After suffering a $608.6 million net loss during the first quarter of 2020, Penn National Gaming assured investors Thursday that its digital platforming and omni-channel growth strategy will help the company rebound from the COVID-19-caused recession.
One of the country’s most diversified and geographically expanded gaming companies, Penn National reported a $166.5 million year-over-year first-quarter revenue decrease after mandatory social distancing forced the closure of all 41 of its sites, company executives said in a Thursday morning call with investors. In 2019, first-quarter revenues came in at $1.282 billion, but in 2020, first-quarter revenues came in at $1.116 billion.
The Wyomissing, Berks County-based gaming company’s first-quarter shortfall indicates the coronavirus recession’s claim on the hospitality and tourism industry as one of its primary casualties, Penn National officials told investors on May 7. But the company says that its diversified income model — with growth in the virtual gaming market and stake in digital sports media — will cushion losses and aid its long-term growth.
Jay Snowden, Penn National Gaming’s president and CEO, said the company had strong momentum at the start of 2020 with the introduction of retail sports betting services and the acquisition of a 36% stake in digital sports media company Barstool Sports. Snowden told investors the Barstool acquisition led to an all-time high stock price for Penn National.
“That momentum was cut short in mid-March by the COVID-19 pandemic, which required the temporary closure of all 41 of our properties,” he said. “While we have faced unprecedented challenges in recent weeks, we are confident that the Company’s long-term growth strategy remains intact, supported by our differentiated omni-channel approach.”
Snowden said the company’s “mixed” first-quarter results have “reinforced” its “investment thesis” in Barstool Sports, which reportedly saw a 20% increase to its blog traffic and a 50% increase in video views.
The company launched its wholly owned sports betting “iCasino” product in the commonwealth, which reportedly has garnered a newer and younger consumer demographic, that “highlights the lack of cannibalization iCasino has had on our brick-and-mortar business in the first quarter,” Snowden said.
“Our experience in Pennsylvania has reinforced our view that our casino operating prowess and database will be a significant competitive advantage as additional states authorize iCasino over the coming years — particularly when combined with the potential for significant iCasino cross-sell from the Barstool Sportsbook,” Snowden said.
In 2020, Snowden said the company expects digital sports betting to proliferate along with legislation that allows states to maximize tax revenues from the emerging virtual gaming industry.
“While the last several weeks have been challenging for the company, our team members and the entire industry, we remain firmly convinced of the long-term potential of our highly differentiated omni-channel approach,” he said.
Sign In
Free Newsletter
