Penn National Stock Rides Positive Online Sports Betting Momentum to $100 a Share

Posted By Valerie Cross on January 11, 2021 - Last Updated on April 1, 2021

Penn National Gaming continues to garner positive headlines and $PENN stock investors have taken notice. The latest surge to $100 comes in a moment of positive momentum for sports betting in the US.

The $PENN hot streak has also been helped along by bullish analyst predictions, legal gambling launches, and increasing interest in online gambling stocks.

The PA-based gaming company shifted gears from regional land-based gaming to online betting months ago. That included buying a 36% share of Barstool Sports in early 2020. They are now seeing the fruits of their labor – the March 18, 2020 stock price of $4.52 a distant memory.

Barstool sportsbook and stock analysts drive Penn price

The Barstool Sportsbook launched in Pennsylvania in mid-September and has captured third-highest market share in a crowded, competitive environment. As more states roll out online betting, Barstool looks to be one of the first to market, which was far from the case in PA. (They were the tenth online sportsbook to go live in the Keystone State.)

Recent nods from stock analysts provided an extra boost to the price, no doubt. Rosenblatt Securities increased its $PENN price target from $90 to $115 on Dec. 23 in a note to investors.

“Market share in new state launches (MI and VA) as the Barstool sportsbook app will be at the same starting line as competitors. New state legislation for online sports betting and iGaming as state governments deal with the impact of COVID-19 on their budgets. Continued recovery at regional casinos, helped by the rollout of the vaccine.”

CNN Business analysts also maintain a BUY rating for Penn stock.

Positive news boosts Penn stock

As more states look to pass legislation to regulate online gambling, Penn is in good position to capitalize in new markets. Last week was dominated by news from New York that Gov. Andrew Cuomo is now in favor of online sports betting as chances for a viable bill this year increase. Massachusetts is also making moves toward legalizing. Kentucky Gov. Andy Beshear is sick of losing tax dollars to his neighbors and is also trying to mobilize his state to pass online betting.

The rolling out of coronavirus vaccines should help land-based gaming operations across the country. Penn has 41 gaming properties across 19 states.

Despite some political unrest making the market somewhat uneasy, the latest COVID-19 relief/stimulus package is also a likely booster for gaming stocks.

But the good news for Penn doesn’t stop there. Penn has been making positive headlines in association with Barstool founder Dave Portnoy‘s pet project, the Barstool Fund. He seeded the multi-million dollar relief effort for small businesses struggling to survive the pandemic with $500,000 of his own money. Several small businesses in PA got the call, and the fund continues to grow.

Last week, Penn kicked in $1 million, among some other charitable efforts to help their community as well as many of their displaced workers.

Barstool Sportsbooks multiplying

While retail sports betting is and will continue to take a back seat to online sports betting, it still has its importance. For Barstool and Penn, retail books will serve as convenient advertising for their online betting apps. They will also likely be meet-up spots for events and parties for Barstool fans (Stoolies) and bettors in various jurisdictions.

Penn has yet to rebrand the sportsbook at Hollywood Casino at Penn National in Grantville, PA. But they are opening up in other states.

In November, Colorado got a Barstool Sportsbook at the Ameristar Casino in Black Hawk. In December, Penn National’s two Indiana properties are got re-branded Barstool Sportsbooks. As did Michigan.

  • Dec. 23 – Hollywood Casino Lawrenceburg
  • Dec. 24 – Ameristar Casino East Chicago (in East Chicago, IN)
  • Dec. 23 – Greektown Casino Hotel (Detroit, MI)

About the rebranded books in Indiana, Rafael Verde, senior vice president of regional operations for Penn National said:

“The new designs incorporate the spirit of the Barstool Sports brand, resulting in unique sports wagering and dining experiences that we expect our customers will thoroughly enjoy.”

Penn National online sports betting opportunities coming soon

While the Barstool Sportsbook app is only live in PA so far, that will soon change. Colorado is expected to launch online betting early in 2021, and Barstool should be one of the first to go live. Other states where Penn plans to launch online sportsbooks, according to Legal Sports Report:

  • Illinois
  • Indiana
  • New Jersey
  • Virginia
  • West Virginia

But Barstool is not the only online betting brand in Penn’s playbook.

The online casino game

Sports betting gets a lot of the media attention, but Penn’s online casino game is even more important for the bottom line. Online casinos bring in more revenue than sportsbooks, and the Hollywood online casino is an important brand and vertical for Penn National.

In PA, the Hollywood Casino has brought in nearly $106 million in revenue since launching in mid-July 2019. In their first 2.5 months of sports betting, the Barstool app brought in:

  • September: -$2.4. million
  • October: $3.4 million
  • November: $3.8 million

While online sportsbook launches are important, Penn will also be looking to launch online casinos as more jurisdictions legalize and launch iGaming.

In another recent twist that has likely contributed in part to recent stock jumps, Penn has partnered with BetMGM in PA. BetMGM gained approval to enter the PA online betting market, but needed a land-based partner to do so.

The BetMGM online casino that launched Dec. 4 did so under Penn’s Hollywood Casino (Grantville) license. Then, the BetMGM online sportsbook made its official PA debut Dec. 18 under Penn’s Hollywood Casino Morgantown (future mini-casino) license.

Lead image via Dreamstime.

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