- PENN Moved Aggressively to Improve
Liquidity in the First Quarter, Allowing the Company to Focus on
Long-Term Objectives -
- PENN to Benefit from State-by-State
Resumption of Operations, with Nation’s Largest, Most Diversified
Regional Gaming Footprint -
- Omni-Channel Growth Strategy Remains
Intact with Scheduled Launch of Barstool Sportsbook App in the
Third Quarter -
Penn National Gaming, Inc. (NASDAQ: PENN) (“Penn National” or
the “Company”) today reported financial results for the three
months ended March 31, 2020.
2020 First Quarter Financial Summary
Jay Snowden, President and Chief Executive Officer, commented:
“Penn National saw a phenomenal start to 2020, with record results
in January and February. Our Company was performing well ahead of
guidance in every segment, driven in large part by the introduction
of retail sports betting at several properties, which has served as
a catalyst for both gaming and non-gaming revenue. We also saw a
strong positive reaction, including our stock price hitting an
all-time high, following the announcement of our strategic
investment in Barstool Sports, which reflects our strategy to
become the best-in-class omni-channel provider of retail and online
gaming and sports betting entertainment.”
Snowden continued, “That momentum was cut short in mid-March by
the COVID-19 pandemic, which required the temporary closure of all
41 of our properties. As a result, our first quarter revenues
decreased $166.5 million year-over-year, to $1.12 billion, and we
incurred a net loss of $608.6 million due to $616.1 million of
impairment losses. While we have faced unprecedented challenges in
recent weeks, we are confident that the Company’s long-term growth
strategy remains intact, supported by our differentiated
omni-channel approach. We sincerely thank the first responders,
health care workers and essential personnel around the world who
are keeping us safe through this challenging time, and we hope and
pray for a swift end to this unprecedented crisis.”
COVID-19 Mitigation Efforts and Resumption of
Operations
As previously disclosed, Penn National undertook several
aggressive mitigation measures in the days following the temporary
closures of its facilities to solidify the balance sheet and
improve liquidity. As a result, the Company finished March with
$730.7 million of cash on the balance sheet, and its average cash
burn (assuming complete closure of all properties) has been reduced
to approximately $83 million per month from April through the end
of the year. The Company is confident these measures will allow it
to weather the temporary suspension of operations without
sacrificing any of its long-term objectives.
Mr. Snowden commented, “Upon the reopening of our casinos, we
believe Penn National is very well-positioned to resume its
positive momentum. Our geographic diversification across 19 states
- with no more than 15% of our revenues being derived from any
single state - should be a significant benefit as states begin to
open casinos on a sequential basis. We expect our regional gaming
markets to rebound sooner than destination markets by virtue of our
casinos being located in suburban areas that are more easily
accessible by car from key population centers.”
Penn National Long-term Growth Strategy Remains On
Course
Mr. Snowden continued, “During the mandated closures of our
properties, our management team has undertaken a comprehensive
reevaluation of our corporate and property operating structures to
improve efficiencies, and we are exploring new technologies and
innovations that could help reimagine our casinos and enhance the
guest experience. We are also in the process of making meaningful
upgrades to expand the reach of our industry-leading
mychoice loyalty program. We expect the mychoice
program to be a powerful tool for our omni-channel strategy, and we
are taking steps to connect our land-based casinos to our sports
betting and iCasino products to offer customers a compelling
incentive to consolidate play across our various platforms. This
omni-channel approach will be bolstered by the broad appeal of
Barstool Sports, and we look forward to attracting Barstool fans to
our casinos through special events and talent appearances once the
virus has subsided.
“While our operating team has been busy reconfiguring our
casinos for a post-COVID-19 world, our interactive team has been
hard at work laying the foundation for future growth online. We
have been able to continue the development of our Barstool
Sportsbook app and remain on schedule for launch in the third
quarter of 2020 on what we anticipate will be a more level playing
field with our competitors given the extended absence of major live
sports in the months leading up to our launch. Our team of
engineers is creating a best-in-class sports betting product, and
the Barstool brand, loyal audience and marketing engine will help
drive meaningful market share as the product is introduced across
our database of 20 million casino customers and Barstool’s audience
of over 66 million fans.
“The past several weeks have also reinforced our investment
thesis in Barstool Sports. Despite the lack of live sporting
events, Barstool has continued to create highly entertaining
content in recent weeks, with blog traffic increasing over 20% in
April, video views up over 50% and social media accounts seeing
meaningful growth. In addition, Barstool has shown continued
success in utilizing emerging platforms to expand its reach,
including explosive growth on TikTok and the introduction of live
video game streaming on Twitch. Barstool’s highly diverse and
engaging content is proving to be more relevant than ever in the
key demographics we will be targeting, and we continue to believe
Barstool’s growing, loyal audience will lead to meaningful
reductions in customer acquisition and promotional costs for our
sports betting product.
“While Penn National’s overall first quarter results were mixed
due to the coronavirus, Penn Interactive had a notably strong first
quarter, beating budgeted revenue and EBITDA despite the loss of
retail sportsbook revenue for most of March. That momentum has
carried into the second quarter, with Penn Interactive experiencing
significant growth in users and revenue for both its social and
real money gaming products.
“We are especially encouraged by the early results of our
iCasino product in Pennsylvania. Despite the state’s excessively
high tax rate, which has limited our marketing spend, 40,000
customers have registered for our iCasino product thus far, with
roughly 66% of those players being new to our ecosystem or
reconnected former patrons. The average age of these players is
much younger than our core land-based player, which highlights the
lack of cannibalization iCasino has had on our brick and mortar
business in the first quarter. Our experience in Pennsylvania has
reinforced our view that our casino operating prowess and database
will be a significant competitive advantage as additional states
authorize iCasino over the coming years - particularly when
combined with the potential for significant iCasino cross-sell from
the Barstool Sportsbook.
“Penn National is the only operator in the U.S. with a large,
geographically diversified land-based gaming footprint, a
well-known sports brand, a fully aligned marketing partner and a
wholly-owned sports betting and iCasino subsidiary. As such, we are
strongly positioned to benefit from the continuing proliferation of
sports betting and iCasino legislation - something we expect to
accelerate as states seek new tax revenues in the aftermath of the
virus. While the last several weeks have been challenging for the
Company, our team members and the entire industry, we remain firmly
convinced of the long-term potential of our highly differentiated
omni-channel approach.”
Summary of First Quarter Results
For the three months ended
March 31,
(in millions,
except per share data, unaudited)
2020
2019
Revenues
$
1,116.1
$
1,282.6
Net income (loss)
$
(608.6
)
$
41.0
Adjusted EBITDA (1)
$
154.8
$
306.7
Rent expense associated with triple net
operating leases (2)
97.5
84.7
Adjusted EBITDAR (1)
$
252.3
$
391.4
Cash payments to our REIT Landlords under
Triple Net Leases (3)
$
223.8
$
207.9
Diluted earnings (loss) per common
share
$
(5.26
)
$
0.35
(1)
See the “Non-GAAP Financial Measures” section below for more
information as well as the definitions of Adjusted EBITDA and
Adjusted EBITDAR. Additionally, see below for reconciliations of
these Non-GAAP financial measures to their GAAP equivalent
financial measure.
(2)
Solely comprised of rent expense associated with the operating
lease components contained within the Penn Master Lease and the
Pinnacle Master Lease (referred to collectively as our “Master
Leases”), the Meadows Lease, the Margaritaville Lease, and the
Greektown Lease, which we refer to as our “triple net operating
leases.” The finance lease components contained within our Master
Leases (primarily buildings) are recorded to interest expense (as
opposed to rent expense) in accordance with Accounting Standards
Codification Topic 842, “Leases.”
(3)
Solely comprised of cash payments made to Gaming and Leisure
Properties, Inc. (NASDAQ: GLPI) and VICI Properties Inc. (NYSE:
VICI) (referred to collectively as our “REIT Landlords”) under the
Master Leases, the Meadows Lease, the Margaritaville Lease, and the
Greektown Lease (referred to collectively as our “Triple Net
Leases”).
PENN NATIONAL GAMING, INC. AND
SUBSIDIARIES
Segment Information
The Company aggregates its
properties into four reportable segments: Northeast, South, West
and Midwest.
For the three months ended
March 31,
(in millions, unaudited)
2020
2019
Revenues:
Northeast segment (1)
$
520.7
$
550.6
South segment (2)
223.3
292.0
West segment (3)
126.6
158.6
Midwest segment (4)
228.1
271.2
Other (5)
20.3
10.2
Intersegment eliminations (6)
(2.9
)
—
Total revenues
$
1,116.1
$
1,282.6
Adjusted EBITDAR:
Northeast segment (1)
$
124.5
$
164.8
South segment (2)
52.6
97.8
West segment (3)
24.6
49.9
Midwest segment (4)
69.5
99.2
Other (5)
(18.9
)
(20.3
)
Total Adjusted EBITDAR (7)
$
252.3
$
391.4
(1)
The Northeast segment consists of the following properties:
Ameristar East Chicago, Greektown Casino-Hotel (acquired May 23,
2019), Hollywood Casino Bangor, Hollywood Casino at Charles Town
Races, Hollywood Casino Columbus, Hollywood Casino Lawrenceburg,
Hollywood Casino at Penn National Race Course, Hollywood Casino
Toledo, Hollywood Gaming at Dayton Raceway, Hollywood Gaming at
Mahoning Valley Race Course, Marquee by Penn, Meadows Racetrack and
Casino, and Plainridge Park Casino.
(2)
The South segment consists of the following properties: 1st
Jackpot Casino, Ameristar Vicksburg, Boomtown Biloxi, Boomtown
Bossier City, Boomtown New Orleans, Hollywood Casino Gulf Coast,
Hollywood Casino Tunica, L’Auberge Baton Rouge, L’Auberge Lake
Charles, and Margaritaville Resort Casino. Prior to its closure on
June 30, 2019, Resorts Casino Tunica was also included in the South
segment.
(3)
The West segment consists of the following properties: Ameristar
Black Hawk, Cactus Petes and Horseshu, M Resort, Tropicana Las
Vegas, and Zia Park Casino.
(4)
The Midwest segment consists of the following properties:
Ameristar Council Bluffs; Argosy Casino Alton; Argosy Casino
Riverside; Hollywood Casino Aurora; Hollywood Casino Joliet; our
50% investment in Kansas Entertainment, which owns Hollywood Casino
at Kansas Speedway; Hollywood Casino St. Louis; Prairie State
Gaming; and River City Casino.
(5)
The Other category consists of the Company’s stand-alone racing
operations, namely Sanford-Orlando Kennel Club, and the Company’s
joint venture interests in Sam Houston Race Park, Valley Race Park,
and Freehold Raceway. The Other category also includes Penn
Interactive, which operates our social gaming, internally-branded
retail sportsbooks, and iGaming; our management contract for Retama
Park Racetrack; and our live and televised poker tournament series
that operates under the trade name, Heartland Poker Tour (“HPT”).
Expenses incurred for corporate and shared services activities that
are directly attributable to a property or are otherwise incurred
to support a property are allocated to each property. The Other
category also includes corporate overhead costs, which consists of
certain expenses, such as: payroll, professional fees, travel
expenses and other general and administrative expenses that do not
directly relate to or have otherwise not been allocated to a
property. For the three months ended March 31, 2020, corporate
overhead costs were $24.2 million, compared to $23.1 million for
the corresponding prior year period.
(6)
Represents the elimination of intersegment revenues, associated
with Penn Interactive and HPT.
(7)
As noted within the “Non-GAAP Financial Measures” section below,
Adjusted EBITDAR is presented on a consolidated basis outside the
financial statements solely as a valuation metric or for
reconciliation purposes.
Although Penn National did not own Greektown for the three
months ended March 31, 2019, the Company believes the following
supplemental information is useful to investors to assess the value
this transaction brings to the Company and its shareholders.
Revenues and Adjusted EBITDAR earned by Greektown for the three
months ended March 31, 2019 were $83.7 million and $26.7 million,
respectively. The operating results of Greektown were derived from
historical financial information. Greektown operating results were
adjusted to conform to Penn National’s methodology of allocating
certain corporate expenses to properties. Revenues and Adjusted
EBITDAR earned by Greektown do not reflect any cost savings or
revenue synergies from potential operating efficiencies or
associated costs to achieve such savings or synergies that are
expected to result from this transaction.
PENN NATIONAL GAMING, INC. AND
SUBSIDIARIES
Reconciliation of Comparable
GAAP Financial Measure to Adjusted EBITDA,
Adjusted EBITDAR, and Adjusted
EBITDAR Margin
For the three months ended
March 31,
(in millions,
unaudited)
2020
2019
Net income (loss)
$
(608.6
)
$
41.0
Income tax expense (benefit)
(99.5
)
14.8
Income from unconsolidated affiliates
(4.1
)
(5.7
)
Interest expense, net
129.8
132.3
Other expense
21.8
—
Operating income (loss)
(560.6
)
182.4
Stock-based compensation
6.0
3.4
Cash-settled stock-based awards
variance
(8.9
)
0.4
Loss on disposal of assets
0.6
0.5
Contingent purchase price
(2.2
)
4.7
Pre-opening and acquisition costs
3.2
4.4
Depreciation and amortization
95.7
104.1
Impairment losses
616.1
—
Insurance recoveries, net of deductible
charges
(0.1
)
—
Income from unconsolidated affiliates
4.1
5.7
Non-operating items of joint venture
(1)
0.9
1.1
Adjusted EBITDA
154.8
306.7
Rent expense associated with triple net
operating leases
97.5
84.7
Adjusted EBITDAR
$
252.3
$
391.4
Net income (loss) margin
(54.5
)%
3.2
%
Adjusted EBITDAR margin
22.6
%
30.5
%
(1)
Consists principally of depreciation and
amortization associated with the operations of Hollywood Casino at
Kansas Speedway.
PENN NATIONAL GAMING, INC. AND
SUBSIDIARIES
Condensed Consolidated
Statements of Operations
For the three months ended
March 31,
(in millions, except per share data,
unaudited)
2020
2019
Revenues
Gaming
$
902.9
$
1,034.5
Food, beverage, hotel, and other
213.2
248.1
Total revenues
1,116.1
1,282.6
Operating expenses
Gaming
500.9
547.4
Food, beverage, hotel and other
157.0
161.8
General and administrative
307.0
286.9
Depreciation and amortization
95.7
104.1
Impairment losses
616.1
—
Total operating expenses
1,676.7
1,100.2
Operating income (loss)
(560.6
)
182.4
Other income (expenses)
Interest expense, net
(129.8
)
(132.3
)
Income from unconsolidated affiliates
4.1
5.7
Other
(21.8
)
—
Total other expenses
(147.5
)
(126.6
)
Income (loss) before income
taxes
(708.1
)
55.8
Income tax benefit (expense)
99.5
(14.8
)
Net income (loss)
(608.6
)
41.0
Less: Net loss attributable to
non-controlling interest
—
—
Net income (loss) attributable to Penn
National
$
(608.6
)
$
41.0
Earnings (loss) per common
share:
Basic earnings (loss) per common share
$
(5.26
)
$
0.35
Diluted earnings (loss) per common
share
$
(5.26
)
$
0.35
Weighted-average basic shares
outstanding
115.7
116.3
Weighted-average diluted shares
outstanding
115.7
118.6
Selected Financial Information
Balance Sheet Data
(in millions, unaudited)
March 31, 2020
December 31, 2019
Cash and cash equivalents
$
730.7
$
437.4
Bank debt
$
2,416.7
$
1,896.5
Notes
399.5
399.4
Other long-term obligations (1)
80.8
89.2
Total traditional debt (2)
$
2,897.0
$
2,385.1
Traditional net debt
$
2,166.3
$
1,947.7
(1)
Other long-term obligations as of March 31, 2020 primarily
include $68.8 million for the present value of the relocation fees
due for both Hollywood Gaming at Dayton Raceway and Hollywood
Gaming at Mahoning Valley Race Course, and $12.0 million related to
our repayment obligation on a hotel and event center located near
Hollywood Casino Lawrenceburg.
(2)
Amounts are inclusive of debt discount and debt issuance costs
of $31.9 million and $33.9 million, respectively.
Kansas Entertainment Distributions
The Company’s definitions of Adjusted EBITDA and Adjusted
EBITDAR add back our share of the impact of non-operating items
(such as depreciation and amortization) at our Kansas Entertainment
joint venture. Kansas Entertainment does not currently have, nor
has it ever had, any indebtedness. The table below presents cash
flow distributions we have received from our Kansas Entertainment
investment.
For the three months ended
March 31,
(in millions,
unaudited)
2020
2019
Cash flow distributions
$
8.7
$
6.5
Cash Flow Data
The table below summarizes certain cash expenditures incurred by
the Company.
For the three months ended
March 31,
(in millions,
unaudited)
2020
2019
Cash payments to our REIT Landlords under
Triple Net Leases (1)
$
223.8
$
207.9
Cash refunds related to income taxes,
net
$
(1.1
)
$
(1.7
)
Cash paid for interest on traditional
debt
$
33.8
$
38.5
Maintenance capital expenditures
$
29.7
$
36.2
(1)
The three months ended March 31, 2020 include $13.9 million
relating to the Greektown Lease, which was acquired in May
2019.
Guidance
As previously disclosed, in light of the COVID-19 outbreak and
ongoing uncertainty regarding its magnitude and duration, Penn
National has withdrawn its 2020 financial guidance provided on
February 6, 2020.
Non-GAAP Financial Measures
The Non-GAAP Financial Measures used in this press release
include Adjusted EBITDA, Adjusted EBITDAR, and Adjusted EBITDAR
margin. These non-GAAP financial measures should not be considered
a substitute for, nor superior to, financial results and measures
determined or calculated in accordance with GAAP.
We define Adjusted EBITDA as earnings before interest expense,
net; income taxes; depreciation and amortization; stock-based
compensation; debt extinguishment and financing charges; impairment
losses; insurance recoveries and deductible charges; changes in the
estimated fair value of our contingent purchase price obligations;
gain or loss on disposal of assets; the difference between budget
and actual expense for cash-settled stock-based awards; pre-opening
and acquisition costs; and other income or expenses. Adjusted
EBITDA is inclusive of income or loss from unconsolidated
affiliates, with our share of non-operating items (such as
depreciation and amortization) added back for our joint venture in
Kansas Entertainment. Adjusted EBITDA is inclusive of rent expense
associated with our triple net operating leases (the operating
lease components contained within the Penn Master Lease and
Pinnacle Master Lease (primarily land), the Meadows Lease, the
Margaritaville Lease, and the Greektown Lease). Although Adjusted
EBITDA includes rent expense associated with our triple net
operating leases, we believe Adjusted EBITDA is useful as a
supplemental measure in evaluating the performance of our
consolidated results of operations.
Adjusted EBITDA has economic substance because it is used by
management as a performance measure to analyze the performance of
our business, and is especially relevant in evaluating large,
long-lived casino-hotel projects because it provides a perspective
on the current effects of operating decisions separated from the
substantial non-operational depreciation charges and financing
costs of such projects. We present Adjusted EBITDA because it is
used by some investors and creditors as an indicator of the
strength and performance of ongoing business operations, including
our ability to service debt, and to fund capital expenditures,
acquisitions and operations. These calculations are commonly used
as a basis for investors, analysts and credit rating agencies to
evaluate and compare operating performance and value companies
within our industry. In order to view the operations of their
casinos on a more stand-alone basis, gaming companies, including
us, have historically excluded from their Adjusted EBITDA
calculations certain corporate expenses that do not relate to the
management of specific casino properties. However, Adjusted EBITDA
is not a measure of performance or liquidity calculated in
accordance with GAAP. Adjusted EBITDA information is presented as a
supplemental disclosure, as management believes that it is a
commonly-used measure of performance in the gaming industry and
that it is considered by many to be a key indicator of the
Company’s operating results.
We define Adjusted EBITDAR as Adjusted EBITDA (as defined above)
plus rent expense associated with triple net operating leases
(which is a normal, recurring cash operating expense necessary to
operate our business). Adjusted EBITDAR is presented on a
consolidated basis outside the financial statements solely as a
valuation metric. Management believes that Adjusted EBITDAR is an
additional metric traditionally used by analysts in valuing gaming
companies subject to triple net leases since it eliminates the
effects of variability in leasing methods and capital structures.
This metric is included as supplemental disclosure because (i) we
believe Adjusted EBITDAR is traditionally used by gaming operator
analysts and investors to determine the equity value of gaming
operators and (ii) Adjusted EBITDAR is one of the metrics used by
other financial analysts in valuing our business. We believe
Adjusted EBITDAR is useful for equity valuation purposes because
(i) its calculation isolates the effects of financing real estate;
and (ii) using a multiple of Adjusted EBITDAR to calculate
enterprise value allows for an adjustment to the balance sheet to
recognize estimated liabilities arising from operating leases
related to real estate. However, Adjusted EBITDAR when presented on
a consolidated basis is not a financial measure in accordance with
GAAP, and should not be viewed as a measure of overall operating
performance or considered in isolation or as an alternative to net
income because it excludes the rent expense associated with our
triple net operating leases and is provided for the limited
purposes referenced herein. Adjusted EBITDAR margin is defined as
Adjusted EBITDAR on a consolidated basis (as defined above) divided
by revenues on a consolidated basis. Adjusted EBITDAR margin is
presented on a consolidated basis outside the financial statements
solely as a valuation metric.
Each of these non-GAAP financial measures is not calculated in
the same manner by all companies and, accordingly, may not be an
appropriate measure of comparing performance among different
companies. See the above presented “supplemental information”
tables for reconciliations of these measures to the GAAP equivalent
financial measures.
Conference Call, Webcast and Replay Details
Penn National is hosting a conference call and simultaneous
webcast at 9:00 am ET today, both of which are open to the general
public. The conference call number is 212-231-2905. Please call
five minutes in advance to ensure that you are connected prior to
the presentation. Questions will be reserved for call-in analysts
and investors. Interested parties may also access the live call on
the Internet at www.pngaming.com. Please allow 15 minutes to
register and download and install any necessary software. A replay
of the call can be accessed for thirty days on the Internet at
www.pngaming.com.
This press release, which includes financial information to be
discussed by management during the conference call and disclosure
and reconciliation of non-GAAP financial measures, is available on
the Company’s web site, www.pngaming.com, in the “Investors”
section (select link for “Press Releases”).
About Penn National Gaming
Penn National Gaming owns, operates or has ownership interests
in 41 gaming and racing properties in 19 jurisdictions and video
gaming terminal operations with a focus on slot machine
entertainment. We also offer live sports betting at our properties
in Indiana, Iowa, Michigan, Mississippi, Pennsylvania and West
Virginia. In total, Penn National’s properties feature
approximately 50,000 gaming machines, 1,300 table games and 8,800
hotel rooms. In addition, the Company operates an interactive
gaming division through its subsidiary, Penn Interactive Ventures,
LLC, which launched iCasino in Pennsylvania and, through strategic
partnerships, operates online sports betting in Indiana,
Pennsylvania and West Virginia. The Company also has a leading
customer loyalty program, mychoice, with over five million active
customers.
Forward Looking Statements
This press release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements can be identified by the use of
forward-looking terminology such as “expects,” “believes,”
“estimates,” “projects,” “intends,” “plans,” “goal,” “seeks,”
“may,” “will,” “should,” or “anticipates” or the negative or other
variations of these or similar words, or by discussions of future
events, strategies or risks and uncertainties. Specifically,
forward looking statements include, but are not limited to,
statements regarding: COVID-19; the length of time the Company’s
gaming properties will be required to remain closed and the impact
of these closures on the Company and its stakeholders; demand for
gaming once the gaming properties reopen as well as the impact of
post-opening restrictions; the impact of COVID-19 on general
economic conditions, capital markets, unemployment and the
Company’s liquidity, operations, supply chain and personnel; the
potential benefits and expected timing of the Morgantown and
Perryville transactions with GLPI; the Company’s estimated cash
burn and future liquidity, future revenue and Adjusted EBITDAR,
including from our iCasino business in Pennsylvania; the expected
benefits and potential challenges of the investment in Barstool
Sports, including the benefits for the Company’s online and retail
sports betting and iCasino products; the expected financial returns
from the transaction with Barstool Sports; the expected launch of
the Barstool-branded mobile sports betting product and its future
revenue and profit contributions; growth opportunities and
potential synergies related to the Pinnacle Acquisition; our
expectations of future results of operations and financial
condition; our expectations for our properties, our development
projects or our iGaming initiatives; the timing, cost and expected
impact of planned capital expenditures on our results of
operations; our expectations with regard to the impact of
competition; our expectations with regard to acquisitions,
potential divestitures and development opportunities, as well as
the integration of and synergies related to any companies we have
acquired or may acquire; the outcome and financial impact of the
litigation in which we are or will be periodically involved; the
actions of regulatory, legislative, executive or judicial decisions
at the federal, state or local level with regard to our business
and the impact of any such actions; our ability to maintain
regulatory approvals for our existing businesses and to receive
regulatory approvals for our new business partners; our
expectations with regard to the impact of competition in online
sports betting, iGaming and retail/mobile sportsbooks as well as
the potential impact of this business line on our existing
businesses; the performance of our partners in online sports
betting, iGaming and retail/mobile sportsbooks, including the risks
associated with any new business, the actions of regulatory,
legislative, executive or judicial decisions at the federal, state
or local level with regard to online sports betting, iGaming and
retail/mobile sportsbooks and the impact of any such actions; and
our expectations regarding economic and consumer conditions. Such
statements are all subject to risks, uncertainties and changes in
circumstances that could significantly affect the Company’s future
financial results and business.
Accordingly, the Company cautions that the forward-looking
statements contained herein are qualified by important factors that
could cause actual results to differ materially from those
reflected by such statements. Such factors include, but are not
limited to: (a) the magnitude and duration of the impact of
COVID-19 on general economic conditions, capital markets,
unemployment and the Company’s liquidity, operations, supply chain
and personnel; (b) industry, market, economic, political,
regulatory and health conditions; (c) disruptions in operations
from data protection breaches, cyberattacks, extreme weather
conditions, medical epidemics or pandemics such as the COVID-19,
and other natural or manmade disasters or catastrophic events; (d)
the reopening of the Company’s gaming properties are subject to
various conditions, including numerous regulatory approvals and
potential delays and operational restrictions; (e) our ability to
access additional capital on favorable terms or at all; (f) our
ability to remain in compliance with the financial covenants of our
debt obligations; (g) the consummation of the proposed Morgantown
and Perryville transactions with GLPI are subject to various
conditions, including third-party agreements and approvals, and
accordingly may be delayed or may not occur at all; (h) actions to
reduce costs and improve efficiencies to mitigate losses as a
result of the COVID-19 pandemic could negatively impact guest
loyalty and our ability to attract and retain employees; (i) the
outcome of any legal proceedings that may be instituted against the
Company or its directors, officers or employees; (j) the impact of
new or changes in current laws, regulations, rules or other
industry standards; (k) the ability of our operating teams to drive
revenue and margins; (l) the impact of significant competition from
other gaming and entertainment operations; (m) our ability to
obtain timely regulatory approvals required to own, develop and/or
operate our properties, or other delays, approvals or impediments
to completing our planned acquisitions or projects, construction
factors, including delays, and increased costs; (n) the passage of
state, federal or local legislation (including referenda) that
would expand, restrict, further tax, prevent or negatively impact
operations in or adjacent to the jurisdictions in which we do or
seek to do business (such as a smoking ban at any of our properties
or the award of additional gaming licenses proximate to our
properties, as recently occurred with Illinois and Pennsylvania
legislation); (o) the effects of local and national economic,
credit, capital market, housing, and energy conditions on the
economy in general and on the gaming and lodging industries in
particular; (p) the activities of our competitors (commercial and
tribal) and the rapid emergence of new competitors (traditional,
internet, social, sweepstakes based and VGTs in bars and truck
stops); (q) increases in the effective rate of taxation for any of
our operations or at the corporate level; (r) our ability to
identify attractive acquisition and development opportunities
(especially in new business lines) and to agree to terms with, and
maintain good relationships with partners/municipalities for such
transactions; (s) the costs and risks involved in the pursuit of
such opportunities and our ability to complete the acquisition or
development of, and achieve the expected returns from, such
opportunities; (t) our expectations for the continued availability
and cost of capital; (u) the impact of weather, including flooding,
hurricanes and tornadoes; (v) changes in accounting standards; (w)
the risk of failing to maintain the integrity of our information
technology infrastructure and safeguard our business, employee and
customer data (particularly as our iGaming division grows); (x)
with respect to our iGaming and sports betting endeavors, the
impact of significant competition from other companies for online
sports betting, iGaming and sportsbooks, our ability to achieve the
expected financial returns related to our investment in Barstool
Sports, our ability to obtain timely regulatory approvals required
to own, develop and/or operate sportsbooks may be delayed and there
may be impediments and increased costs to launching the online
betting, iGaming and sportsbooks, including delays, and increased
costs, intellectual property and legal and regulatory challenges,
as well as our ability to successfully develop innovative products
that attract and retain a significant number of players in order to
grow our revenues and earnings, our ability to establish key
partnerships, our ability to generate meaningful returns and the
risks inherent in any new business; (y) with respect to our
proposed Pennsylvania Category 4 casinos in York and Berks
counties, risks relating to construction, and our ability to
achieve our expected budgets, timelines and investment returns,
including the ultimate location of other gaming properties in the
Commonwealth of Pennsylvania; and (z) other factors as discussed in
the Company’s Annual Report on Form 10-K for the year ended
December 31, 2019, subsequent Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K, each as filed with the U.S. Securities
and Exchange Commission. The Company does not intend to update
publicly any forward-looking statements except as required by law.
In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this press release may not
occur.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200507005133/en/
David Williams Chief Financial Officer 610-373-2400
Joseph N. Jaffoni, Richard Land JCIR 212-835-8500 or
penn@jcir.com
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