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Penn National cuts slot machines to be installed at Austintown racino
austintown
Penn National Gaming Inc., which planned to open its racino in Austintown next year with 1,500 video lottery terminals or slot machines, said this week it will scale back and instead open with 1,000.
The news came during a conference call to discuss a dismal second-quarter earnings report with investors, analysts and reporters. Though revenue went up 6.8 percent in the second quarter of this year to reach $761.4 million for the quarter, the company reported a loss of $12.2 million — a big difference from last year at the same time, when Penn National reported a $66.7 million profit.
The company has struggled since 2011 to report better-than-expected earnings as profits have fallen since then. The company attributed much of the blame in the second quarter to a competitive market in Ohio, where its two casinos struggled against competitors nearby.
“In Ohio, while first-year gaming revenues for the Columbus market are in line with other similarly sized markets, our facility has not yet achieved the market share or margins we expected,” said Peter Carlino, chairman and chief executive officer, in a statement.
Tim Wilmott, president and chief operating officer, said during the Tuesday conference call that the company will scale back the number of machines it installs at Austintown’s racino by 500 in an effort to open conservatively and allow market demand here to determine how many more, if any, machines the company should add at the location.
Company officials were encouraged by the performance of their own racinos and those of competitors in the Toledo and Columbus markets — a sign they said signals consumers want additional gaming options. Penn National operates two of the state’s four casinos in Toledo and Columbus. It also has racinos in Toledo and a suburb of Columbus, which will be moved to Dayton and Austintown to reduce “cannibalizing” its own business, as the company explains it.
Hollywood Slots at Mahoning Valley Race Course is being built on 194 acres between state Routes 46 and 11, near the Interstate 80 interchange. The 100,000-square-foot facility will include a food court, sports bar, hundreds of indoor and outdoor seats and video lottery terminals.
In June, gamblers wagered $978 million at the state’s casinos and racinos, according to the Ohio Casino Control Commission.
However, revenue at all four casinos dropped as the state’s market grows crowded and competes with other venues in places such as Pennsylvania and West Virginia.
Penn National operates 28 gaming facilities in 17 states and Ontario, Canada.
The company’s stock closed at $53.50 on the NASDAQ on Monday, but after Tuesday’s news it had tumbled to about $49 in afternoon trading Thursday.