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.

 

Penn National Gaming Still Looking to Sell LV Tropicana

Penn National Gaming is one of the country’s biggest and most successful casino operators. The company has made headlines recently for some of its major deals and acquisitions. This week, officials within Penn Gaming announced they’re still looking to sell LV Tropicana.Tropicana Las Vegas Casino Logo

The sale of this casino-resort has been discussed for years. It’s a popular venue off the Strip and is likely to fetch a high price. Today, we’re going to look at some of the Tropicana’s recent deals and talk about when the company is looking to sell this property in Las Vegas.

Penn Gaming Purchases 36% Stake in Barstool Sports

There’s a good chance you’ve seen Penn National Gaming’s name in the headlines recently. Recently, this company paid $136 million for a 36% stake in sports blog Barstool Sports. With this investment, Barstool is now valued at an incredible $450 million.

The decision to work with this company makes sense for Penn National Gaming. Barstool Sports has one of the largest social media followings in the country. Most feel that the deal will help to bring significantly more people to Penn Gaming’s casinos.

Ron Baron, a billionaire investor in New York, believes this deal will prove extremely valuable for the casino company.

“Not only are they going to make a lot of money on this investment for this $150 million and buy the rest of it out from the founder, but also it’s going to increase the traffic in their casinos,” Baron said. “It’s going to be worth a ton.”

It’s clear that Penn National Gaming is looking to expand. Interestingly, the company wants to start generating more revenue from property sales. As a result, officials are now looking to sell the LV Tropicana. Based on several reports, this sale will take place sometime in 2020.

The Push to Sell the LV Tropicana Continues

The Tropicana Hotel-Casino in Las Vegas is one of the city’s most popular venues not located off the Strip. It opened to the public all the way back in 1962. Since that time, it’s changed ownership hands several times.

Several major renovations have also been made to this property. In 1986, the owners built a new 21-story Island Tower here. In 2007, a massive $2 billion expansion project was planned. Due to the financial crisis, these plans were eventually scrapped.

In 2015, Penn National Gaming purchased this property for $360 million. The company has worked hard to make this a more popular with locals and tourists. Unfortunately, it appears the revenue generated from this hotel-casino is not as high as initially projected.

As a result, Penn National Gaming is looking to sell LV Tropicana. Jay Snowden, CEO of Penn Gaming, told the media that several offers for this venue have already been presented.

“On the Tropicana side, there’s been so much unsolicited interest that it’s just very active,” he said. “We got another call two days ago with interest in potentially acquiring some or all of the land holdings there. It’s very active.”

Snowden claims this sale is a real priority for the company. Competition in the US casino industry continues to grow. Let’s take a look at how Penn Gaming performed last year.

Penn National Gaming’s 2019 Revenue Figures Are Released

The US casino industry is in an interesting place. More states have recently begun to expand their laws to allow more casino gambling options. As a result, many companies are beginning to earn significantly more revenue.

On the other hand, competition is growing in this industry, too. Some of the biggest companies are controlling much of the market. Penn Gaming’s investment into Barstool Sports was expected to help with this issue.

Unfortunately, the company recently reported revenue losses in 2019’s fourth quarter. The company posted revenue of $1.34 billion last quarter. This is significantly less than analysts initially projected.

This isn’t something to be concerned about, though. Most feel that this company’s share prices will continue to rise throughout 2020. Once the company is able to sell LV Tropicana, these shares will increase significantly.

It’s an exciting time for Penn Gaming and the US casino industry as a whole. Stay tuned for more casino news over the next few months!