Penn National Gaming’s much-anticipated Barstool Sportsbook app will launch in Pennsylvania in September, as the company says it won’t rush before then just to take advantage of the increasingly busy sports calendar.
While the possibility of an August launch existed previously, company President and CEO Jay Snowden described the new target during a Thursday morning conference call to discuss the company’s April-June financial results.
Penn National’s second quarter earnings, as with all gaming companies, have been staggered by the impact of COVID-19 casino shutdowns for multiple months starting in mid-March. It reported a net loss of $214.4 million on quarterly revenue of $305.5 million.
Still, Snowden described encouraging patronage levels and reduced costs in the reopening of all but two of the company’s 41 gaming properties in recent months, as well as growth in customers attracted to its Pennsylvania iCasino product in the COVID-19 era. He also said construction will resume this year on its two mini-casino projects in York and Berks counties, which have been rescheduled to open in the second half of 2021.
A good bit of interest from financial analysts on the conference call, meanwhile, was in the pending sportsbook app, which Penn National hopes will rival the likes of industry titans FanDuel and DraftKings for bettors’ attention.
A great first impression is the priority
If the new digital sportsbook were to launch this month after many months of preparation, it could take advantage of the summer overlap of NBA and NHL postseason competition with the return of MLB games and the scheduled start Sept. 10 of the NFL season.
The combination of those and other sports, like golf majors starting with the PGA Championship this weekend, is creating an unprecedented melding of attention-getting August activity on the sports betting calendar. Snowden noted that betting levels at Penn National’s retail sportsbooks nationally were already up 60% last weekend over the same period a year ago.
Still, Snowden on Thursday gave no specific date in September to expect the launch of the app. He offered no particular reason for why August is no longer viable while stressing timing was not the primary issue.
“What’s important to us is getting this right,” he said. “We get one chance to make a first impression. … We’re in this for the long game. Would it be nice to be live now because of some pent-up demand? Sure,” but September will still be “a heck of a time to be launching your app.”
Penn National purchased a 36% interest in the Barstool Sports multi-channel media site in January in order to take advantage of marketing the new app to its massive young following of sports fans. Snowden said that by distinctive features like tying betting options to high-profile Barstool personalities, it will be “unlike anything in the market” available from competitors.
The plan is to debut the digital sportsbook as the 10th site in Pennsylvania, where Penn National already has an online casino. It would subsequently follow in other states that have legal online/mobile sports betting and where the company has a regional presence, including Indiana, Iowa, Colorado, West Virginia, Michigan, and Mississippi.
Online casino seeing plenty of positives
Penn National owns two Pennsylvania properties, Hollywood Casino and Meadows Racetrack & Casino, and during their March-June shutdowns it relied on its Hollywood-branded iCasino to still bring revenue. As with other iGaming sites in Pennsylvania and New Jersey, its revenue increased substantially, now exceeding $5 million monthly after being just over $2 million in pre-COVID months.
Snowden said the 20,000 online players using the site recently were roughly split by thirds among those that are new to the site; those who were in the company’s database but had been dormant from activity; and those who had already been active before COVID shutdowns.
The online players skew younger — averaging around age 45 rather than 55 like in brick-and-mortar casinos – and they are among the individuals that Penn National hopes to attract to its sportsbook app from its own customer base, in addition to Barstool-oriented newcomers.
It’s been particularly encouraging, Snowden said, that those who are brick-and-mortar visitors and then add online play end up spending more overall on their gambling by multiple methods — not just switching use of the same level of funds.
Customer mix now different in reopened casinos
As Penn National’s properties have reopened across the 19 states in which it operates, Snowden said the level of activity under the constraints of social distancing guidelines and occupancy limits has been strong.
Notably, the spend-per-visit by customers has been up about 45% and the average age of visitors has been younger, reaching a demographic that has few of the entertainment alternatives like movies, concerts, and sporting events to which younger adults would normally be drawn.
“There’s a lot of new customers coming in,” Snowden said. “What we’re hearing, both solicited and unsolicited, from many of these folks is they’ve never been in a casino.
“They realize they can have a high-quality experience even in the current environment, a really fun experience, and even if we lose some of that business down the road [as other options resume], that’s probably about the same time older people are going to feel a lot more comfortable coming back to casinos.”
While pent-up demand was thought to be a big factor driving people back to casinos upon immediate reopening in May and June, patronage levels have remained consistent in July and August with the exception of lower-than-normal turnout during the July 4 holiday weekend, Snowden said.
Given all that and the reduced spending on marketing, labor, and other traditional aspects of the business, Snowden said the company is confident of reaching 90% of its prior revenue this year and attaining the same EBIDTA level.
“I’ve been really surprised in seeing such stability, not just the first day or the first week [of reopenings]. It’s been a month or two or three for properties. … I don’t have any reason to believe it’s going to fall off.”
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