Core businesses impress as PNG reflects on Q3’s ‘significant milestones’

Penn National Gaming has heaped praise on “many significant milestones” achieved during the year’s third quarter, as the group’s core business results “continue to impress”.

The operator says that, excluding impacts from Hurricane Ida and regional flare ups of the Delta variant, it saw a continuation of the trends from prior quarters, including growth in VIP segments and younger demographics.

Among the developments achieved by the group through Q3 are Barstool Sportsbook launches in the five states of Colorado, New Jersey, Tennessee, Virginia, and Arizona; opening of Pennsylavania’s Hollywood Casino York; and continued roll-out of cashless, cardless, and contactless technology.

This was added to following the quarter’s close, with the group’s $2bn Score Media and Gaming transaction closing as the firm bids to become “North America’s leading digital, entertainment, sports content, gaming, and technology company”.

“Excluding the impact of Hurricane Ida and the Delta variant in the quarter, we saw a continuation of the trends from prior quarters including growth in our VIP segments and our younger demographics,” commented Jay Snowden, president and CEO of PNG.

“Our VIP segment grew by 33 per cent compared to Q3 2019, fueled by increases in both the number of guests playing at higher levels and the frequency of their visitation. 

“Additionally, we are experiencing continued engagement with our younger customers, who are generating new growth, and more than offset any declines in Q3 of our older core gaming customers due to the Delta variant.”

Headline figures within PNG’s second quarter include revenue of $1.51bn, representing an increase from both 2020 and 2019, which came in at $1.12bn and $1.35bn, respectively.

This included $1.25bn (2020: $993.6m & 2019: $1.08bn) from the group’s gaming segment, as well as $255.6m (2020: $136.1m & 2019: $266m) from its food, beverage, hotel, and other section.

Net income of $86.1m compares to $141.2m in the prior year, as well as $43.7m in 2019, with adjusted EBITDA and adjusted EBITDAR reaching $364.3m and $480.3m compared to $52.7m and $72.4m two years ago, respectively.

“While July was a record month, the second half of August and September was impacted by Hurricane Ida and regional flare-ups of the Delta variant, which reduced property adjusted EBITDAR and Adjusted EBITDAR margins by an estimated $30m and 85 basis points, respectively,” Snowden stated.

“As the operating environment has normalised, we have seen improved results in October. Further, other segment results included a $12.5m lobbying expense to support the California sports betting initiative and $7.5m in expenses related to new state launches of our Barstool Sportsbook app.”

For the year-to-date, the company has also documented a series of increases, with revenue reaching $4.33bn (2020: $2.55bn & 2019: $3.96bn), and net income up to $375.7m (2020: -$681.8m & 2019: $136m).

Adjusted EBITDA through the nine months ending September 30, 2021, closed at $1.17bn from 2020’s $419.1m and 2019’s $934.8m, with adjusted EBITDAR reaching $1.51bn (2020: $729.4m & 2019: $1.2bn).

“Importantly, October reflects more of what we saw in the first half of the third quarter with strong property level performance across our segments somewhat offset by new competition in Colorado and Indiana as well as the residual impact of gaming expansion in Pennsylvania,” Snowden added.

“Meanwhile, our retail Barstool Sportsbook concepts have stimulated database growth and increased frequency of visitation in the younger segments, while boosting gaming and food and beverage spend.”