Penn National Gaming has reported contracting revenues in its latest set of financial results for the three months and year ended December 31, 2020, but on the upside cited its Barstool-branded sportsbooks as having exceeded expectations.
The headline figures show that 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% year-on-year, adjusted EBITDAR declined by only 9% for the same period, reflecting structural changes that were put in place with the onset of the pandemic. These changes, said the firm, helped to expand adjusted EBITDAR margins by 580 basis points relative to Q4 2019 results, which equates to an improvement of 720 basis points when excluding properties that were closed during the quarter.
Focusing on the Barstool Sports side of the business, President and CEO Jay Snowden said: “We have seen very strong results at our properties since the Barstool rebranding of our retail sportsbooks at Ameristar Casino Black Hawk, Greektown Casino Hotel, Hollywood Casino Lawrenceburg, and Ameristar East Chicago.
“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.”
Snowden was also quick to focus on the media side of the Barstool Sports brand, adding: “The value of Barstool Sports as a media company is an overlooked part of our story. Our valued partners at Barstool experienced an incredible year in 2020, as they continued to produce highly-engaging and relevant content for their growing audience of loyal fans despite the partial shutdown of live sports.
“Barstool Sports now has over 26 million followers on TikTok, close to 27 million followers on Twitter, and more than 52 million followers on Instagram, just to highlight a few social media platforms. In 2020, Barstool saw very impressive year-over-year growth, recording its strongest revenue and EBITDA since its inception, and we expect Barstool to continue to grow profitably over the upcoming years through a diversified mix of advertising, brand licensing, and merchandise sales.
“We view Barstool Sports not only as a fantastic channel to promote our offerings, but also an undervalued media asset that has evolved from primarily a sports brand into a highly relevant sports and life-style brand. We are excited about the opportunity to unlock additional value in Barstool Sports as they continue their strong growth trajectory.”
