Penn National Enters Its 19th Jurisdiction Via Acquisition of Greektown Casino in Detroit, Michigan

Penn National Gaming has weathered the storm of this year’s first quarter and has entered Q2 with a big announcement of another purchase with Vici Properties. This time, the two companies have invested a remarkable $1 billion into the acquisition of Greektown Casino Hotel in Detroit.

Michigan has, thus, become the 19th US jurisdiction in which this casino and racetrack operator will be offering their gambling services.

Good Figures Overall

Regarding their Q1 performance…

…Penn has revealed that the revenue increased 57.1% overall to $1.28 billion (in 2018 it was $816.1 million), while operating income reached $182.4 million – that’s a 5.9% leap from last year’s corresponding period’s $172.1 million.

Net income, however, took a 9.6% nosedive and ended up at $41 million (from last year’s $45.4m).

The period’s adjusted EBITDAR rose 61.3% to $391.4 million, which tumbles down to $183.5 million after lease payments are ed for. This is still a 4.48% boost over 2018′ $126.7 million.

Two Major Acquisitions

Penn and Vici were behind January’s purchase of Margaritaville in Louisiana’s Bossier City…

…which is among the things commented on by Penn National’s CEO, Timothy Wilmott, who said:

“Despite weather-related impacts to several properties during the first quarter, we’re pleased to have met our adjusted EBITDAR guidance after a one-time adjustment of $3.1m for expenses related to a customer loyalty point liability true-up related to prior periods. This accomplishment highlights our property-level management team’s consistent ability to maintain or increase margins, even in a challenging revenue environment.

“In addition, we closed our accretive acquisition of Margaritaville in Bossier City, Louisiana in early January, and we now expect to close our accretive acquisition of Greektown Casino-Hotel in Detroit, Michigan, by the end of May.”

He also went on to remark that Penn invested $300 million in assuming control of Greektown Casino and that this provides them the entry into the “industry-leading” 19th jurisdiction, while adding a stable regional gaming market to their diverse portfolio of properties.

Numerous Perks Coming Along With New Property

Greektown Casino will, according to Wilmott, have the biggest single property database in the operator’s loyalty program.

In his press release published on behalf of the entire company, it was confirmed that the development of Hollywood Casino York and Hollywood Casino Morgantown was going as planned and that “construction timetable for both facilities is anticipated to be 12-18 months after all requisite approvals, such as licensing by PGCB.”

Wilmott concluded by making a few remarks on the purchase of Pinnacle Entertainment, which is said to be in the $3 billion region:

“In addition, we remain highly focused on driving revenue synergies, which will start with our combined player loyalty program, mychoice. We expect to have all of our properties on the single platform by the end of July, and are well-positioned to achieve incremental adjusted EBITDAR associated with revenue synergies related to Pinnacle in the range of $15-$20m. The majority of these revenue synergies should be realised in 2020 and 2021.”

Source:

“Penn National prepped for entry into 19th US region”, casinobeats.com, May 2, 2019.