Penn National Gaming’s full year results beat analyst guidance by $11.5m, suggesting that regional gaming had bounced back for the company.
In its fourth quarter, which ended December 31, it reported a rise in revenue to $734m, compared to $651.4m from the previous year.
For the year as a whole, Penn, the operator of 27 gambling facilities in the US and Canada, reported revenue of $2.84bn in 2015, up 9.7 per cent compared with revenue of $2.59bn in 2014.
Penn’s fourth quarter results were boosted by improved GGR in Ohio, where casinos were opened in Mahoning Valley and Dayton, as well as in Toledo and Columbus. Plainridge Park Casino, Tropicana Las Vegas and Prairie State Gaming were all healthy contributors to Penn’s results.
Highlights for the company saw it finally own a casino on the Las Vegas Strip with the purchase of the Tropicana, open a casino in Massachusetts and buy Prairie State Gaming, a VGT operator in Illinois.
Timothy Wilmott, President and Chief Executive Officer of Penn National Gaming, said: “Penn National’s strong fourth quarter financial results exceeded guidance and wrap up an active and productive 2015, in which we achieved positive operating results for the second straight year following the separation of the Company’s operating and real estate assets. Our progress throughout the year in enhancing operations, profitably growing market share in several key markets, maximizing operating efficiencies, and the continued success of our expansion initiatives position us for further financial growth in fiscal 2016.
Penn’s West segment margin declined as a result of the inclusion of Tropicana Las Vegas. It saw improvements in its East/Midwest and Southern Plains operating segments.
“In Massachusetts, throughout the fourth quarter we continued to refine Plainridge Park’s gaming floor offerings based on customer preferences while further adjusting promotions and advertising, and expanding our Marquee Rewards database to better compete with gaming facilities in neighboring states,” Mr. Wilmott explained. “Plainridge Park’s database now exceeds 160,000 customers and the property continues to generate the highest average win per machine across our 22 casino properties.
The company finally made its entrance into Las Vegas in 2015 with the purchase of the Tropicana
“We are making good progress toward positioning the Tropicana Las Vegas to benefit from the improving Las Vegas economic environment, new attractions and activity on the south end of the Strip, and ultimately our database of nearly three million active regional gaming customers, a significant percentage of which regularly visit Las Vegas,” Mr. Wilmott said. “Consistent with our operations in other markets, we are updating the slot floor, altering game placement and refining the table game mix in preparation for the introduction of the Marquee Rewards customer loyalty program in the second quarter of 2016, while simultaneously executing on opportunities to improve hotel yield and margins at the property. Looking forward, we plan to complement our initial operational improvements with enhanced food and beverage offerings before the end of 2016. With these changes and the property’s strong room product, which were part of approximately $200m in improvements completed by the former owners, we believe Tropicana Las Vegas will create shareholder value as we attract new and more profitable customer segments and leverage our Marquee Rewards database.”
Penn’s acquisition of PSG, a leading Illinois VGT operator, in the third quarter of 2015is providing another platform for future growth. As one of Illinois’ largest and most respected VGT route operators, PSG’s operations include more than 1,100 terminals across a network of 270 bars and retail gaming establishments across the state.
“During the fourth quarter, we entered into an agreement with Bally Gaming whereby PSG will place popular, next generation VGT product and exclusive new premium game content across its network of bars and retail gaming establishments,” Mr. Wilmott explained. “We believe PSG offers Penn National a solid platform for growth in the Illinois VGT market and a foundation for expansion in other states where this form of gaming is now being evaluated and could be authorized in the future.
“Finally, our anticipated mid-2016 opening of the $390m Hollywood Casino Jamul-San Diego, for which we are acting as developer, manager and lender, is approaching. The three-story gaming and entertainment facility, with the region’s most convenient access to the local population, will include more than 1,700 slot machines and 43 live table games.”