Penn National Gaming on Thursday reported its second-quarter results. The casino and gaming company posted revenues of $1.6 billion for the period, up 5.2% year-over-year; and a net income of $26.1 million, a drop from $198.7 million in Q2 2021. Additionally, the Pennsylvania-based firm announced a name change to PENN Entertainment.
The company saw a series of highlights in the quarter, including a database growth that “highlights the value” of its omnichannel strategy; and the successful migration to its proprietary tech stack in Ontario. With the intention to maintain its “ties to its legacy” while better reflecting this evolution in North America, the company is now presenting itself under its new name.
“Today is an exciting day for us as we become PENN Entertainment,” said Jay Snowden, CEO and President. “Over the past few years, PENN has transformed our business through a highly differentiated strategy focused on organic cross-sell opportunities, which is reinforced by our investments in market-leading retail casinos, sports media assets, owned technology, including a state-of-the-art, fully integrated digital sports and online casino betting platform, and an in-house iCasino content studio.”
Snowden further added that the company is “pleased” with its second-quarter results, which also include an Adjusted EBITDAR of $504.5 million. Despite economic headwinds, the company delivered “consistent performance” across its retail portfolio in the quarter and into July. And also after quarter end, the company successfully completed the transition of theScore Bet in Ontario to a proprietary tech stack, “a key achievement” in PENN’s strategic roadmap.
“Our strong operating performance and balance sheet enabled us to opportunistically repurchase $167 million of stock in the quarter under our $750 million share repurchase authorization,” the CEO explained. Based on the second quarter performance and outlook for the remainder of the year, the company is reiterating its 2022 revenue and Adjusted EBITDAR guidance range of $6.15 billion to $6.55 billion, and $1.87 billion to $2 billion, respectively.
The company’s mychoice customer loyalty program increased its database by over 1.2 million registrations over the last four quarters, driven by both retail properties and new interactive offerings, which PENN claims positions it for future growth. Concurrently, the operator is encouraged by ongoing visitation and engagement of its high-worth segment, as well as continued growth from all but its oldest demographic.
Additionally, the Wyomissing-based company offered an update on its plans for cashless technology, already live at nine properties in three states. Going forward, PENN expects to roll the tech out to twelve additional properties by the end of the year, pending regulatory approvals. A second technology focus remains on migrating Barstool Sportsbook to the company’s in-house trading platform and tech stack, as it was done with theScore in Canada.
theScore, which now operates on the company’s vertically integrated proprietary tech stack, debuted in Ontario in early April, and was successfully migrated after Q2 end, a move that “significantly enhances” its online betting capabilities. The company will introduce its new Parlay+ feature for all major league sports this fall.
Following theScore in Canada, PENN targets Barstool’s migration in the US in Q3 2023, with the company already working with existing providers to ensure a smooth transition process. “Post-migration, we will begin to realize the full benefits of our in-house technology stack, including meaningful cost synergies and improved marketing and promotional capabilities,” the company said.
As for in-person sports betting, the company's Barstool-branded retail sportsbooks "resonate with the younger demographics and create meaningful cross-sell opportunities,” PENN officials added. “Our recently converted Barstool sportsbook in Lake Charles, Louisiana, set a new standard for retail sportsbook experiences, and we are seeing encouraging results in visitation and spend.”
Barstool Sportsbook at Hollywood Casino Penn National Race Course, Pennsylvania
The company is on track to convert its temporary Barstool sportsbook at L’Auberge Baton Rouge this fall, where it expects a similar positive impact. And based on ongoing success in Louisiana, PENN is optimistic about upcoming Barstool-branded retail launches in Kansas and Ohio, where the company operates properties bolstered “by large casino databases.”
Additionally, with the passage of sports betting in Massachusetts earlier this week – home to PENN’s Plainridge Park Casino – the company is “excited” to add a possible retail launch “by the end of this year,” while mobile wagering is anticipated in 2023.