Penn National Gaming

Penn National Gaming
Public
Traded as
Industry
Headquarters Wyomissing, Pennsylvania, U.S.
Key people
  • Peter M. Carlino (Chairman)
  • Timothy J. Wilmot (CEO)
  • Jay Snowden (President & COO)
Revenue $3.1 billion (2017)[1]
$445 million (2017)[1]
$473 million (2017)[1]
Total assets $5.2 billion (2017)[1]
Total equity ($73 million) (2017)[1]
Number of employees
 18,754 (2017)[2]
Website www.pngaming.com

Penn National Gaming, Inc. is an operator of casinos and racetracks based in Wyomissing, Pennsylvania. It operates 29 facilities in the United States and Canada, many of them under the Hollywood Casino brand.

History

Background and early history (1968-1994)

In 1967, Pennsylvania enacted a law allowing thoroughbred horse racing with parimutuel wagering.[3] Two companies that would later form part of Penn National Gaming were founded in 1968 by groups seeking one of the four available racing licenses: Pitt Park Raceway, Inc., formed by several Erie area businessmen,[4][5] and the Pennsylvania National Turf Club, established by a group of Central Pennsylvania investors.[6][7] The Turf Club was awarded one of the licenses, and soon began construction on Penn National Race Course.[8][7] The complex included a motor speedway, which held its first races in 1971,[9][10] and the horse track, which opened in 1972.[11][12]

Pitt Park Raceway, meanwhile, was denied in its initial application, but received one of a second round of licenses issued in 1970.[5][13] The first Pitt Park racing meet opened in 1971 at The Meadows, an existing harness racing track.[14] Pitt Park lost half a million dollars in its first meet, leading its owners to sell the company to a group of investors, including Philadelphia insurance businessman Peter D. Carlino.[15][16] After another unsuccessful season at The Meadows, Pitt Park changed its name to the Mountainview Thoroughbred Racing Association and moved to Penn National Race Course. [17][18] Starting in 1973, as a tenant of the Turf Club, Mountainview held 100 nights of racing there each year.[18][19]

In 1982, Carlino purchased Penn National Race Course from the financially struggling Turf Club.[20][21] The Turf Club would continue to operate its own racing meet each year, now as a tenant of Carlino.[21]

The companies involved with Penn National Race Course were reorganized in 1994 in preparation for an initial public offering.[22] PNRC Corp., which had been incorporated in 1982, was renamed as Penn National Gaming, with Mountainview and the Turf Club as its subsidiaries.[22] Carlino's son, Peter M. Carlino, who had earlier managed Mountainview, was Penn National's first CEO,[23][24] a position he would hold until 2013.[25] Penn National Gaming went public on the NASDAQ exchange; $18 million was raised to pay down company debts and fund construction of off-track betting parlors.[26][27]

Expansion (1996-present)

Penn National expanded beyond its first racetrack with the acquisitions of Pocono Downs in 1996, Charles Town Races in 1997, and, in 1999, a half interest in Freehold Raceway and the operations of Garden State Park.[28]

The company acquired its first standalone casino properties in 2000, buying Casino Magic Bay St. Louis and Boomtown Biloxi from Pinnacle Entertainment for $201 million.[29] This was followed in 2001 by the acquisition of Carnival Resorts & Casinos, including ownership of Casino Rouge in Baton Rouge, Louisiana and the management contract for Casino Rama in Ontario.[30][31] Next, in 2002, it bought the Bullwhackers Casino in Black Hawk, Colorado from the Hilton Group for $6.5 million.[32]

In 2003, Penn National bought Hollywood Casino Corp. for $328 million plus $360 million in assumed debt, gaining three casinos in Aurora, Illinois; Tunica, Mississippi; and Shreveport, Louisiana.[33] The acquisition, which would double Penn National's revenues, was part of a continuing strategy to shift away from the horse racing business and into the casino business.[34] The company planned to rebrand its other properties under the Hollywood Casino name.[34]

In 2005, Penn National acquired Argosy Gaming Company for $1.4 billion plus $791 million in assumed debt, adding five casinos and one horse track to its portfolio (not including the Argosy Baton Rouge, which was quickly sold to satisfy antitrust concerns).[35][36] The purchase again doubled Penn National's size, making it, at the time, the third largest publicly held gaming company in the country (behind MGM Mirage and Harrah's Entertainment).[37]

In November 2006, a deal for Penn National Gaming to acquire Harrah's Entertainment fell through.[38]

In 2007, Penn National acquired the Zia Park racino in Hobbs, New Mexico for $200 million.

An attempt in 2007 to take company private with a $6.1 billion buyout fell through for prospective buyers Fortress Investment Group and Centerbridge Partners.[39]

In November 2012, Penn National announced a plan to spin off a new real estate investment trust (REIT) with ownership of most of its properties, in an effort to reduce taxes and cost of capital, and overcome license ownership restrictions.[40][41] The REIT would own the land and buildings for 21 of Penn National's 29 casinos and racetracks; Penn National would continue to operate all but two of the properties under a lease agreement.[42] The spin-off was completed on November 1, 2013, creating Gaming and Leisure Properties, Inc. (GLPI).[43]

In July 2013, Penn National sold the Bullwhackers Casino to a local investor group.[44][45]

In April 2015, the company agreed to purchase the Tropicana Las Vegas for $360 million.[46]

In August 2016, the company agreed to purchase Rocket Games for $60 million.[47]

In May 2017, Penn National acquired the operating assets of Bally's Casino Tunica and Resorts Casino Tunica for a total of $44 million, and leased the two casinos from GLPI, which had simultaneously purchased their real estate assets.[48][49]

In December 2017, the company agreed to acquire Pinnacle Entertainment for $2.8 billion in cash and stock.[50] To ensure regulatory approval for the deal, Pinnacle would sell four of its properties to Boyd Gaming prior to the merger.[51] The result would be the addition of twelve new properties to Penn National's holdings, all of them leased from GLPI. The agreement also calls for Penn National to sell the real estate of Plainridge Park Casino to GLPI.[52]

In June 2018, Penn National agreed to buy the operating assets of the Margaritaville Resort Casino in Bossier City, Louisiana for $115 million, while Vici Properties would purchase the associated real estate.[53]

Properties

Owned and operated

Leased or managed

Former

References

  1. 1 2 3 4 5 Form 10-K: Annual Report (Report). Penn National Gaming. March 1, 2018. p. 46 – via EDGAR.
  2. ↑ Form 10-K: Annual Report (Report). Penn National Gaming. March 1, 2018. p. 20 – via EDGAR.
  3. ↑ "Flat races come to Pa". Philadelphia Daily News. December 12, 1967 – via Newspapers.com.
  4. ↑ "Pitt Park Raceway legal notice". Pittsburgh Press. October 8, 1968 – via Newspapers.com.
  5. 1 2 "East gets 4 tracks, District falls flat". Pittsburgh Press. November 20, 1968 – via Newspapers.com.
  6. ↑ "Horse track group formed". The Express. Lock Haven, PA. AP. March 26, 1968 – via Newspapers.com.
  7. 1 2 "Central Pa.'s first horse track may open in August". Lebanon Daily News. UPI. March 28, 1970 – via Newspapers.com.
  8. ↑ "Racing board awards four tracks today". Lebanon Daily News. AP. November 20, 1968 – via Newspapers.com.
  9. ↑ Tiny Parry (June 23, 1971). "Penn National auto race track opening July 17". Lebanon Daily News – via Newspapers.com.
  10. ↑ Tiny Parry (July 19, 1971). "Overflow crowd attends opening of Penn National". Lebanon Daily News – via Newspapers.com.
  11. ↑ "PN track has necessary ingredients". Lebanon Daily News. UPI. August 30, 1972 – via Newspapers.com.
  12. ↑ "Asphalt Road wins feature at PN track". Lebanon Daily News. September 9, 1972 – via Newspapers.com.
  13. ↑ William Deibler (January 1, 1971). "Fort Pitt gets W. Pa. flat racing OK". Pittsburgh Post-Gazette – via Newspapers.com.
  14. ↑ Jimmy Jordan (October 12, 1971). "'Plow' gets big share of 'Park' feature". Pittsburgh Post-Gazette – via Newspapers.com.
  15. ↑ Al Abrams (February 23, 1972). "The Pitt Park story". Pittsburgh Post-Gazette – via Newspapers.com.
  16. ↑ "Pitt Park sale confirmed". Pittsburgh Post-Gazette. April 13, 1972 – via Newspapers.com.
  17. ↑ "Pitt Park seeks move". Pittsburgh Post-Gazette. November 23, 1972 – via Newspapers.com.
  18. 1 2 "Mountainview opens at PN Friday night". Lebanon Daily News. March 28, 1973 – via Newspapers.com.
  19. ↑ "Financially-hit Penn National track to be sold". The Sentinel. Carlisle, PA. UPI. September 2, 1982 – via Newspapers.com.
  20. ↑ Ernest Tollerson (October 26, 1982). "Revised bill submitted to spur sale of Garden State". Philadelphia Inquirer – via Newspapers.com.
  21. 1 2 Don Clippinger (November 24, 1982). "Horse racing panel back in action". Philadelphia Inquirer – via NewsBank.
  22. 1 2 Form 10-K: Annual Report (Report). Penn National Gaming. March 28, 1997. p. 39 – via EDGAR.
  23. ↑ Form 10-K: Annual Report (Report). Penn National Gaming. March 28, 2001 – via EDGAR.
  24. ↑ Louis Graham (April 2, 1998). "Penn National has its $15 million at the ready". The Commercial Appeal. Memphis, TN – via NewsBank.
  25. ↑ Brent Burkey (November 14, 2013). "Execs depart posts at Penn National Gaming for spin-off company". Lehigh Valley Business. Retrieved 2018-03-26.
  26. ↑ Nick Horvath, Jr.; Adam Bell (April 27, 1994). "Penn National aims to cash in on a gambling law". The Patriot-News. Harrisburg, PA – via NewsBank.
  27. ↑ Tom Dochat (May 28, 1994). "Penn National shares at $10". The Patriot-News. Harrisburg, PA – via NewsBank.
  28. ↑ Form 10-K: Annual Report (Report). Penn National Gaming. March 20, 2000. pp. 10 & 46-47 – via EDGAR.
  29. ↑ Form 10-K: Annual Report (Report). Penn National Gaming. March 28, 2001. p. 2 – via EDGAR.
  30. ↑ Timothy D. May (July 31, 2000). "Penn National buys riverboat casino in Louisiana". Las Vegas Sun. Retrieved 2018-03-16.
  31. ↑ Form 8-K: Current Report (Report). Penn National Gaming. May 7, 2001 – via EDGAR.
  32. ↑ "Bullwhackers sale completed". Denver Post. April 26, 2002 – via NewsBank.
  33. ↑ "Penn completes Hollywood Casino buy". Dallas Business Journal. March 4, 2003. Retrieved 2012-07-19.
  34. 1 2 Bill Bergstrom (August 30, 2002). "Penn going Hollywood, expanding dramatically". Las Vegas Sun. Retrieved 2018-03-26.
  35. ↑ Tom Dochat (October 4, 2005). "Penn National nets 3 casinos in Argosy Gaming deal". The Patriot-News. Harrisburg, PA – via NewsBank.
  36. ↑ Form 10-K: Annual Report (Report). Penn National Gaming. February 29, 2008. pp. 77–78 – via EDGAR.
  37. ↑ Suzette Parmley (September 30, 2005). "Penn National gets OK for deal". Philadelphia Inquirer – via NewsBank.
  38. ↑ "Penn National mulls Harrah's takeover bid". Archived from the original on December 1, 2006.
  39. ↑ USA Today: Penn National Gaming agrees to $6.1B deal. Retrieved June 15, 2007
  40. ↑ Howard Stutz (November 17, 2012). "Penn planning to split in two". Las Vegas Review-Journal – via NewsBank.
  41. ↑ Dimitra Defotis (November 16, 2012). "Penn National Gaming hits jackpot". Barron's. Retrieved 2012-11-16.
  42. ↑ Howard Stutz (October 8, 2013). "Penn National to begin spinoff of real estate holdings". Las Vegas Review-Journal – via NewsBank.
  43. ↑ Jamison Cocklin (November 2, 2013). "Penn National forms spin-off company for tax breaks on real estate". Youngstown Vindicator. Retrieved 2013-11-07.
  44. ↑ Andy Vuong (February 14, 2013). "Johnny Z's developer to acquire Bullwhackers casino in Black Hawk". Denver Post. Retrieved 2013-04-27.
  45. ↑ Form 10-K: Annual Report (Report). Penn National Gaming. February 27, 2014. p. 3 – via EDGAR.
  46. ↑ Kimberly De La Cruz (April 29, 2015). "Penn National to buy Tropicana for $360 million". Las Vegas Review-Journal. Retrieved 2015-04-29.
  47. ↑ "Penn National Gaming Acquires Leading Social Casino Game Developer, Rocket Games, for $60 Million in Accretive Transaction | Business Wire". www.businesswire.com. Retrieved 2016-12-16.
  48. ↑ Form 10-Q: Quarterly Report (Report). Gaming & Leisure Properties. May 3, 2017. p. 8 – via EDGAR.
  49. ↑ Form 10-Q: Quarterly Report (Report). Penn National Gaming. May 3, 2017. p. 23 – via EDGAR.
  50. ↑ "Penn National to acquire Pinnacle Entertainment for $2.8 billion". The Morning Call. Allentown, PA. December 18, 2017. Retrieved 2017-12-29.
  51. ↑ Mark Schlinkmann (December 1, 2017). "Merger could affect four of six St. Louis area casinos". St. Louis Post-Dispatch. Retrieved 2017-12-29.
  52. ↑ "Gaming and Leisure Properties, Inc. announces agreements to accommodate the proposed acquisition of Pinnacle Entertainment, Inc. by Penn National Gaming, Inc" (Press release). Gaming and Leisure Properties. December 18, 2017. Retrieved 2017-12-29 – via GlobeNewswire.
  53. ↑ Sarah Crawford (June 19, 2018). "Margaritaville Resort Casino sale is announced". Shreveport Times. Retrieved 2018-06-19.
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