Penn National posts record Q3 earnings
Penn National Gaming (PNG) has posted record profits despite revenue declining by 16.6 per cent in Q3.
The Pennsylvanian operator made $1.13bn (£867.8m/€962.8m) of revenue in the three months up to 30 September, $993.6m (£763.1m/€846.6m) of which came from gaming, equating to an 8.7 per cent fall compared to the same time in 2019.
With all costs taken into account, PNG reported an operating profit of $196.2m (£150.7m/€150.7m), up 8.9 per cent from the same period in 2019.
The quarter’s figures included the first two weeks operation of PNG’s newly acquired Barstool Sportsbook app, which is a significant strategic step towards offsetting the exposure of its 47 physical casinos.
The Barstool sportsbook launched on 18 September, following PNG’s acquisition of a 36 per cent stake in the wider Barstool Sports media business.
According to PNG CEO Jay Snowden, Barstool generated $78m (£60m/€66m) from 30,000 first-time depositors within the first 37 days it was live.
Players wagered $29.9m (£23m/€25.5m) on the Barstool app, but profits took a heavy hit after prizes and promotional bonuses were taken into account.
However, the app looks set to do well moving forward. For the period from the end of Q3 to October 24, the Barstool app recorded net gaming revenue of $3.1m (£2.4m/€2.6m) after $1.4m(£1.1m/€1.2m) in bonuses.
At the end of Q3, PNG announced plans to further its online betting and gaming operations via a public offering of shares which raised $982.1m (£754.2m/€836.8m).
The operator’s omnichannel ambitions aside though, PNG’s biggest threat going forward remains the risk of cancellations to the live sports schedule due to covid-19. It’s a threat that seems increasingly likely as much of the western world is hit by a second wave of infections.
Summarising the latest figures Snowden said: “The current operating environment has demonstrated the resilience of our teams and operations as we’ve made significant modifications to our business model to respond to the new volumes, offerings, and ongoing restrictions.
“In addition to the record results of our brick and mortar operations, one of the highlights of the quarter was the launch of our much-anticipated Barstool Sportsbook app in Pennsylvania, which has been well received.
“As we look ahead, we continue to see solid results across the portfolio in October, which is being driven not only by our margin improvement, but also our sustained revenue performance as we have continued to manage the ongoing COVID-19 restrictions. In sum, we believe we can close out the year with positive momentum.”