Penn National Gaming‘s much-discussed launch of a sportsbook app bridging off its investment in the Barstool Sports brand is delayed, the company said while answering questions during an earnings call Thursday morning.
But the company also said the app will launch first in Pennsylvania, where the regional gaming operator has its headquarters. The company has 41 casinos in 19 states.
Penn’s accompanying press release glossed over the delay, simply saying the app is “on track” for deployment in the third quarter — meaning September in this case. More states will follow in 2021, according to our sister site Legal Sports Report.
However, the company did deploy PlayBarstool, an app designed to allow free play, earlier this week.
Barstool app target, PA mini-casino openings delayed
However, Penn’s CEO Jay Snowden and Barstool CEO Erika Nardini had previously targeted a launch in August, which meant capturing the run-up games leading to the regular NFL season in the hot PA sports betting market.
Penn’s CEO also explained during questioning that the construction of two stalled mini-casino projects in Pennsylvania remains on hold, though that delay was not addressed in the earnings report.
Construction halted initially at a site in a York County mall space and another site in nearby Morgantown, Berks County, due to the virus pandemic. Penn has left the mini-casino sites idle while preserving cash and concentrating on the pivot to the online rollout of the Barstool sportsbook.
PA-based Penn National already has an iGaming product live in Pennsylvania with the Hollywood Casino app, which was one of the first to market in PA.
Penn beating expectations while losing revenue
While the company’s earnings beat Wall Street expectations, Penn lost $79.3 million in adjusted EBITDA during the second quarter. The virus pandemic hit hard, with the closing of Penn’s brick-and-mortar casinos. That came just after it bought a 36% share of Barstool.
Revenue was $305.5 million, down 76.9% from last year.
Still, the market liked what it heard, with Penn stock now trading at more than $43 a share on NASDAQ.
Stock has recovered since the pandemic struck
The stock had taken a huge hit at the beginning of the pandemic, dropping below $4 a share, but has since recovered — in large part due to Barstool.
Penn holds a 36% stake in Barstool and has agreements to purchase up to 50% of the company. Barstool should bring Penn a younger and higher-spending customer.
Snowden said Barstool has caused his company to “reimagine how to do business.”
Issues remain for Penn National
Penn National still has two shuttered casinos, most notably the Trop on the Las Vegas Strip. The company had said it planned to reopen it on Sept. 1, but that’s not firm now.
Nearly 2,000 of Penn’s 26,000 employees will never return to work as the company continues to invest in the shift to online gaming.
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