Interview Synopsis

Penn National Gaming – regional casino operations & online gaming outlook

  • Public Equity
  • Consumer
  • North America

Casino operators, like many industries, were dealt a difficult hand at the start of the COVID-19 pandemic – but the future's looking bright. Third Bridge Forum spoke to a former SVP at Penn National Gaming Inc to discuss Penn’s outlook, as well as industry trends and developments.

Casino operators place bet on industry transformation

Casino operators in North America have posted impressive 2021 revenues and the expert we interviewed is upbeat about the rest of the year. “With the pent-up demand that we’re seeing in Las Vegas, business is really coming back to pre-COVID levels. The regional markets are on fire.” We also heard that COVID-19 was an opportunity to “bust some of the paradigms” and change business models, which has helped to boost margins. Cashless gaming is also expected to enhance the user experience, and trim operating costs. 

Thinking back to March/April 2020, some companies in the industry were “on the verge of failure”, including Penn National, the expert said. “Costs had to be taken out of the business, and… the silver lining in the pandemic for the industry is that they really did things that they could have never done during regular operating times.” Penn is an example of a company that has “come out of this a lot stronger”. 

Although revenue will be impacted by reducing industry “paradigms” like poker and buffets, these moves result in enhanced margins overall. The specialist also acknowledged that there is certainly a sweet spot, and that the industry needs to pivot to targeted marketing as opposed to marketing to the masses. 

In terms of Penn’s strategy, the specialist expects the company is going to stick to its cores. “Their plan is no TV, lower acquisition costs, build the business through the Barstool database and converting Mychoice customers over”. (Earlier this year, we hosted an Interview on the company’s investment in Barstool Sports, which you can read here.)

“It’s a very thoughtful company, it’s a very patient company and I believe their strategy places them in a pretty unique place with a partner like Barstool,” the expert said. 

The Interview also discussed shifting customer demographics, business segment recovery, Penn’s iGaming position and M&A.

To access all the human insights in Third Bridge Forum’s Penn National Gaming – regional casino operations & online gaming outlook Interview, click here to view the full transcript. 

The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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