Penn National Gaming has reported financial results for the three and six months ended June 30, 2020, bearing news of losses and the inevitable reference to damage to the business arising from the ongoing COVID outbreak.
Revenues in Q2 reached $305.5m versus $1.3bn year-on-year, alongside a net loss of $214.4m compared with a gain of $51.4m in Q2 2019. Adjusted EBITDAR was $24.5m against $406.5m year-on-year. Revenues for reopened properties from the applicable date of reopening through June 30 decreased 6% compared to the prior year period.
Meanwhile, adjusted property EBITDAR at reopened properties increased 33% and adjusted property EBITDAR margins expanded by over 1,300 basis points from the comparable prior year period.
Jay Snowden, President and CEO, remained upbeat, saying: “While the last several months have presented unprecedented challenges for our company, I am extremely proud of the way our corporate and property leaders and valued team members have risen to the occasion and, working tirelessly alongside our regulators and public health officials, have successfully reopened all but two of our casino properties as of today (Zia Park and Tropicana Las Vegas).
“Despite starting the second quarter with our entire property portfolio closed due to the COVID-19 pandemic, we ended the quarter in a significantly improved financial position as a result of continued mitigation efforts that contributed to significant margin improvement, a successful capital raise, and very strong financial performance at our properties since reopening.”
Snowden also made note of some encouraging Q3 trends. “While May and June results may have benefited in part from pent-up demand, we continue to be highly encouraged by revenue and EBITDAR trends in July and early August, despite the continuation of safety protocols, including capacity restrictions and social distancing mandates,” he said.
“We anticipate that a meaningful portion of the margin improvements realized since our properties reopened will be recurring as we continue to make fundamental changes to improve our offerings and efficiencies across our organization.”
On the outlook and the involvement of the Barstool brand, Snowden commented: “Over the last few months we have made significant progress on the development of the Barstool Sportsbook mobile app and remain on schedule to launch what we believe will be a best-in-class sports betting product in September.
“We currently anticipate launching the app in Pennsylvania with additional states to follow throughout Q4-20 and Q1-21. We have already seen very high levels of interest in the Barstool Sportsbook app from the Barstool audience as well as on a wide range of social media platforms, and we are extremely excited about Barstool’s plans to introduce the app to their growing and loyal audience.
“Underscoring the strength of its brand and following, Barstool has continued its positive momentum through the second quarter, recording the highest number of podcast downloads in the company’s history in June, making Barstool one of the top four largest podcast networks in the country, despite the lack of live sports.
“In addition, we are very pleased to report that we now have official data access agreements in place with the NFL, MLB and the NBA, which will allow us to provide an exciting variety of in-game betting opportunities for our sports betting customers.”
He added: “Our demonstrated ability to convert our casino database, together with our powerful partnership with Barstool Sports, should provide significant organic customer acquisition and cross-sell opportunities. As a result, we believe the company is poised to capture an outsized share of the high growth US sports betting and online casino markets and achieve market-leading profitability.
“Our goal is to come out of this pandemic as a stronger company, and we believe the operational changes we have implemented, together with our strengthened balance sheet and unique omni-channel strategy supercharged by Barstool Sports, position us to achieve this goal and drive enhanced shareholder returns.”