A poor quarter overall
Penn National Gaming suffered a $608.6m net loss in the first quarter of 2020 in the wake of the coronavirus pandemic. The casino and racetrack operator reported its financial results on Thursday for the three-month period ending March 31.
the strong results ground to a halt in mid-March with the outbreak of COVID-19
Revenue for the quarter was $1.12bn, representing a decrease of $166.5m for the same period last year. The president and CEO of Penn National, Jay Snowden, said it had a strong start to 2020, achieving record results in both January and February. This was largely thanks to the introduction of retail sports betting at a number of its properties. Sports betting operations helped both gaming and non-gaming revenues increase.
The company’s stock price also reached an all-time high at the start of the year after announcing its major investment in Barstool Sports. However, the strong results ground to a halt in mid-March with the outbreak of COVID-19. This saw all 41 of the operator’s properties being forced to close temporarily.
Penn National says it remains confident of long-term growth.
Dealing with the crisis
Once Penn National facilities started to close, the company began taking steps to help mitigate the financial fallout as much as possible. This led it to shore up its balance sheet, having $730.7m cash on hand and dropping its average cash burn down to about $83m each month starting in April.
Snowden is confident that once the casinos start reopening, the company will be well-positioned to resume where it left off. One of the main benefits he highlighted was the operator’s presence in 19 different states.
Looking to the future
As the properties remain closed, the Penn National management team has been re-evaluating the structures of the company to maximize efficiencies. They are also looking at new innovations and technology that could enhance the customer experience.
Barstool Sportsbook app is on track to launch in the third quarter
Significant upgrades are coming to the mychoice loyalty program. Penn National is also hoping to leverage its relationship with Barstool Sports to attract new people to its casinos once the virus subsides. The Barstool Sportsbook app is on track to launch in the third quarter of 2020.
The company’s results in the Pennsylvania iCasino market to date have been encouraging, despite the high tax rates. It hopes to maintain these strong results in other jurisdictions going forward, as more states look to legalize online gambling.