Penn Gaming to Furlough 26k Workers and Sell Tropicana Property

Tropicana Las Vegas Valet EntranceAs the coronavirus casino closures are still in full effect, it’s causing a lot of operators in the gaming industry to make difficult decisions to mitigate for revenue losses, the latest being Penn Gaming,

Penn Nation Gaming, the company who owns and operates the Tropical Hotel and Casino and M Resort in Las Vegas, announced on Friday that they will be selling Tropicana’s real estate assets to receive rent credits in an effort to offset losses from coronavirus closures.

Penn announced that in addition to selling Tropicana’s property, it will also be selling of a new ground lease for a casino planned to be built in Morgantown, Pennsylvania.

According to Penn National President and CEO Jay Snowden. the gaming group reached a lease-back deal with their landlord, real estate spinoff, Gaming & Leisure Properties (GLPI). In the lease-back deal, Penn National Gaming will receive $337.5 million in rent credits.

The company also announced that they will furlough 26,000 of their employees nationwide this Wednesday.

“As the global COVID-19 health crisis continues to evolve, we are navigating through this unprecedented time for our Company, our industry and our nation,” Snowden said.

“With all of our 41 properties in 19 states temporarily shuttered, like many others in the gaming and hospitality sector, we are making difficult decisions to help preserve our liquidity and ensure a brighter future for our company’s team members, customers, shareholders and other key stakeholders,” he said.

Furlough Plan

Penn National is planning to have unpaid furloughs for nearly 26,000 of their employees beginning April 1. However, their full wages and medical benefits will carry on through June 30.

“This decision was extremely difficult to make for all of us at Penn,” Snowden wrote in a letter addressed to Company team members. “Penn National is a family, and we deeply regret the hardship this will place on you and your loved ones.”

Snowden himself received a pay cut along with other corporate leaders on top of the many company employees.

The company’s Board of Directors decided to postpone their cash compensation until April 1, when the furloughs begin and until Penn National decides that business is back to usual operations.

Penn National plans to utilize their COVID-19 Emergency Fund to offer financial support to its furloughed workers. Currently, they’ve raised $1.2 million in relief funds.

Snowden, his senior management team, the company’s board of directors and property general managers have contributed $425,000 in personal contributions to the fund.

“While the steps we’ve taken are deeply painful on a personal and professional level, I am confident these moves will help to preserve our Company’s and our team members’ long-term future,” Snowden assured.

Company Coverage During Closures

During the coronavirus closures, Penn National advised in a release that it will have less than 850 team members working companywide.

About Penn National Gaming

Penn National Gaming owns, operates or has ownership interests in gaming and racing facilities and video gaming terminal operations with a focus on slot machine entertainment. The Company operates 41 facilities in 19 jurisdictions. In total, Penn National Gaming’s facilities feature approximately 50,500 gaming machines, 1,300 table games and 8,800 hotel rooms. The Company also offers social online gaming through its Penn Interactive Ventures division and has leading customer loyalty programs with over five million active customers.

From their official website.