Penn Entertainment Explained

Penn Entertainment, Inc.
Former Name:PNRC Corp. (1982–1994)
Penn National Gaming, Inc. (1994–2022)
Type:Public
Revenue Year:2022
Net Income:US$222 million
Net Income Year:2022
Assets:US$17.5 billion
Assets Year:2022
Equity:US$3.5 billion
Equity Year:2022
Num Employees:21,875 (2022)
Footnotes:[1]

Penn Entertainment, Inc., formerly Penn National Gaming, is an American entertainment company and operator of integrated entertainment, sports content, and casino gambling. It operates 43 properties in 20 states, under brands including Hollywood Casino, Ameristar, and Boomtown. It also owns the Canadian digital media company Score Media and Gaming, and operates sports betting in

It also offers sports betting in 17 U.S. jurisdictions and online casino gaming in five, under brands such as ESPN Bet and theScore Bet.

History

Background and early history (1968–1994)

Beginning: Pitt Park Raceway, Inc. and the Pennsylvania National Turf Club

In 1967, Pennsylvania enacted a law allowing thoroughbred horse racing with parimutuel wagering.[2] Two companies that later formed part of Penn National Gaming were founded in 1968 by groups seeking one of the four available racing licenses: Pitt Park Raceway, Inc., formed by several Erie area businessmen,[3] [4] and the Pennsylvania National Turf Club, established by a group of Central Pennsylvania investors.[5] [6] The Turf Club was awarded one of the licenses, and soon began construction on Penn National Race Course.[7] The complex included a motor speedway, which held its first races in 1971,[8] [9] and the horse track, which opened in 1972.[10] [11]

Pitt Park Raceway, meanwhile, was denied in its initial application, but received one of a second round of licenses issued in 1970.[12] The first Pitt Park racing meet opened in 1971 at The Meadows, an existing harness racing track.[13] Pitt Park lost half a million dollars in its first meet, leading its owners to sell the company to a group of investors, including Philadelphia insurance businessman Peter D. Carlino.[14] [15] After another unsuccessful season at The Meadows, Pitt Park changed its name to the Mountainview Thoroughbred Racing Association and moved to Penn National Race Course.[16] [17] Starting in 1973, as a tenant of the Turf Club, Mountainview held 100 nights of racing there each year.[18]

Reorganization and renaming to Penn National Gaming

In 1982, Carlino purchased Penn National Race Course from the financially struggling Turf Club.[19] [20] The Turf Club continued to operate its own racing meet each year, now as a tenant of Carlino.

The companies involved with Penn National Race Course were reorganized in 1994 in preparation for an initial public offering.[21] PNRC Corp., which had been incorporated in 1982, was renamed as Penn National Gaming, with Mountainview and the Turf Club as its subsidiaries. Carlino's son, Peter M. Carlino, who had earlier managed Mountainview, was Penn National's first CEO,[22] [23] a position he held until 2013.[24] In May 1994, Penn National Gaming became a public company via an initial public offering on the Nasdaq, raising $18 million to pay down debt and fund construction of off-track betting parlors.[25] [26]

Expansion (1996–2021)

Penn National expanded beyond its first racetrack with the acquisitions of Pocono Downs in 1996, Charles Town Races in 1997, and, in 1999, a half interest in Freehold Raceway and the operations of Garden State Park.[27] Penn National also won approval to begin offering slot machines at Charles Town in 1997.[28]

The company acquired its first standalone casino properties in 2000, buying Casino Magic Bay St. Louis and Boomtown Biloxi from Pinnacle Entertainment for $201 million.[29] This was followed in 2001 by the acquisition of Carnival Resorts & Casinos, including ownership of Casino Rouge in Baton Rouge, Louisiana and the management contract for Casino Rama in Ontario.[30] [31] Next, in 2002, it bought the Bullwhackers Casino in Black Hawk, Colorado from the Hilton Group for $6.5 million.[32]

In 2003, Penn National bought Hollywood Casino Corp. for $328 million plus $360 million in assumed debt, gaining three casinos in Aurora, Illinois; Tunica, Mississippi; and Shreveport, Louisiana.[33] The acquisition, which doubled Penn National's revenues, was part of a continuing strategy to shift away from the horse racing business and into the casino business.[34] The company planned to rebrand its other properties under the Hollywood Casino name.

In 2005, Penn National acquired Argosy Gaming Company for $1.4 billion plus $791 million in assumed debt, adding five casinos and one horse track to its portfolio (not including the Argosy Baton Rouge, which was quickly sold to satisfy antitrust concerns).[35] [36] The purchase again doubled Penn National's size, making it, at the time, the third largest publicly held gaming company in the country (behind MGM Mirage and Harrah's Entertainment).[37]

In November 2006, a deal for Penn National Gaming to acquire Harrah's Entertainment fell through.[38]

In 2007, Penn National acquired the Zia Park racino in Hobbs, New Mexico for $200 million.[39]

An attempt in 2007 to take the company private with a $6.1 billion buyout fell through for prospective buyers Fortress Investment Group and Centerbridge Partners.[40]

In 2011, Penn National acquires the M Resort, its first property in Nevada.

In November 2012, the company announced a plan to spin off a new real estate investment trust (REIT) with ownership of most of its properties, in an effort to reduce taxes and cost of capital, and overcome license ownership restrictions.[41] [42] The REIT owned the land and buildings for 21 of Penn National's 29 casinos and racetracks; Penn National continued to operate all but two of the properties under a lease agreement.[43] The spin-off was completed on November 1, 2013, creating Gaming and Leisure Properties, Inc. (GLPI).[44] As of June 2022, the GLPI trust owned over 50 casino properties, which it leased to companies including Caesars Entertainment, Boyd Gaming Corp., Casino Queen, and Cordish Cos.

In July 2013, Penn National sold the Bullwhackers Casino to a local investor group.[45] [46]

In April 2015, the company agreed to purchase the Tropicana Las Vegas for $360 million.[47]

In August 2016, the company agreed to purchase Rocket Games for $60 million.[48]

In May 2017, Penn National acquired the operating assets of Bally's Casino Tunica and Resorts Casino Tunica for a total of $44 million, and leased the two casinos from GLPI, which had simultaneously purchased the real estate assets.[49] [50] [51]

In October 2018, the company acquired Pinnacle Entertainment for $2.8 billion in cash and stock.[52] [53] To ensure regulatory approval for the deal, Pinnacle sold four of its properties to Boyd Gaming prior to the merger.[54] The result was the addition of twelve new properties to Penn National's holdings, all of them leased from GLPI. In connection with the sale, Penn National sold the real estate of Plainridge Park Casino to GLPI for $250 million.[55]

In 2019, Penn National made two purchases in conjunction with Vici Properties. Penn National bought the operating businesses of the Margaritaville Resort Casino in Louisiana and Greektown Casino–Hotel in Detroit for $115 million and $300 million, respectively, while Vici bought both properties' real estate assets and leased them to Penn.[56] [57] In July 2019, Penn reached market access agreements with multiple gaming companies, including DraftKings, PointsBet, theScore, and The Stars Group, which would allow the companies to sub-license "skins" allotted to land-based casinos owned by Penn for offering iGaming and sports betting in their respective states.[58]

On January 29, 2020, Penn purchased a 36% stake in Barstool Sports for $163 million.[59]

During the COVID-19 pandemic, Penn faced the prospect of financial issues brought on by resort closures. As a result, Penn sold the land occupied by the Tropicana Las Vegas to GLPI.[60] Penn sold the land for $337.5 million in rent credits, and the sale was finalized in April 2020. Penn continued to operate the Tropicana until 2022, when it was sold to Bally's Corporation.[61] [62] In September 2020, Penn and Barstool launched a branded mobile betting service known as Barstool Sportsbook. It was initially launched in New Jersey, and expanded to twelve states by 2021.[63] [64]

In August 2021, Penn National agreed to acquire Canadian digital media company Score Media and Gaming for $2 billion.[65] [66] The companies have had a strategic partnership since 2019.[67] In September 2021, the company opened a career center at Hollywood Casino Morgantown.[68]

In February 2022, Penn National announced a strategic partnership with Sports Betting Exchange in Louisiana.[69] In April 2022, Penn launched sports betting in Ontario, Canada via theScore Bet.[70] The company subsequently announced a sponsorship agreement between theScore and the Toronto Blue Jays as its "official gaming partner".[71]

Penn Entertainment (2022–present)

In August 2022, the company changed its name to Penn Entertainment to reflect its diversification into sports content and other entertainment.[72] In February 2023, Penn acquired the remainder of Barstool Sports for $388 million.[73]

In August 2023, Penn reached a ten-year, $2 billion licensing agreement with ESPN Inc., under which Penn would rebrand Barstool Sportsbook as ESPN Bet later in the year To license the branding, Penn would pay $1.5 billion in cash, and give ESPN options for $500,000 of its stock. ESPN would provide promotion for the service.[74] [75] Concurrently, Penn announced that it would sell Barstool back to its founder David Portnoy for $1 and 50% of gross revenue from any future sale of the site; Portnoy stated that he planned to continue owning Barstool Sports "till I die".[76] [77]

Properties

Owned and operated

Leased or managed

Former

Notes and References

  1. Web site: Penn Entertainment, Inc. 2022 Form 10-K Annual Report . Penn Entertainment.
  2. News: Flat races come to Pa.. Philadelphia Daily News. December 12, 1967 . Newspapers.com.
  3. News: Pitt Park Raceway legal notice . . October 8, 1968 . Newspapers.com.
  4. News: East gets 4 tracks, District falls flat. . November 20, 1968 . Newspapers.com.
  5. News: Horse track group formed. The Express. Lock Haven, PA . AP . March 26, 1968 . Newspapers.com.
  6. News: Central Pa.'s first horse track may open in August. Lebanon Daily News. March 28, 1970. UPI. Newspapers.com.
  7. News: Racing board awards four tracks today . Lebanon Daily News . AP . November 20, 1968 . Newspapers.com.
  8. News: Penn National auto race track opening July 17. Lebanon Daily News. June 23, 1971 . Tiny Parry . Newspapers.com.
  9. News: Overflow crowd attends opening of Penn National. Lebanon Daily News . July 19, 1971 . Tiny Parry . Newspapers.com.
  10. News: PN track has necessary ingredients . Lebanon Daily News. August 30, 1972. UPI . Newspapers.com.
  11. News: Asphalt Road wins feature at PN track . Lebanon Daily News . September 9, 1972 . Newspapers.com.
  12. News: Fort Pitt gets W. Pa. flat racing OK . Pittsburgh Post-Gazette. January 1, 1971. William Deibler . Newspapers.com.
  13. News: 'Plow' gets big share of 'Park' feature. Pittsburgh Post-Gazette. October 12, 1971. Jimmy Jordan. Newspapers.com.
  14. News: The Pitt Park story . . February 23, 1972. Al Abrams. Newspapers.com.
  15. News: Pitt Park sale confirmed . Pittsburgh Post-Gazette. April 13, 1972 . Newspapers.com.
  16. News: Pitt Park seeks move . . November 23, 1972 . Newspapers.com.
  17. News: Mountainview opens at PN Friday night. Lebanon Daily News . March 28, 1973 . Newspapers.com.
  18. News: Financially-hit Penn National track to be sold . The Sentinel. Carlisle, PA. September 2, 1982 . UPI . Newspapers.com.
  19. News: Revised bill submitted to spur sale of Garden State. . October 26, 1982. Ernest Tollerson . Newspapers.com.
  20. News: Horse racing panel back in action. The Philadelphia Inquirer. November 24, 1982. Don Clippinger . NewsBank.
  21. Form 10-K: Annual Report. Penn National Gaming. March 28, 1997. 39. EDGAR.
  22. Form 10-K: Annual Report . Penn National Gaming. March 28, 2001 . EDGAR.
  23. News: Penn National has its $15 million at the ready. The Commercial Appeal. Memphis, TN. April 2, 1998. Louis Graham. Newspapers.com.
  24. News: Execs depart posts at Penn National Gaming for spin-off company . Lehigh Valley Business. November 14, 2013. Brent Burkey . 2018-03-26.
  25. News: Penn National aims to cash in on a gambling law. The Patriot-News . Harrisburg, PA. Nick Horvath, Jr.. Adam Bell . April 27, 1994 . NewsBank.
  26. News: Penn National shares at $10 . The Patriot-News. Harrisburg, PA. Tom Dochat. May 28, 1994 . NewsBank.
  27. Form 10-K: Annual Report. Penn National Gaming. March 20, 2000. 10 & 46–47. EDGAR.
  28. News: October 18, 1997 . W.Va. slots venture is no gamble at all Charles Town track sees revenue soar . .
  29. Form 10-K: Annual Report . Penn National Gaming . March 28, 2001 . 2 . EDGAR.
  30. News: Penn National buys riverboat casino in Louisiana. Las Vegas Sun. Timothy D. May. July 31, 2000. 2018-03-16.
  31. Form 8-K: Current Report. Penn National Gaming . May 7, 2001. EDGAR.
  32. News: Bullwhackers sale completed. The Denver Post. April 26, 2002. NewsBank.
  33. News: Penn completes Hollywood Casino buy. Dallas Business Journal . March 4, 2003. 2012-07-19.
  34. News: Penn going Hollywood, expanding dramatically. Las Vegas Sun. August 30, 2002. Bill Bergstrom. 2018-03-26.
  35. News: Penn National nets 3 casinos in Argosy Gaming deal. The Patriot-News. Harrisburg, PA. Tom Dochat. October 4, 2005. NewsBank.
  36. Form 10-K: Annual Report. Penn National Gaming. February 29, 2008. 77–78. EDGAR.
  37. News: Penn National gets OK for deal. The Philadelphia Inquirer. Suzette Parmley. September 30, 2005. NewsBank.
  38. News: Penn National mulls Harrah's takeover bid . dead . https://web.archive.org/web/20061201225436/http://money.cnn.com/2006/11/29/news/companies/penn_harrahs.reut/index.htm?postversion=2006112907 . December 1, 2006 .
  39. Web site: Penn National Gaming Completes Zia Park Racetrack/Black Gold Casino Acquisition . businesswire.com . April 17, 2007.
  40. https://www.usatoday.com/money/industries/2007-06-15-penn-private_N.htm?csp=34 USA Today: Penn National Gaming agrees to $6.1B deal. Retrieved June 15, 2007
  41. News: Penn planning to split in two. Las Vegas Review-Journal. Howard Stutz. November 17, 2012. NewsBank.
  42. News: Penn National Gaming hits jackpot. Barron's. November 16, 2012. 2012-11-16. Dimitra Defotis.
  43. News: Penn National to begin spinoff of real estate holdings. Las Vegas Review-Journal . Howard Stutz . October 8, 2013. NewsBank.
  44. Web site: Yogonet . Penn National spinoff GLPI to acquire real property assets of Bally's two Rhode Island casinos for $1B Yogonet International . 2022-09-29 . www.yogonet.com . en-US.
  45. News: Johnny Z's developer to acquire Bullwhackers casino in Black Hawk. The Denver Post. Andy Vuong. February 14, 2013. 2013-04-27.
  46. Form 10-K: Annual Report. Penn National Gaming. February 27, 2014. 3. EDGAR.
  47. News: Penn National to buy Tropicana for $360 million. Las Vegas Review-Journal. Kimberly De La Cruz. April 29, 2015. 2015-04-29.
  48. Web site: Penn National Gaming Acquires Leading Social Casino Game Developer, Rocket Games, for $60 Million in Accretive Transaction Business Wire. www.businesswire.com. 2016-12-16.
  49. Penn National Gaming enters into definitive agreement to acquire operations of Bally's Casino Tunica and Resorts Casino Tunica for pre-synergy purchase multiple of 3.7x . Penn National Gaming. BusinessWire. March 28, 2017. 2021-09-13.
  50. Form 10-Q: Quarterly Report. Gaming & Leisure Properties. May 3, 2017. 8. EDGAR.
  51. Form 10-Q: Quarterly Report. Penn National Gaming. May 3, 2017. 23. EDGAR.
  52. News: Penn National Gaming completes $2.8B acquisition of Pinnacle. Las Vegas Review-Journal. Todd Prince. October 15, 2018. 2018-10-16.
  53. Penn National Gaming completes acquisition of Pinnacle Entertainment. Penn National Gaming. October 15, 2018. 2018-10-16.
  54. FTC requires casino operators Penn National Gaming, Inc. and Pinnacle Entertainment, Inc. to divest assets in three Midwestern cities as a condition of merger. Federal Trade Commission. October 1, 2018. 2018-10-16.
  55. Gaming and Leisure Properties, Inc. announces completion of acquisitions and lease modifications to accommodate the acquisition of Pinnacle Entertainment, Inc. by Penn National Gaming, Inc.. Gaming and Leisure Properties. October 15, 2018. 2018-10-16.
  56. News: Penn National acquires Louisiana casino operations. Lehigh Valley Business. Stacy Wescoe. January 3, 2019. 2019-01-13.
  57. Vici Properties Inc. completes acquisition of Greektown Casino-Hotel and lease to Penn National Gaming. Vici Properties. May 23, 2019. BusinessWire. 2019-05-26.
  58. Web site: Rybaltowski . Matt . 2019-08-01 . Penn National Lands Market Access Agreements With Major Sportsbooks . 2024-08-13 . SportsHandle . en-US.
  59. News: Penn National Gaming to Buy Minority Stake in Barstool Sports . Mullin. Katherine Sayre and Benjamin . . January 29, 2020 . subscription . 0099-9660.
  60. News: Velotta . Richard N. . Penn Gaming to furlough 26K workers, selling Tropicana real estate . April 22, 2020 . Las Vegas Review-Journal . March 27, 2020.
  61. Bally's completes previously announced acquisition of Tropicana Las Vegas. Bally's Corporation. September 27, 2022. September 27, 2022.
  62. Gaming and Leisure Properties completes previously announced sale of Tropicana Las Vegas and simultaneously enters into ground lease with Bally's Corporation. Gaming and Leisure Properties. September 27, 2022. September 27, 2022.
  63. Web site: Evans . Pat . 2020-09-18 . Barstool Launches Sportsbook, Confident Fans Will Follow . 2024-08-08 . Front Office Sports . en.
  64. Web site: Roberts . Mary . Writer/Reporter . Barstool Sportsbook Mobile App to Launch in Indiana . 2022-10-19 . Inside INdiana Business . en-US.
  65. Web site: 5 August 2021. Penn National Agrees to Buy TheScore App in $2 Billion Deal. 20 August 2021. The Wall Street Journal.
  66. Web site: 2022-08-19 . Barstool Sports to be fully acquired by Penn Entertainment in $387 million deal . 2022-10-19 . PhillyVoice . english.
  67. Web site: 5 August 2021. Penn National to Buy Score for $1.74 Billion in Betting Push. 20 August 2021. Bloomberg.
  68. Web site: 7 September 2021. Penn National looks to fill 375 jobs at Hollywood Casino Morgantown. 10 September 2021. Reading Eagle.
  69. 24 February 2022 . Sports Betting Exchange Partners with Penn National Gaming Inc. in Louisiana . Biz New Orleans . 5 April 2022.
  70. Web site: Nightingale . Tom . 2022-04-04 . Ontario online gaming market launches amid celebration . 2024-08-13 . canadiangamingbusiness . en-US.
  71. Web site: Nightingale . Tom . 2022-04-07 . theScore Bet becomes exclusive gaming partner of the Toronto Blue Jays . 2022-10-13 . canadiangamingbusiness . en-US.
  72. News: Penn National Gaming becomes PENN Entertainment . WFMZ-TV . Gregory Purcell. August 4, 2022. 2022-08-05.
  73. News: Remainder of Barstool Sports bought for $388 million . . February 18, 2023.
  74. Web site: Bucholtz . Andrew . 2023-08-08 . Dave Portnoy buys back 100 percent of Barstool Sports from Penn . 2023-08-09 . Awful Announcing . en-US.
  75. Web site: Maruf . Ramishah . 2023-08-08 . ESPN is jumping into sports gambling in a $2 billion deal . 2023-08-09 . CNN . en.
  76. Web site: Maruf . Ramishah . 2023-08-08 . ESPN is jumping into sports gambling in a $2 billion deal . 2023-08-09 . CNN . en.
  77. News: 2023-08-08 . ESPN Is Getting Into Sports Betting With Penn Entertainment . en . Bloomberg.com . 2023-08-09.
  78. News: Penn National Gaming starts work on $360 million California project. Las Vegas Review-Journal. Howard Stutz. January 13, 2014. 2018-10-17.
  79. News: New Meadows owner has short history, familiar name, big growth plans. Pittsburgh Business Times. Paul J. Gough. May 14, 2014. 2018-10-17.
  80. News: Hollywood rebrands as Jamul Casino. The San Diego Union-Tribune. Michele Parente. May 29, 2018. 2018-10-16.
  81. Form 10-K: Annual Report. Penn National Gaming. March 15, 2006. 54–55. EDGAR.

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