in Barstool Sports for $163m in January 2020, its stock has more than tripled.
“Our investment in Barstool Sports provides us with a fully integrated media platform to support our evolution from the nation’s largest regional gaming operator to the best-in-class omnichannel provider of retail and online gaming and sports betting entertainment”, said Penn National’s president and chief executive officer Jay Snowden last week.
“In addition to the successful launches of our Barstool Sportsbook app in Pennsylvania and Michigan, we have now fully implemented our industry leading mychoice reward program across all our properties and online channels. This program of over 20 million members connects our land-based casinos to our sports betting and iCasino products, offering players a wide-range of compelling incentives to consolidate play across our various platforms.”
Penn National noted that that the launch of the Barstool Sportsbook app in Pennsylvania in September saw registrations by 72,000 customers and generated a handle of almost $300m.
The app also launched in Michigan in January, adding a further 48,000 customers and generating handle of $27.5m in the first ten days of operation. It is expected to launch in ten states by the end of the year.