- Penn National Gaming marks strongest quarter to date
- The Pinnacle deal is the company’s current priority
- Pennsylvania will welcome a Penn National online casino
Penn National Gaming (PNG) saw an increase in its gross gaming revenue (GGR) occasioned by the brand’s sports betting vertical.
Penn National Sees Casino Revenue Soar Thanks to Sports Betting
Penn National Gaming has posted its financial results for Q1, 2019 citing $1.28 billion over the first three months of the year. With the financial quarter ending on March 31, this marked 57% year-over-year improvement. The results fell short of the company’s original forecast which expected revenue to hit $1.3 billion.
Meanwhile, Penn’s earnings went up by another impressive 40% for the total amount of $183.1 million. Net income, though, took a nosedive down to $41 million or an estimated one-quarter less compared to Q1, 2018.
Over the past year, Penn has been expanding rapidly with the addition of 12 Pinnacle Entertainment venues with another deal for the acquisition of Greektown Casino in Detroit underway.
Penn is past the 40-property mark, which gives it a lot of leeway to expand into new markets as they become available, meaning both casinos and spots betting operations.
Why Did Penn’s Results Go Up?
Unsurprisingly, sports betting netted the company a significant revenue in places like Mississippi, West Virginia and most recently Pennsylvania where iGaming is only about to launch later in July, 2019.
Company’s boss and CEO, Timothy Wilmott, expressed his satisfaction with the recent developments, citing the state-by-state rollout of spots betting as the main result for the buoyed-up results:
VIP results were robust, and we posted our strongest year-over-year table games growth quarter on record partly due to the introduction of retail sports books
Taking a question after the earnings call presentation, Nomura Analyst Harry Curtis asked the executive whether the company was planning on introduce more properties in places that may have been left out.
Wilmott took the question explaining that Penn operated in 19 jurisdiction and that was probably going to be the case though 2020. He also reminded that Penn will be focusing on the acquisition of the Pinnacle brand and drawing synergies between the new assets and Penn’s own portfolio.
A more interesting question came from Bank of America Merrill Lynch analyst Shaun Kelley who wanted to know if Penn plans on launching online and in which vertical.
Yeah, look, the only market that has significant online sports betting business is New Jersey, and we don’t operate there. So it’s hard for me to give you any real color on what that impact has meant to the brick-and-mortar retail sports books. I would tell you that we’re running healthy margins on a stand-alone basis with the sports book in West Virginia and in Mississippi because the tax rate is appropriate. Pennsylvania– PNG CEO Jay Snowden
President and Chief Executive Officer Jay Snowden acknowledged that online wasn’t uppermost on the company’s ambitions. Still, Snowden said that Pennsylvania was one of the biggest markets where the company intends to monetize, other than New Jersey where Penn doesn’t operate.
Penn National got an approval to run an online casino by the Pennsylvania Gaming Control Board (PGCB) in September, 2018.