Penn’s interactive division experienced massive growth during 2020, with strong revenues and EBITDA margins for the Hollywood Casino iCasino product in Pennsylvania, robust performance at the company’s 16 retail sportsbooks, and the introduction of the Barstool Sportsbook mobile app.
Penn National Gaming Stands Strong Despite Covid-19 Turmoil
Despite the challenging past year and ongoing pandemic-related restrictions, Penn National Gaming maintained its resilience and showed robust financial results for the fourth quarter of 2020.
For the fourth quarter ended December 31, 2020, Penn National posted nearly $1.3 billion of revenue, a decrease of 23.4% compared to the same period in 2019. Net income, however, was $12.7 million compared to a net loss of $92.9 million. Adjusted EBITDAR stood at $365.4 million, only 9% for the same period, reflecting structural changes that were implemented with the beginning of the pandemic.
In 3Q2020, net income surged from $43.7 million to $141.2 million which corresponds to a 223% increase.
CEO Jay Snowden said that revenues and Adjusted EBITDAR were overperforming the forecasts before Covid-19 related shutdowns in Illinois, Michigan, and Pennsylvania and increased restrictions in Ohio and Massachusetts as of mid-November.
The South segment was subject to fewer restrictions than other regions, but was still impacted by Hurricane Laura. This business segment reported Adjusted EBITDAR growth of 13% and Adjusted EBITDAR margin improvement of 720 basis points year-over-year, despite a 7% decrease in net revenues.
Focus on the continued Rollout of the Barstool Sports Wagering App
During the company’s fourth quarter earnings conference call, Snowden told analysts he expects the Barstool sports wagering app to be rolled out in 10 or 11 states by the end of 2021. The app was released in Michigan on January 22, four months after it debuted in Pennsylvania. He said the Barstool app is planned to go live in Illinois in time for the “March Madness” NCAA basketball tournament.
“Since launching in Pennsylvania last September, the Barstool Sportsbook app has registered over 72,000 customers in the state and has generated a total handle of nearly $300 million, despite very limited external marketing spend.”Jay Snowden, CEO of Penn National Gaming
The company will also focus on investing in growth and technology. Implementation of the 3Cs and other technology investments, such as the travelling wallet and enhanced engagement with the younger demographic, remains a top priority.
Meanwhile, the construction of Penn’s category 4 casinos in both York and Morgantown, Pennsylvania, has resumed and the company expects to open both venues in late 2021.