Penn National Gaming reported its Q1 FY 2022 earnings on May 5. The Wyomissing, PA-based casino and sports betting company boasted record first-quarter revenue. However, $PENN quarterly earnings of $0.29 per share missed the Zacks Consensus Estimate of $0.45 per share.
Quarter 1 2022 demand trends continue in Q2 to date and CEO Jay Snowden is optimistic, especially with recent openings of Pennsylvania casinos.
“We remain encouraged by the ongoing visitation from younger demographics and are focused on continuing to reimagine our properties and offerings to enhance the entertainment appeal to this steadily growing segment of consumers,” said Snowden. “Our database grew across all worth segments by 14%, led by 28% year-over-year growth in our VIP segment and 11% in our core segments driven by our new online and retail sportsbook offerings and our recently opened Hollywood Casino York and Morgantown casinos in Pennsylvania.”
Key figures for Penn National Gaming in Q1 2022
- Record revenue of $1.56 billion, a 23% increase from the prior-year period.
- The Northeast segment led for revenue with $658.5 million.
- iGaming produced $141.5 million in revenue.
First-quarter earnings presentation highlights:
- Increased digital registrations on the mychoice app by over 1 million.
- 53% YoY increase in table THEO (expected win for the house) in ages 21-44 at properties with retail sportsbooks.
- Barstool Sportsbook and casino is rated 4.8 out of 5 stars in the App Store, tied for first for sports betting apps.
- New payment methods on the app, MasterCard and Apple Pay, will be available in Q2 2022.
Penn National Gaming in Pennsylvania
Penn National Gaming operates 44 casinos in the United States and Canada. It also owns a 36% stake in Barstool Sports. In Pennsylvania, Penn National operates:
- Hollywood Casino at Penn National Race Course
- Hollywood Casino at the Meadows
- Two mini-casinos: In August 2021, Hollywood Casino York opened, followed by Hollywood Casino Morgantown in December 2022.
Portnoy on $PENN stock, politics and abortion rights
Portnoy has a vast presence across social media platforms and has over 2.7 million followers on Twitter. Penn National Gaming has repeatedly said they will not engage in the heavy promotional spend to acquire customers like their competitors. But instead, they rely on the personalities of Barstool, mainly Portnoy, to build brand awareness and loyalty.
The Q4 2021 earnings call started with Snowden defending Barstool founder Dave Portnoy over the allegations of sexual misconduct in a story by Business Insider. Portnoy was only mentioned a few times during Thursday’s Q1 call in the context of how Penn National leverages him and Dan “Big Cat” Katz as content creators instead of spending on marketing like competitors.
In the 24 hours before Penn’s Q1 earnings, Portnoy’s most-liked Tweet was:
$Penn stock hasn’t performed well lately. (I won’t mention Draftkings, Netflix and Shopify are down double and triple compared to what we are ytd) Instead I’m here to tell you I value our customers and investors + that’s why I’m flying middle row commercial to Vegas. #bornleader
— Dave Portnoy (@stoolpresidente) May 4, 2022
Portnoy also gave his thoughts on abortion and Roe v. Wade on the “Dave Portnoy Show With Eddie and Co.” on May 3. A one-minute clip was posted on Twitter by Barstool blogger Uncle Chaps on May 4 and has 825k views.
Comments from Penn CEO Jay Snowden
On the openings of Hollywood Casino York and Morgantown in addition to the flagship casino Hollywood Casino at Penn National Race Course:
“Our teams in Central Pennsylvania have successfully opened two new properties in the last year and have done a terrific job growing the overall database for the company and ensuring we are looking at all three business and our results there in an incremental basis. Cannibalization in Central PA has been minimal and early combined results have been encouraging.”
“We believe our differentiated approach will benefit us going forward as the relationships we have and continue to build with our customers are based on delivering great products and customer service, media integration, branded and experiential events and promotions, and direct connections to our users via live streaming and social media engagement via our content creators led by Dave Portnoy and Big Cat. We don’t lead with discounts. These advantages are already proving themselves real-time and will deliver, what we believe will be, the best-in-class margins over the long-term.”
Penn National Gaming net gaming revenue
Snowden reiterated that Penn National believes net gaming revenue (NGR) is a more relevant measure of an online sportsbook’s performance as opposed to handle market share because that revenue is largely diluted by marketing and promotional expenses. Instead, he wants Barstool online sportsbook to be measured by NGR.
Barstool PA Sportsbook in March
- Revenue: $2.7 million
- Promo credits: $1 million
- NGR: $1.6 million
Barstool in February 2022:
- Revenue: $1.9 million
- Promo credits: $859,553
- NGR: $1.1 million
Barstool in January 2022:
- Revenue: $3.3 million
- Promo credits: $1.7 million
- NGR: $1.5 million
Lead image c/o Shutterstock