"Strong demand" at Penn National's land-based casinos boosts net income in Q1

Penn National Gaming on Thursday reported first-quarter revenues of $1.27 billion, down 6% compared to Q1 2019 pro forma results, and net income of $91 million, after reporting a loss in the same period a year earlier.

Adjusted EBITDAR was up 7% to $447.0 million. On a per-share basis, the Pennsylvania-based company said it had profit of 55 cents. 

These results surpassed Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of 30 cents per share, according to the Associated Press. Six analysts surveyed by Zacks expected $1.14 billion.

The company, which was included in the S&P 500 in March, said the results were driven by contributions from the online Barstool Sportsbook and its iCasino platforms, and land-based gaming properties despite COVID-19 related closures in Pennsylvania and Illinois for parts of January, and Zia Park in New Mexico not reopening until early March.

“Despite COVID-related restrictions and closures in January and harsh winter weather in the South segment in February, visitation and length of play continue to improve across all age segments of our player database. Moreover, we saw volumes in the month of March that we have not seen since 2019," said Jay Snowden, President and Chief Executive Officer. "Today, we’re still seeing spend-per-visit that is much higher than it was pre-COVID, and visitation is at or near 2019 levels in most of our markets, which is a great combination. Importantly, the younger demographic continues to choose gaming as a viable entertainment option while the 55+ age group has been returning to our casinos as vaccines continue to roll out. Unrated play continues to show strength that mirrors what we have seen from our rated guests." 

The CEO said Penn National focused on garnering top-three gaming revenue market share for the Barstool Sportsbook. "Since launching our product just over seven months ago, we have registered more than 400,000 customers and generated over $660 million and $61 million in handle and gaming revenue, respectively. We plan for the online Barstool Sportsbook to be live in eight states by football season and in at least 10 states before the end of the year."

On March 11, the company launched the Barstool Sportsbook in Illinois, ahead of the 2021 NCAA Basketball Tournament. "The initial results for the first 30 days of operations exceeded our expectations, with better first-time deposit conversions relative to what we had generated in Pennsylvania or Michigan. During this period, we registered over 54,700 new customers and generated total handle and gaming revenue of $67.7 million and $6.5 million, respectively. We also experienced high engagement, with 54% of our Illinois customers wagering on Barstool-exclusive bets," Snowden said. He added that the firm plans to open/rebrand six more retail sportsbooks by the end of 2021.

Penn National Gaming shares have risen nearly 6% since the beginning of the year. The stock has increased fivefold in the last 12 months.