Penn National Gaming’s two small casinos in Nevada, M Resort near Las Vegas and Cactus Pete’s in the northern community of Jackpot, are performing much like the company’s regional properties. Gaming revenue and visitation are improved but the non-gaming business remains challenged.
CEO Jay Snowden, appearing in front of the Nevada Gaming Control Board on Wednesday, said Penn’s portfolio of 41 properties in 19 states saw March’s gaming volumes that were the best for the company since before the pandemic.
“With movie theaters still closed, people are just looking to get out and have a good time. It’s that pent-up demand,” Snowden said during a brief video appearance before the regulatory body for licensing as the president of Cactus Pete’s, which is located near the Idaho border. Penn took ownership of the Jackpot casino in 2015 when the company acquired Pinnacle Entertainment.
Penn National CEO Jay Snowden addresses the Nevada Gaming Control Board on Wednesday
Snowden said the increased gaming volumes during March were notable.
Maryland’s six casinos – where Penn is in the process of acquiring Hollywood Casino Perryville – recorded their single largest gaming revenue month in state history, 7% higher than March 2019.
While he was waiting to talk with the Control Board, Ohio gaming revenues were released, and Snowden noted the state reported a 17.2% increase over March 2019. Penn has four gaming properties in the state – two casinos and two slot machine-only racetrack casinos.
“There is a strong demand for hotels and restaurants, but I think it’s going to take a lot longer for the non-gaming (areas) to come back,” Snowden said.
Gaming Control Board Member Phil Katsaros asked Snowden about the state of the company’s finances following last year’s casino industry-wide shut down due to the COVID-19 pandemic. Snowden said Penn had several risk-management “doomsday scenarios,” but a companywide closure was never considered.
He said Penn’s balance sheet – following capital raises of $700 million and $1 billion – is stronger than it was pre-pandemic.
“It feels great to be back on track and have that money on the books,” Snowden said.
At the outset of the pandemic, Penn sold the Tropicana Las Vegas and its 34-acre site to Gaming and Leisure Properties but leased the operations back from the real estate investment trust. The company has owned the 300-room M Resort since 2010.
Snowden also discussed the rollout of the company’s sports wagering business through last year’s $163 million purchase of 36% of sports media platform Barstool.
Penn has launched Barstool sports betting apps in Pennsylvania, Michigan, and Illinois and has plans to be up to 12 states by the end of the year. There wasn’t a mention of bringing the Barstool sports betting app to Nevada.
Snowden noted the partnership is boosting Penn’s customer demographics from the company’s traditional 50 years and older base to the age 21-39 followers of Barstool.
“Everywhere we have converted our sportsbooks to a Barstool-branded location, food and beverage and the gaming areas have increased up to 30%,” Snowden said.
Shares of Penn, traded on the Nasdaq, closed at $102.37, down $1.72 or 1.65%.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
