Penn National Gaming recently closed on $600 million of financing through a debt offering and stock sale—and that could increase by $90 million if underwriters exercise options. The additional financing gives the company the financial capability to speed up the launch of its “omnichannel growth strategy,” including a partnership with sports media platform Barstool Sports.
Penn National paid $163 million for a 36 percent ownership stake in Barstool, including Barstool-branded retail sportsbooks in Penn National’s regional casinos and a mobile sports wagering application and online casino site expected to launch this fall.
In the company’s recent first-quarter earnings conference call, Penn National officials said the company said had $730.7 million in cash at end of March—enough to survive without any revenue until the end of the year. The company now has more than $1.3 billion in liquidity.
Penn National President and Chief Executive Officer Jay Snowden said, “We had enough liquidity to get us through the end of the year, but we decided to significantly solidify the balance sheet going into 2021. The financing allows us to invest in our interactive strategy and accelerate that rollout. We wanted to come out of the pandemic closures as a strong company and playing offense. The interactive strategy gives us the firepower to do that.”
Snowden said Penn National will spend $8 million to $10 million to develop the sports betting app and rebrand the sportsbooks. He added the company hopes to attract a younger demographic to its retail sportsbooks and mobile sports wagering app by branding them with the Barstool name. Penn National’s customer loyalty program has 20 million members, with an average age in the mid-50s. About half of Barstool’s 66 million-person audience are millennials or generation X.
Penn National also is exploring other markets to increase its sports-betting presence, including Nevada, Snowden said. He stated Penn National plans to take over the sportsbook operations at its M Resort in the southern Las Vegas Valley a launch the Barstool brand there as well as at the company’s two small casinos in Northern Nevada. “The great thing is, our interactive strategy is 100 percent owned by us,” Snowden said.
