Penn National Gaming Incorporated, one of the country’s biggest gaming brands, has been having a bit of a tough time navigating its business over the past few months. Just like many other businesses across the state, the casino operator has had to close down key parts of its operations as part of nationwide directives to prevent further spread of COVID-19.
According to a recent revenue report, even though the gaming company saw a phenomenal start this year with stellar results in the first two months, the same cannot be said for now. The great performance was primarily driven by their retail sports betting offerings which are spread out across various parts of the country including Pennsylvania.
The coronavirus pandemic has been the biggest stumbling block for that momentum and already there have been significant revenue drops. To put this into perspective, Jay Snowden, the President and Chief Executive Officer of Penn National Gaming, confirmed that the company’s first-quarter revenues have dropped by a whopping $166.5 million year-over-year to a $1.12 billion. He also affirmed that the company has “incurred a net loss of $608.6 million due to $616.1 million of impairment losses.”
The Recovery Plans
As it turns out, despite the rather drastic revenue drops, Penn National Incorporated seemed to have been very ready for the hit that they would be taking due to the pandemic. That said, the company invested in several aggressive mitigation measures in the days that followed the shutdown of its facilities across the United States.
Some of these measures included finishing the month of March with $730 million of cash on the balance sheet. In addition to that, the company has also reduced its average cash burn to just about $83 million per month since April and this will continue to the end of 2020.
“Upon the reopening of our casinos, we believe Penn National is very well-positioned to resume its positive momentum. Our geographic diversification across 19 states – with no more than 15% of our revenues being derived from any single state – should be a significant benefit as states begin to open casinos on a sequential basis.”
Penn National Gaming CEO.
The company’s management expects all of these measures to not only help it weather the ongoing crisis but also keep on track in its pursuit of the other long-term growth plans.
Speaking of Long-Term Growth…
Already, Penn National Gaming is reportedly drafting up reopening plans for its casino albeit on a limited basis. Perhaps the most intriguing part of their story is the fact that their shares are higher by almost 11 percent.
Besides that, the company is also ramping up efforts to get into the online space with the launch of its Barstools Sports mobile application. This is likely to arrive in the last quarter of the year and it will be a big disruptor in the online gambling space.