Specialist
Former SVP at Penn National Gaming Inc
Agenda
- Key trends and developments in the betting industry
- Penn National Gaming's (NASDAQ: PENN) regional bricks-and-mortar casino outlook
- Barstool's positioning and opportunities and risks for Penn National Gaming as states unlock for online sports betting and iGaming
- Medium-to-long-term outlook
Questions
1.
What are your top-of-mind expectations for the betting trade industry over the next 12-18 months?
2.
What are some secular positive and negative trends coming out of the pandemic?
3.
You’ve highlighted some changes to operating models, but could you outline how margins might be impacted longer term for Penn and the broader industry? What is your outlook for profitability?
4.
You said that many operators have claimed their margin increases are sustainable in the long term, but at what cost? How significantly might it impact top-line expansion?
5.
You said that the group business segment will be slow to return. How much of a concern is this for regional operators such as Penn? Our expert in a previous Interview [see Las Vegas Casino Operators – Near-term Recovery Outlook – 14 April 2021] pointed to regional casinos being less impacted by a lagging return in group business, whereas Las Vegas strip operators are much more exposed to that, given conventions. What are your thoughts on this? How would you assess Penn’s positioning vs peers?
6.
Could you expand on the industry’s demographics and how they might evolve?
7.
What shifts do you expect regarding the uptick in online gaming penetration as we emerge from the pandemic?
8.
How do you assess Penn’s positioning within online gaming or iGaming and online sports betting? What are your thoughts on the company’s efforts here with Barstool Sports?
9.
How should we reconcile your comments about the potential end of irrational and irresponsible marketing against Penn Barstool’s marketing and promotional strategy?
10.
What do you think is Penn’s ability to sustain share in its key markets, especially as more competition enters some of these markets?
11.
Penn has recognised that it lags peers with its iCasino product. How relatively far behind is the company? How long do you think it could take for it to become a true competitive threat in this area?
12.
What are your thoughts on Penn’s recently announced acquisition of HitPoint Studios, which, as you alluded to, will be used to bolster its newly established Penn Game Studios? What value could this acquisition bring for Penn and what are some potential challenges?
13.
In its Q4 2020 earnings call, Penn indicated plans to launch in one new state that has legalised online sports betting every 3-5 weeks, expecting to end 2021 with 10 states on the roster. I believe it launched in Illinois on 11 March, but we waited over eight weeks before we heard of the next launch. What might be underlying this delay? You don’t seem to be concerned, however, about a potential slow roll-out.
14.
Some of Penn’s peers in online sports betting have acquired tech or infrastructure providers. Could there be potential consolidation on the horizon for Penn or its peers? I’m thinking mainly about online sports betting suppliers such as Kambi and White Hat Gaming. Would you be surprised if Penn ever took the DraftKings approach and acquired a B2B tech provider to achieve close to vertical integration?
15.
Do you expect any other potential industry M&A outside of Penn?
16.
What do you think is the road to sustainable profitability for Penn’s online gaming business? How might management be thinking about a profitability timeline, and for how long might they be willing to gain market share at the expense of bleeding money?
17.
Is there anything else you think we should discuss or expand on?
