Penn National Touts Performance of Ohio Racinos

YOUNGSTOWN, Ohio – Officials with Penn National Gaming Inc. remain bullish on Hollywood Gaming at Mahoning Valley Race Course in Austintown, but were silent Thursday morning on the company’s recent withdrawal from a western Pennsylvania project that would have competed with the Austintown racino.

“Weather aside, we’re really continuing to see momentum in our four Ohio businesses,” said Jay Snowden, chief operating officer, during a conference call following the release of Penn National’s first quarter 2015 results.

“The two new tracks in Dayton and Mahoning Valley as well as our existing casinos in Columbus and Toledo – we continue to hit or exceed our internal projections for those four properties,” he said. Each of the four Ohio properties is averaging 5,000 new player card signups per month, “which I think demonstrates our ability to cultivate new business,” he added.

Unmentioned during the call was the Wyomissing, Pa. gaming company’s decision to withdraw from its joint venture with Endeka Entertainment LP to build Lawrence Downs Casino and Racing Resorts project in Mahoning Township, Pa. The racino would be within a 30-minute drive of Penn National’s Austintown racino.

In a civil fraud suit, Endeka claims Penn National, which joined the project as a minority financier in 2013, “derailed” and “ultimately destroyed” it to protect the Austintown racino, which opened last year

Questions from reporters were not taken during the conference call.

Penn National reported net revenues for the three months ended March 31 were $664.1 million, up from $641 million a year earlier but off from the $670.6 million projected. Net income was $11.0 million for the period, above the $9.4 million guidance and more than double the $5.4 million during the first quarter of 2014.

Net revenues for Penn National’s East/Midwest operations, which include Ohio, totaled $386.4 million for the first quarter, up from $349.5 million a year earlier.

The quarter benefitted from year-over-year improvements in regional gaming trends, particularly during the first half, said Timothy J. Wilmott, president and CEO. Earnings also reflected contributions from both the Austintown racino and Hollywood Gaming at Dayton Raceway, both of which opened during the third quarter of 2014. Those contributions “more than offset the mid-2014 closing of Argosy Casino Sioux City, he said.

“It was a tale of two halves in the quarter,” Snowden said. The first half of the quarter was driven by milder weather and lower gas prices, while the weather – with frigid temperatures across the Midwest and record snowfall in the East – made the second half “more difficult.”

Spend per visit “continues to be a good story for us,” Snowden continued. “Visitation improvements across all tiers and work segments — both of those factors are largely being driven by a firming labor market and consumer confidence continuing to move in the right direction. “

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