The launch of its Barstool branded retail sportsbooks has helped boost Penn National’s fourth quarter results during ‘one of the most challenging years’ in its history.
For the fourth quarter ended December 31, 2020, Penn National generated revenues of $1,027.4m and Adjusted EBITDAR of $365.4m. Revenues and Adjusted EBITDAR were trending ahead of forecast before COVID-19 related closures in Illinois, Michigan, and Pennsylvania and increased restrictions in Ohio and Massachusetts (among other states) began in mid-November. While revenues contracted 23 per cent year-over-year, Adjusted EBITDAR declined by only nine per cent for the same period, reflecting structural changes that were put in place with the onset of the pandemic.
Jay Snowden, President and Chief Executive Officer, commented: “Trends in January thus far are encouraging. Visitation and length of play have improved, several of the properties that were forced to close in November and December have reopened, and our retail sports books continue to positively impact both gaming and non-gaming revenues. We are continuing to see encouraging growth in the younger demographic tiers of our database, and we believe the roll-out of vaccinations will encourage more guests in all age segments of our database to return to our land-based facilities soon. Given the service enhancements and operational changes we have implemented, we stand to achieve meaningful EBITDAR growth as our volumes continue to approach previous levels.”
The company’s Barstool branded retail sportsbooks have ‘exceeded expectations.’ On January 22, 2021, the company successfully launched the Barstool Sportsbook app in Michigan and saw encouraging initial results, registering over 48,000 new customers and generateing total handle of $27.5m during the first 10 days of operation.
Mr. Snowden continued: “Our interactive division experienced tremendous growth during 2020, with impressive revenues and EBITDA margins for our Hollywood Casino iCasino product in Pennsylvania, strong performance at our 16 retail sportsbooks, and the introduction of our highly-anticipated Barstool Sportsbook mobile app. Since launching in Pennsylvania last September, the Barstool Sportsbook app has registered over 72,000 customers in the state and has generated total handle of nearly $300 million, despite very limited external marketing spend. We also experienced very high engagement, with nearly 50% of our Michigan customers betting on Barstool-exclusive bets. We anticipate being live in at least 10 states by the end of 2021 and remain very confident in our ability to win sizable share in new markets based on the power of the Barstool brand and media assets. In addition, we are excited to have launched our Barstool-branded iCasino in Michigan on February 1st, which allows us to begin to leverage the meaningful cross-sell opportunities from the Barstool Sportsbook and our mychoice audiences. Furthermore, we have integrated the mychoice Rewards Program into the Barstool Sportsbook and iCasino experience, providing players the opportunity to redeem their loyalty points for unique experiences and offers both at Penn National casinos and with Barstool Sports.
The operator reported ‘very strong results’ at its properties since the Barstool rebranding of our retail sportsbooks at Ameristar Casino Black Hawk, Greektown Casino Hotel, Hollywood Casino Lawrenceburg, and Ameristar East Chicago.
Mr. Snowdon explained: “Our Indiana retail sportsbooks generated record handle, revenue and EBITDAR during the fourth quarter, which has only accelerated following the rebranding. For example, sports betting handle at our Ameristar East Chicago property increased by 35% following the rebranding versus the prior six-week period, while table games and slot volumes in the adjacent Barstool-themed gaming area increased by 27% and 26%, respectively, during the same period. We believe this demonstrates the ability of our Barstool-branded retail sportsbooks to attract younger guests to our casinos, which can help drive significant growth in gaming and non-gaming revenues from new demographics. We expect this momentum to gain speed when COVID restrictions are lifted and we are able to host more Barstool events and personalities at our properties. Our plans for 2021 include rebranding several additional retail sportsbooks in our portfolio, beginning with the Pennsylvania properties in the first half of the year.”
“Additionally, our operations and IT teams have laid the groundwork for implementing a new generation of cashless, cardless, and contactless technology at our casinos, which we refer to as the 3Cs, that will improve efficiency and guest service, while also driving incremental revenue as we remove transactional friction and offer experiences in line with other industries frequented by younger demographics. We intend to launch this technology initially at our Pennsylvania casinos in the first half of 2021, subject to regulatory approval, and plan to continue rolling it out to other regions in 2021.
“Having been battle tested throughout 2020, we look forward to the year ahead with great optimism and are confident the foundations we built over the last twelve months have positioned us to generate significant long-term shareholder value and stronger communities.”