Penn National’s momentum cut-short after phenomenal start to 2020

Penn National Gaming has become the latest US casino operator to publish the full effects that the coronavirus pandemic has had on its operations, with “a phenomenal start to 2020” cut-short in March.

Asserting that the group will benefit from a state-by-state resumption of operations, PNG saw record results in January and February with guidance exceed across key reporting segments. 

With momentum cut-short and all 41 properties in the firm’s portfolio shutdown, the operator saw revenue drop 12.9 per cent from $1.28bn to $1.11bn, adjusted EBITDA almost halved to $154.8m and net loss swing to $608.6m from a profit of $41m a year earlier.

Despite this, the group has commented on a “notably strong first quarter” of its Penn Interactive division, experiencing significant growth in users and revenue for both its social and real money gaming products.

Jay Snowden, president and CEO, explained: “We are especially encouraged by the early results of our iCasino product in Pennsylvania. Despite the state’s excessively high tax rate, which has limited our marketing spend, 40,000 customers have registered for our iCasino product thus far, with roughly 66 per cent of those players being new to our ecosystem or reconnected former patrons. 

“The average age of these players is much younger than our core land-based player, which highlights the lack of cannibalisation iCasino has had on our brick and mortar business in the first quarter.

“Our experience in Pennsylvania has reinforced our view that our casino operating prowess and database will be a significant competitive advantage as additional states authorise iCasino over the coming years – particularly when combined with the potential for significant iCasino cross-sell from the Barstool Sportsbook.”

Adding that the firm’s long term growth strategies remain firmly on-course: “During the mandated closures of our properties, our management team has undertaken a comprehensive reevaluation of our corporate and property operating structures to improve efficiencies, and we are exploring new technologies and innovations that could help reimagine our casinos and enhance the guest experience. 

“We are also in the process of making meaningful upgrades to expand the reach of our industry-leading mychoice loyalty program. We expect the mychoice program to be a powerful tool for our omni-channel strategy, and we are taking steps to connect our land-based casinos to our sports betting and iCasino products to offer customers a compelling incentive to consolidate play across our various platforms. 

“This omni-channel approach will be bolstered by the broad appeal of Barstool Sports, and we look forward to attracting Barstool fans to our casinos through special events and talent appearances once the virus has subsided.”