Penn National Stock Extends Epic Rally as Louisiana, Mississippi Casinos Reopen

Posted on: May 20, 2020, 09:22h. 

Last updated on: May 20, 2020, 11:11h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Shares of Penn National Gaming (NASDAQ:PENN) are soaring again Wednesday on news that the operator’s venues in Louisiana reopened yesterday, while its Mississippi casinos will welcome back gamblers on Thursday.

Penn National Gaming Reopens
Penn National CEO Jay Snowden said the company’s Louisiana casinos are open, with Mississippi soon to follow, and that news boosted the stock. (Image: CNBC)

Penn runs 41 casinos in 19 states, including five apiece in Louisiana and Mississippi, meaning about 25 percent of the company’s portfolio is coming back online.

Penn National Gaming announced today that on May 18, 2020, the Company successfully reopened its five casino properties in Louisiana,” according to a statement. “The Company also announced that it plans to reopen its five casinos in Mississippi on Thursday, May 21, 2020, pending final regulatory approval.

With the stock higher by more than seven percent at this writing Wednesday, it’s continuing a stellar run off its March lows. During the darkest days of the coronavirus impact on gaming equities, Penn sank below $4. But since then, the name posted an almost seven-fold gain, including a rally of more than 33 percent over the past week.

Geography Matters

It still isn’t clear exactly when Penn will reopen gaming properties in some of its other marquee states of operation, including Illinois, Nevada, Ohio, and Pennsylvania. Uncertainty in those regions underscores the importance of the company’s status as the largest operator in both Louisiana and Mississippi.

Bringing the Boomtown Casino Bossier City, Boomtown Casino New Orleans, L’Auberge Casino Baton Rouge, L’Auberge Casino Lake Charles, and Margaritaville Casino Bossier City back online in Louisiana is important because the Pelican State is the fifth-largest in the US in terms of gaming revenue, trailing only Nevada, Pennsylvania, New Jersey, and New York.

Penn’s Mississippi venues reopening are as follows: 1st Jackpot Casino Tunica, Ameristar Casino Hotel Vicksburg, Boomtown Casino Biloxi, Hollywood Casino Gulf Coast, and Hollywood Casino Tunica.

On the company’s first-quarter earnings conference call earlier this month, Penn CEO Jay Snowden said Louisiana “is a super important state for us,” noting it’s right there with Ohio and Missouri in terms of where the operator generates the most revenue.

Other State Forecasts

In the statement, Penn noted that West Virginia, where the company runs the Hollywood Casino at Charles Town Races, is aiming to reopen gaming venues on June 5.

“Penn National is very well-positioned to resume its positive momentum that was cut short in mid-March by the COVID-19 pandemic,” said Snowden. “Our geographic diversification across 19 states – with no more than 15% of our revenues being derived from any single state – should be a significant benefit as states begin to open casinos on a sequential basis.”

Reopening dates for Ohio casinos have yet to be set, though horse racing without fans will start again Friday. Missouri gaming venues are slated to reopen on June 1. Snowden didn’t comment on those states in the statement issued by Penn today. Illinois, where Penn is also the largest operator, is moving forward with broader reopening plans. But there’s no timetable for when casinos in the Land of Lincoln will again welcome gamblers.