Penn National Gaming is suspending construction on two planned small casinos in Pennsylvania after having to close more than half of operations due to the COVID-19 coronavirus outbreak.
CEO Jay Snowden said he supports the efforts undertaken “to stem the tide of this unprecedented public health threat.” Pennsylvania’s governor ordered the state’s casinos to close.
“We also believe it’s prudent to revisit any and all capital expenditure commitments in order to help preserve liquidity in light of the impact of COVID-19 on our business,” Snowden said.
The company has closed 26 casinos in 13 states, which has impacted almost 19,000 employees. Penn, which operates 41 casinos in 19 states, said it would pay the affected employees through the end of March.
The $111 million Hollywood Casino Morgantown was expected to open in November and the $120 million Hollywood Casino York at the York Galleria Mall was targeting an opening by the end of the year.
The two “mini” casinos – authorized to operate up to 750 slot machines and 40 table games – were part of a statewide gaming expansion plan that was approved two years ago by state lawmakers and the governor.
“We look forward to continuing to consult with the Governor’s office, as well as local, state and federal health authorities to determine when construction might resume,” Snowden said. “In the meantime, we appreciate the patience, understanding, and support of our community leaders in Morgantown and York, as well as our local construction teams.”
On Monday, Penn National said in a Securities and Exchange Commission filing it was borrowing the remaining $430 million in the company’s line of credit.
“The company elected to draw down the remaining available funds … to ensure it maintains ample financial flexibility in light of the spread of coronavirus,” Penn said in the filing.
On Tuesday, shares of Penn Nation closed at $7.33 on the Nasdaq, down $1.21 or 14.17%.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
