Penn National Stays in the Black in 4Q2020 – But Finishes 2020 with $669.5 Million Net Loss

Article by : Helen Feb 24, 2021

Penn National Gaming’s results for the final quarter of 2020 and the year overall are finally in. They confirm that the company is on the way to recovery – and that 2020 was a year full of hardship for Penn National that resulted in $669.5 million in annual net losses.

The casino operator finished 4Q2020 with a $12.7 million net income – a significant improvement compared to 4Q2019’s $92.9 million in net losses. Still, it is a 246.5% quarter-on-quarter decline in net income. It wouldn’t be an understatement to say the pandemic hit Penn National hard. The company reported net losses in the first two quarters of 2020: Penn National finished the first quarter of 2020 with a net loss of $608.6 million, while the second one resulted in $214.4 million in net losses.

In 3Q2020, the company managed to turn a profit of $44 million, even though its operations were affected by Hurricane Laura. At the same time, Tropicana Las Vegas reopened later than expected, and Zia Park stayed shut down throughout the three months.

Annual gaming revenues from Penn National’s venues was at two-thirds of the 2019 results – it shrank from $4.27 billion in 2019 to $3.05 billion last year. Food, beverage, hotel, and other revenue sources brought Penn National $527.6 million in 2020 – half as much as in 2019 when they generated $1.03 billion.

In February 2020, the casino operator stroke a partnership deal with the Barstool Sportsbook app. It helped soften the blow from the forced closures that left Penn National’s 41 venue properties empty at one point or another throughout 2020. Under the agreement, Barstool Sports now exclusively promotes Penn National’s offline and online casinos and sports betting products to its 20-million-people customer base nationwide.

Barstool has launched in Michigan and Pennsylvania, with Penn National’s sportsbooks at Ameristar Casino Black Hawk, Greektown Casino Hotel, Hollywood Casino Lawrenceburg, and Ameristar East Chicago rebranded under its name. Barstool’s success exceeded Penn National’s management expectations. For instance, Ameristar East Chicago sportsbook saw an increase of 35% in sports betting handle after rebranding (compared to six weeks before it took place).

We expect this momentum to gain speed when COVID restrictions are lifted, and we are able to host more Barstool events and personalities at our properties. Our plans for 2021 include rebranding several additional retail sportsbooks in our portfolio, beginning with the Pennsylvania properties in the first half of the year.

Jay Snowden, Penn National President and CEO

Snowden also stayed positive in his comment on Penn National’s overall performance in 2020: “Having been battle-tested throughout 2020, we look forward to the year ahead with great optimism and are confident the foundations we built over the last twelve months have positioned us to generate significant long-term shareholder value and stronger communities.”

As for 2021 plans, Penn National is keen on expanding its reach via Barstool Sportsbook’s and acquiring Hollywood Casino Perryville in Maryland. If the casino acquisition deal comes through, Maryland will become Penn National’s 20th state. The deal is pending approval from the state regulator at the moment.

Penn National also has two casinos – one in York and another one in Morgantown, Pennsylvania – under construction. The sites’ development had to be paused due to COVID-19, but it has restarted, and both venues are expected to open their doors in “late 2021”.

Helen

Chief Editor

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