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About Penn National Gaming, Inc.

Penn National Gaming is a leading regional gaming company that operates or has ownership interests in around 40 casinos, racing facilities, and video gaming terminals across the US. Its holdings feature about 50,000 gaming machines, more than 1,300 table games, and about 8,800 hotel rooms. Many of its properties operate under the Hollywood and Argosy brands. Other facilities include the Tropicana on the Las Vegas Strip; racetracks (horseracing and greyhounds) in New Jersey, and Texas; and dockside casinos mostly in the Midwest and the South. The firm also offers online gaming through Penn Interactive Ventures.

Operations

The Company has four operating segments: Northeast, South, Midwest, and West.

The Northeast segment accounts for approximately 45% of total revenue. The properties owned, operated or managed in this segment includes Ameristar East Chicago, Greektown Casino-Hotel, Hollywood Casino (Bangor, Charles Town, Columbus, Lawrenceburg, Penn National Race Course, and Toledo), and Hollywood Gaming at Dayton Raceway.

The South segment properties includes 1st Jackpot Casino, Ameristar Vicksburg, Boomtown (Biloxi, Bossier City, and New Orleans), Hollywood Casino (Gulf Coast, and tunica), L'Auberge (Baton Rouge, and Lake Charles), and Margaritaville Resort Casino. This segment represents about 20% of the company's total sales.

The Midwest segment (around 20% of sales) includes Ameristar Council Bluffs, Argosy Casino (Alton, and Riverside), Hollywood Casino (Aurora, Joliet, Kansas Speedway, and St. Louis), Prairie State Gaming, and River State Casino.

The West segment, which operates Ameristar Black Hawk, Cactus Petes and Horseshu, Tropicana Las Vegas, and Zia Park Casino, accounts for more than 10% of total sales.

The remaining sales belongs to Others, which operates Freehold Raceway, Retama Park Racetrack, Sam Houston Race Park and Valley Race Park., and Sanford-Orlando Kennel Club.

The company makes about 80% of its revenue from gaming. Other revenue comes from hotel, food and beverage. Its online gaming arm Penn Interactive Ventures operates an iCasino through HollywoodCasino.com.

Geographic Reach

Headquartered in Pennsylvania, Penn National operates facilities in about 20 US states. Operations are organized along geographic lines, with segments devoted to the Northeast, South, West, Midwest, and Other.

The Northeast segment includes more than 10 properties, most of which are in Ohio, Pennsylvania, and Indiana. The region's largest property is its land-based Hollywood Casino Columbus in Ohio, an approximately 168,000 square-foot facility with about 2,100 gaming machines.

The South consists of approximately 10 properties in Louisiana and Mississippi, nearly all of which are dockside. Major properties in the region include L'Auberge Baton Rouge and Ameristar Vicksburg with about 70,000 square footage.

The Midwest includes nearly 10 properties, most of which are in Illinois and Missouri. Penn's largest facility in the Midwest is its Hollywood Casino St. Louis, an around 120,000 square foot boat with about 2,000 machines, roughly 65 table games, and over 500 hotel rooms.

The West includes five properties in Nevada, New Mexico, and Colorado, such as the Tropicana Las Vegas and the M Resort in Henderson, Nevada.

The Other segment includes racetracks (horses and greyhounds) in New Jersey, and Texas. Through a joint venture with Sam Houston Race Park it owns and operates race parks in Houston and Harlingen, Texas.

Sales and Marketing

Penn National's MYCHOICE customer loyalty program has over 20 million members and provides such members with various benefits, including complimentary goods and/or services.The program allows customers to earn promotional points that are redeemable for slot play and complimentary gifts. The accumulated points can also be redeemed for food and beverages at Penn National's restaurants and for products sold at retail stores in most of the company's casinos.

Financial Performance

In 2019, the company's revenue increased by about $1.7 billion to $5.3 billion. The increase was due to Gaming revenues and food, beverage, hotel and other revenues for the year ended December 31, 2019 benefited from the first full year of operations of Pinnacle, which was acquired on October 15, 2018, resulting in increases of $1.1 billion and $317.0 million, respectively, and the acquisitions of Margaritaville on January 1, 2019, and Greektown on May 23, 2019, which contributed a combined $286.0 million and $67.5 million, respectively.

Penn National Gaming's net income decreased by about 54% in 2019, resulting to a net income $43.1 million compared to $93.5 million from the prior year. The decrease was primarily due to the increase of operating expenses and income tax expense, rendering the company's increase in revenue disregarded.

Cash of the company in the end of fiscal 2019 decreased by $26 million to $455.2 million, compared to the prior year with $481.2 million. Operations provided $703.9 million, while investing activities and financing activities used $607.5 million and $122.4 million, respectively.

Strategy

Penn National Gaming believes that its portfolio of assets provides the benefit of geographically-diversified cash flow from operations. The company expects to continue to expand its gaming operations through the implementation and execution of a disciplined capital expenditure program at its existing properties, the pursuit of strategic acquisitions and investments, and the development of new gaming properties. In addition, the partnership with Barstool Sports reflects its strategy to continue evolving from the nation's largest regional gaming operator to a best-in-class omni-channel provider of retail and online gaming and sports betting entertainment.

The company's growth is fueled, in part, by the acquisition of existing gaming, racing, and development properties, as well as its iGaming initiatives. In addition to standard closing conditions, the company's acquisitions are often conditioned on the receipt of regulatory approvals and other hurdles that create uncertainty and could increase costs. Such delays could significantly reduce the benefits of such acquisitions and could have a material adverse effect on the company's financial condition, results of operations and cash flows.

Mergers and Acquisitions

In 2020, Penn National Gaming, Inc completed its previously announced acquisition of a 36% interest in New York-based Barstool Sports, Inc. for total consideration of approximately $163 million, comprised of approximately $135 million in cash and $28 million in non-voting convertible preferred stock. Penn National is now Barstool Sports' exclusive gaming partner and has the sole right to utilize the Barstool Sports brand for all of its online and retail sports betting and iCasino products.

In 2019 Penn National Gaming acquired Greektown Casino-Hotel in Detroit, Michigan from JACK Entertainment for approximately $300 million in cash. Opened in 2000, Greektown features 100,000 square feet of casino space, approximately 2,700 gaming machines, 60 table games, a poker room, and several restaurants and bars. The casino also boasts a 400-room high-rise hotel with event and catering space.

Earlier in 2019 Penn acquired Margaritaville Casino Resort in Bossier City, Louisiana for $115 million. Built in 2013, the property features 26,500 square feet of casino space, 395 hotel rooms, 6 restaurants and food and beverage outlets as well as a theater and meeting space.

Company Background

Peter Carlino entered the racing industry in the 1970s through an investment in the Philadelphia Park race track. Carlino helped liberalize Pennsylvania gaming laws by allowing intrastate simulcasts and state-to-state broadcasts. His investment grew to include a pair of Pennsylvania horse tracks, nine off-track wagering centers around the state, and a West Virginia facility that offered thoroughbred racing and video slot machine gambling. 

Carlino's son Peter M. Carlino has expanded his father's business by acquiring existing tracks, investing big in renovations, making aggressive expansions into simulcasting and gaming, and eventually moving into other states. The firm went public in 1994. It spent $48 million in 1996 to acquire Pocono Downs.

Penn National Gaming, Inc.

825 Berkshire Blvd STE 200
Wyomissing, PA 19610-1247
Phone: 1 (610) 373-2400

Firm Stats

Employer Type: Publicly Owned
Stock Symbol: PENN
Stock Exchange: , NASDAQ
Chairman: Peter M. Carlino
President and COO: Jay A. Snowden
CEO and Director: Timothy J. Wilmott
Employees (This Location): 120
Employees (All Locations): 28,300

Major Office Locations

Wyomissing, PA

Other Locations

Longwood, FL
Sioux City, IA
Aurora, IL
Joliet, IL
Kansas City, KS
Baton Rouge, LA
Perryville, MD
Bangor, ME
Biloxi, MS
Robinsonville, MS
Columbus, OH
Carbondale, PA
Grantville, PA
Lancaster, PA
Muncy, PA
York, PA