Penn National sees better than expected revenues at reopened properties

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enn National Gaming on Thursday reported financial results for the three and six months ended June 30. For the second quarter, the company generated revenues of $305.5 million and Adjusted EBITDAR of $24.5 million, with a net loss of $214.4 million. Revenues for reopened properties through June 30 decreased 6% compared to the prior year period, while adjusted property EBITDAR at reopened properties increased 33% and its margins for them expanded by over 1,300 basis points year-over-year. Penn National ended the quarter with over $1.2 billion of cash.

Penn National has reopened all but two of its casino properties as of today —Zia Park and Tropicana Las Vegas. “Despite starting the second quarter with our entire property portfolio closed due to the COVID-19 pandemic, we ended the quarter in a significantly improved financial position as a result of continued mitigation efforts that contributed to significant margin improvement, a successful capital raise, and very strong financial performance at our properties since reopening,” said Jay Snowden, President and CEO. “Although visitation has yet to return to pre-COVID levels, in large part due to state mandated capacity restrictions and limited amenities, spend per visit has been notably strong, resulting in better than expected revenues.”

“While May and June results may have benefited in part from pent-up demand, we continue to be highly encouraged by revenue and EBITDAR trends in July and early August, despite the continuation of safety protocols, including capacity restrictions and social distancing mandates,” added Snowden. He said the company is working closely with regulators in several jurisdictions to introduce cashless, cardless, and contactless technology to its casinos. “Our cashless and contactless initiatives will also bring our property technology in line with other industries, while helping to attract a younger customer to our properties. We look forward to reopening the remainder of our properties and to the easing of restrictions at our reopened properties when it is safe to do so. We also anticipate resuming construction later this year on both of our Category 4 projects in Pennsylvania, which we expect will open in the second half of 2021.”

Snowden said the firm will extend medical and pharmacy benefits to all impacted team members through August 31. He added that Penn National’s COVID-19 Emergency Relief Fund, for which more than $1.7 million have been raised, has already provided financial assistance to approximately 1,000 team members and remains available to help others in need.

Furthermore, Penn National has made “significant progress” on the development of the Barstool Sportsbook mobile app over the last few months and remains on schedule to launch the product in September, according to Snowden. “We currently anticipate launching the app in Pennsylvania with additional states to follow throughout Q4-20 and Q1-21,” he said. “Underscoring the strength of its brand and following, Barstool has continued its positive momentum through the second quarter, recording the highest number of podcast downloads in the company’s history in June, making Barstool one of the top 4 largest podcast networks in the country, despite the lack of live sports. In addition, we are very pleased to report that we now have official data access agreements in place with the NFL, MLB and the NBA, which will allow us to provide an exciting variety of in-game betting opportunities for our sports betting customers.”

Hollywood Casino branded real-money iCasino product in Pennsylvania saw a quarterly sequential revenue growth of 108% in the second quarter. “By leveraging our deep, proprietary casino database, our iCasino product has achieved over 10% share of the highly competitive Pennsylvania market while delivering strong EBITDA margins,” Snowden noted. He also confirmed the third-quarter launch of Penn National’s mychoice social casino product, “which we believe will serve as an exciting interactive gaming experience for our guests, as well as an important customer acquisition tool in states where we have not yet launched iCasino.”

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