Penn: Having Strip property not essential to growth strategy

Penn National Gaming Inc.’s apical enforcement connected Thursday told investors that having a Strip spot isn’t indispensable for the company’s strategy.

“Generally speaking, I don’t deliberation it’s imperative that we person a Las Vegas Strip plus fixed the attack we person astir (developing an omnichannel operation),” Penn President, CEO and Director Jay Snowden said during the company’s third-quarter net call. “I deliberation having practice crossed states passim the U.S. is perfectly a strategical imperative for america and we’ve mostly accomplished that goal.”

“If we were to find the close plus astatine the close determination astatine the close price, of people we’d beryllium interested.”

Penn was an unsuccessful bidder to get The Cosmopolitan of Las Vegas erstwhile MGM Resorts International snatched up the edifice successful precocious September for $5.65 billion.

Snowden was responding to an analyst’s question astir the astonishment announcement MGM made during its net telephone Wednesday that it intends to merchantability The Mirage. No terms tag oregon prospective purchaser was named.

Disciplined approach

He said Penn investors shouldn’t expect the institution to overpay for a Strip property.

“It would beryllium large to person an plus that we could make immoderate retention worth erstwhile (customers are) successful Vegas,” Snowden said. “But we don’t deliberation that specified a strategical imperative that we would pursuit an plus oregon overpay. That’s however I consciousness currently. We’ll footwear the tires if there’s thing retired there, we’re going to beryllium disciplined successful our attack and you know, yes, you’re going to person to wage a higher aggregate for a Las Vegas Strip operating institution than you would successful astir oregon each determination markets.”

Penn already operates a Strip property, the Tropicana, which is owned by its existent property concern spot partner, Gaming & Leisure Properties. In April, Providence, Rhode Island-based Bally’s Corp. agreed to bargain the Tropicana from Gaming & Leisure Properties for $308 million.

Penn besides operates the M Resort successful Henderson.

While Snowden said Penn had hoped to bargain The Cosmopolitan, which helium described arsenic a “once-in-a-lifetime accidental for best-in-class assets,” the institution won’t overspend.

“There are a batch of variables that you person to look astatine plus by plus arsenic they go disposable — if they go available,” Snowden said. “But you should presume that we are not going to beryllium chasing thing that we don’t judge we tin get a bully instrumentality on.”

On Thursday, Penn reported nett income of $86.1 million, 52 cents a share, connected gross of $1.512 cardinal for the 4th that ended Sept. 30. In the aforesaid 4th a twelvemonth earlier, the institution reported nett income of $141.2 million, 93 cents a share, connected gross of $1.13 billion.

Sports betting initiative

During the call, Snowden besides commented connected backing lobbying efforts to backmost a sports-betting inaugural successful California. Penn, helium said, is 1 of 7 companies backing the inaugural with $12.5 million.

“I deliberation (the initiative) has been constructed successful a mode that’s bully for the authorities and bully for those that run casinos successful the authorities today,” Snowden said. “We’re going to beryllium beauteous heavy successful signature gathering mode successful the coming weeks and months and there’s been a small spot of absorption truthful we’re trying to recognize that. We really privation to bash this successful a mode that was wholly complementary to the ballot inaugural that the tribes already had retired determination earlier we announced the ballot inaugural and the connection of the ballot initiative.”

Joe Greff, an expert with New York-based JP Morgan, characterized Penn’s 4th arsenic “mixed,” noting that the institution generated much gross than a twelvemonth ago, but failed to conscionable currency travel expectations due to the fact that of respective one-time expenses.

In summation to the California lobbying effort, Penn had other expenses resulting from Hurricane Ida and determination flare-ups of the delta variant of the coronavirus. The institution besides reported $7.5 cardinal successful start-up costs for Penn’s sportsbook partner, Barstool Sports.

Penn shares, traded connected the Nasdaq exchange, plummeted by double-digit percentages successful volatile midday trading Thursday connected dense volume.

This is simply a processing story. Check backmost for updates.

Contact Richard N. Velotta astatine rvelotta@reviewjournal.com oregon 702-477-3893. Follow @RickVelotta connected Twitter.