Penn National Gaming (or PN Gaming) may be in the casino industry, but this company certainly isn’t gambling in the business world: In 4½ decades of operations, PN Gaming has gone from ownership of a single horse-racing track in Pennsylvania to operating/managing about two dozen casinos in the US and Canada – including a world-renowned multi-million gaming house in Las Vegas.
PN Gaming began in Grantville, Pennsylvania, with the opening of the Penn National Race Course in August 1972. The Penn National course enjoyed a solid decade of success, and the company incorporated as the Penn National Race Course Corporation (or PNRC Corp.) in ’82. Twelve years later, a rebranding recast PNRC as Penn National Gaming, Inc.
It was in the early 2000s, however, that PN Gaming finally starting making some national business headlines. In 2003, PN Gaming acquired the assets and property of Hollywood Casino Corp. for the relative bargain price of $668 million. Three casinos came with the deal: The Hollywood Casino Aurora (in Illinois), the Hollywood Casino Tunica (in Mississippi) and a now-defunct outlet in Shreveport, Louisiana.
In late 2004, PN Gaming plunked down a whopping $2.2 billion to buy up the assets of the financially beleaguered Argosy Gaming Company, Illinois’s first-ever licensed casino operator. At that time, PN Gaming was the single largest U.S. casino operator based outside of Las Vegas. Within two years, PN Gaming looked to crack the Sin City market by floating a bid for the reeling Harrah’s Entertainment. Looking back, we can see this as something of an overreach: At the time, PN Gaming’s entire market capitalization was valued at around $3.3 billion, while the Harrah’s operation of some 40 casinos was marked at over $14 billion.
No matter: The PN Gaming portfolio continued its steady growth. By the end of 2012, the company was operating some 29 casinos in North America. At this time, management divided up the company and placed 17 sites under the purview of the newly-formed Gaming and Leisure Properties, Inc. (GLP) in a separation of real-estate assets and operations. As an example of the end result of the move, GLP is today recognized as the owner of the Penn National Track, while PN Gaming is called operator.
Finally, in the “bricks-and-mortar” casino world, PN Gaming cracked that Las Vegas market with the acquisition of the Tropicana Las Vegas for $360 million – a far more reasonable price tag than that Harrah’s was carrying in ’06…
Despite its continued expansion and acqusitions, PN Gaming isn’t resting on its laurels. Approaching its 50-year anniversary, the company has suddenly dived into the 21st century with online gaming. In mid-2015, the company revamped a pair of its older sites previously devoted to “bricks-and-mortar” casino outlets, HollywoodCasino.com and HollywoodSlots.com, to offers some online gaming.
The acquisition of Rocket Games app for $170 million in August 2016 further advanced PN Gaming’s online activity. The San Francisco-based Rocket was founded in 2013 by former employees of Zynga (you know, the folks who brought us Farmville); for ’15, this former startup claimed revenue growth of 500% year-on-year. In announcing the acquisition, PN Gaming representative affirmed the inevitable hope for “meaningful operational and revenue synergies between Penn National’s operations, [its websites] and Rocket’s operations” to “drive near- (sic) and long-term growth for our shareholders.” PN Gaming’s analysis showing “a significant segment” of PN Gaming customers crossover to social gaming hints that the company will be exploring these areas of internet casino gaming soon.
Of course, the purchase of Rocket hardly means PN Gaming is through with its expansion in the casino world. Within a month of the Rocket deal, the Pennsylvania Gaming Control Board announced the official transfer of state licensure to the new owners/operators of the Meadows Casino in North Strobane. Though operations will be undertaken by the Las Vegas-based concern Pinnacle Entertainment, Gaming and Leisure Properties are listed as owners. Acquisition of the Meadows (for $440 million in December 2015) represents the first new acquisition undertaken since the division of assets in ’13.
And as of this writing in September 2016, PN Gaming may yet expand its assets in Canada beyond the operation of the Casino Rama. The Ontario Lottery and Gaming Corporation is currently looking to sell off rights to operations of three Canada-based casinos, including the Woodbine Racetrack in Toronto. PN Gaming has been named as a potential buyer in such a deal.
By 2016, PN Gaming/GLP operates 27 sites in 16 states (Florida, Illinois, Indiana, Kansas, Maine, Massachusetts, Maryland, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, Texas, West Virginia) and the single casino in Ontario, Canada; these include 20 casinos, seven racinos and four horse tracks. In total, PN Gaming runs some 33,000 gaming machines and 800 table games on over 10 million square feet.