43
Penn National already seeing return on investment of Austintown racino
By ROBERT CONNELLY
WYOMISSING, Pa.
Penn National Gaming Inc. already has received a 20 percent return on its investment in Hollywood Gaming at Mahoning Valley Race Course in Austintown.
That number “is a very strong return,” said Saul Reibstein, chief financial officer of Penn National. “It might be in the middle to high-end range of what we hoped for. ... We do a lot of homework to make certain that that investment will make a very high return on that investment.”
Hollywood Gaming at Dayton Raceway and the first full quarter of operations at Plainridge Park Casino, the first casino to open in Massachusetts, were two other properties that had similar returns on investment for the company.
That was one highlight of the company’s third-quarter earnings report released Thursday that encompassed July, August and September. Net revenue for those three months that ended Sept. 30 was $739.3 million, higher than the $728.2 million projected by the company during its second-quarter results this year.
This third quarter also was higher than last year’s third quarter of $645.9 million.
The gaming company brought in $210.1 million in EBITDA (earnings before interest, taxes, depreciation and amortization), which was higher than the $197.1 million projected and higher than the results of the third quarter in 2014, $170.3 million.
The majority of an earnings conference call was spent on three aspects of Penn National: its recent $360 million acquisition of Tropicana Las Vegas, the gaming company’s first operation on the Las Vegas strip; its recent opening of Plainridge Park; and another recent acquisition of Prairie State Gaming, an Illinois video gaming terminal operator.
Those games that PSG offers are legal in seven states and are slot machines at 270 bar and retail gaming establishments in Illinois.
Timothy J. Wilmott, Penn National chief executive officer and president, said PSG’s games are “legal today in seven states and represents about $2 billion in revenue annually, and we believe more states down the road will view this” as a type of gaming.
“We see this as a platform of growth,” Wilmott said.