Penn National On Track For Barstool Sportsbook App Q3 Launch
Penn National Gaming generated revenue of $305.5 million in the second quarter, a sharp decline year over year because casinos were closed but better than analysts’ estimates. The company is eyeing a much-stronger third quarter.
There are several reasons for optimism the rest of the year, according to Jay Snowden, president and CEO of Penn National. He said the company is on track to launch the Barstool Sportsbook app in Pennsylvania in September and will roll out a new social casino product. It has reopened nearly all of its more than 40 properties in 19 states at limited capacities.
CHECK OUT: Top Pennsylvania sportsbooks
“While May and June results may have benefited in part from pent-up demand, we continue to be highly encouraged by revenue and EBITDAR (earnings before interest, taxes, depreciation, amortization and restructuring) trends in July and early August, despite the continuation of safety protocols, including capacity restrictions and social distancing mandates,” Snowden said in a news release. “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.”
In the first quarter, Penn National reported revenue of $1.12 billion as it began shutting down its North American facilities in mid-March because of the coronavirus.
In addition to the second-quarter revenue figure, which was down 77% from the second quarter last year, adjusted EBITDAR was $24.5 million in Q2 2020, according to the earnings report.
The report also showed that revenue for reopened properties from the reopening dates through June 30 declined 6% compared to the prior year period. Adjusted property EBITDAR at reopened properties increased 33%. The company said it had more than $1.2 billion in cash at the end of the quarter.
The company’s shares were up more than 13% in Thursday NASDAQ trading after beating most analysts’ revenue estimates.
A Lot Of Interest in Barstool
Penn National in late January acquired a 36% interest in the sports media platform Barstool Sports, becoming the controversial digital company’s “official gaming partner.” The $163 million deal was for 40 years and Penn National has an option to increase its ownership stake to 50% after three years.
Snowden said Penn National has already seen high levels of interest in the Barstool Sportsbook app from Barstool’s audience and social media platforms. Barstool recorded the highest number of podcast downloads in its history in June, Snowden said.
The numbers will likely grow when the sportsbook app goes live.
“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,” he said. “We currently anticipate launching the app in Pennsylvania with additional states to follow throughout Q4-20 and Q1-21.”
ICasino Product Grows
The Hollywood Casino-branded real-money iCasino games in Pennsylvania saw quarterly sequential revenue growth of 108% in the second quarter, the release said. The iCasino product has achieved more than a 10% share of the Pennsylvania market.
”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,” Snowden said.
The company said it will launch its new social casino “mychoice” in the third quarter. It’s another sign of future growth, especially the rest of the year, for Penn National.
”We believe the company is poised to capture an outsized share of the high growth U.S. sports betting and online casino markets and achieve market-leading profitability,” Snowden said. “The steps we’ve taken to strengthen our financial position and achieve ongoing operational efficiencies have helped ensure that Penn National remains well-positioned for near- and long-term success. “
Be first to get our exclusive sports offers!
Join today to stay up to date on your states gambling news and offers.