Skinning property not a priority, third quarter stream results below expectations
having a property on the Strip is not a priority for Penn National Gaming’s growth strategy, revealed Jay Snowden, president, CEO and director of Penn. Thursday.
“Generally speaking, I don’t think it’s imperative that we have an asset on the Las Vegas Strip given the approach we have around (developing an omnichannel operation),” Snowden told the investors, according to Las Vegas Review. “I think having representation in all states of the United States is absolutely a strategic imperative for us and we have largely achieved that goal.”
But while the Strip is not a priority for Penn, CEO admitted that if the company found the right asset in the right location and at the right price, they would be interested in seizing the opportunity. The discussion escalated after an analyst asked about MGM’s announcement of its intention to sell The Mirage.
“It would be great to have an asset that we could create some retention value for when (customers are) in Vegas,” Snowden added. “But we don’t think it’s a strategic imperative that drives us to hunt an asset or overpay.” The CEO said the gaming operator would have a “disciplined” approach to assessing Vegas’ opportunities.
Penn already operates a property on the Strip: the Tropicana, owned by real estate investment trust partner Gaming & Leisure Properties. Earlier this year, in April, Bally’s Corp. agreed to buy it from Gaming & Leisure for $ 308 million. Penn also operates the M Resort in Henderson.
“There are a lot of variables that you need to look at asset by asset as they become available – if they become available,” Snowden explained, reports. Journal. “But you have to assume we’re not going to chase anything that we don’t think we can get good feedback on.”
The senior executive of the company discussed Penn’s strategy on a third quarter earnings conference call with investors. Throughout the period, the company posted revenues of $ 1.5 billion, up 33% from 2020. Nevertheless, the net profit saw a notable decrease: 86.1 million dollars, against 141.2 million dollars the previous year, a decrease of 39%.
Also during the quarter, Adjusted EBITDA increased by $ 20.7 million compared to last year to reach $ 365.3 million. Analysts say it’s been a mixed period for Penn: While more revenue was generated than in 2020, the gaming business fell short of cash flow expectations. amid one-time expenses. These include expenses resulting from Hurricane Ida, regional outbreaks of the COVID-19 delta variant and $ 7.5 million in start-up costs for sports betting partner Barstool Sports.
Dave Portnoy, Barstool Sports founder.
Penn shares, traded on the Nasdaq stock exchange, fell double-digit percentages on Thursday, falling 21%. It happened in the middle sexual misconduct allegations against Barstool Sports founder Dave Portnoy, published by Initiated. Following the publication of the report, the stock continued to fall, closing the day at $ 57.40. This is the lowest for over a year.
Snowden also discussed funding lobbying efforts in California that seek to promote a sports betting initiative. Penn is one of seven companies supporting the initiative, with $ 12.5 million. The CEO said the initiative was designed to seek the best interests of the state and the casinos.
“We’re going to be pretty advanced in the signature collection mode in the coming weeks and months and there has been a bit of opposition, so we’re trying to figure that out,” he explained. “We actually want to do this in a way that is completely complementary to the voting initiative that the tribes already had before announcing the voting initiative and the language of the voting initiative.”