Penn National Betting App
Penn National Gaming‘s slightly delayed rollout of its Barstool Sportsbook app, debuting exclusively in Pennsylvania, will miss the NFL season kickoff and the first weekend of games, including the two PA teams’ openers. Testing of the online betting app is set for Sept. 15-17, but that still depends on final iOS app approval, a Penn. In connection with the framework agreement, Penn National has also agreed to take a strategic equity stake in theScore. The 20-year framework agreement provides theScore with the right to obtain market access to offer online and mobile sports betting and i-gaming applications in 11 states where Penn National.
WYOMISSING, Pa.--(BUSINESS WIRE)--Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn National” or the “Company”) announced today that Carl Sottosanti, Executive Vice President, General Counsel and Secretary, plans to retire effective December 31, 2020. As his successor, the Company named 20 year gaming industry legal executive, Harper Ko, who will serve as Executive Vice President, Chief Legal Officer and Secretary, effective January 1, 2021, subject to customary regulatory approvals. Ms. Ko joins Penn National from Everi Holdings Inc. (EVRI: NYSE), where she has served as Executive Vice President and Chief Legal Officer – General Counsel.
Throughout his distinguished 17-year career at Penn National, Carl Sottosanti has played a critical role in helping drive the Company’s growth and evolution from a small regional gaming operator into the nation’s leading omnichannel provider of retail and interactive gaming, sports betting and entertainment.
Mr. Sottosanti joined Penn National in 2003 as Vice President of Legal & Business Affairs and Deputy General Counsel. He helped lead the legal and regulatory efforts surrounding the Company’s acquisitions of Hollywood Casino Corporation and Argosy Gaming, each of which doubled the size of Penn National at the time. He also helped oversee Penn National’s corporate governance, as well as labor and employment matters.
In 2014, Mr. Sottosanti was promoted to Executive Vice President and General Counsel and helped guide Penn National through the next chapter of its growth story, including the acquisition and successful integration of Pinnacle Entertainment, as well as its investment in Barstool Sports.
“Throughout his career at Penn National, Carl has been known for his tireless work ethic, dogged determination, and fierce advocacy in support of our company’s interests,” said Jay Snowden, President and Chief Executive Officer. “Carl has been a trusted personal advisor and a consummate teammate, and while he’ll be leaving behind some big shoes to fill, I’m confident that Harper Ko will do a great job in carrying on the standard of excellence that Carl has established for our Legal Department.”
Harper Ko brings more than 20 years of corporate legal and regulatory compliance experience on behalf of gaming equipment suppliers and casino operators to her new role at Penn National. She has served as Executive Vice President, Chief Legal Officer – General Counsel and Secretary at Everi since 2017 and was tapped to help guide the former Global Cash Access through its ongoing transition to a full-service casino gaming equipment and payment solutions provider.
“Harper brings a wealth of expertise regarding the industry’s complex regulatory and compliance requirements that will serve us well as we continue to execute our growth strategies across our land-based, interactive and sports betting platforms,” said Mr. Snowden. “We’re excited to add someone of her caliber to our team.”
Prior to joining Everi, Ms. Ko served as Deputy General Counsel, Gaming for Scientific Games Corporation. During her time there from November 2014 – December 2017, she led the legal integration of Bally Gaming, Inc. SHFL entertainment Inc., and WMS Gaming Inc. into the Scientific Games Gaming division and served as a strategic advisor to their Gaming unit executive management team on all material commercial transactions, customer and third-party issues, and regulatory compliance and litigation matters. Ms. Ko joined Scientific Games following its acquisition of Bally Gaming, Inc., in November 2014 where she served as Assistant General Counsel beginning in November 2007. Prior to that Ms. Ko was a Contract Attorney with Harrah’s Operating Company and Associate Corporate Counsel for Aristocrat Technologies, Inc. Ms. Ko began her career in the gaming industry as Staff Counsel for WMS Gaming Inc. from May 2000 to August 2004.
Ms. Ko holds a J.D. from Chicago-Kent College of Law, and a B.S. in Psychology as a Natural Science from the University of Michigan. She is a Board Member at Project 150, a 501(c)3 non-profit charitable organization committed to helping over 2,500 students in 45 high schools across Las Vegas. Ms. Ko previously served as an Officer (co-General Counsel, Vice President) of the Association of Gaming Equipment Manufacturers, and is a past recipient of the Rising Star Award by Great Women in Gaming.
About Penn National Gaming
With the nation's largest and most diversified regional gaming footprint, including 41 properties across 19 states, Penn National continues to evolve into a highly innovative omni-channel provider of retail and online gaming, live racing and sports betting entertainment. The Company's properties feature approximately 50,000 gaming machines, 1,300 table games and 8,800 hotel rooms, and operate under various well-known brands, including Hollywood, Ameristar, and L'Auberge. Our wholly-owned interactive division, Penn Interactive, operates retail sports betting across the Company's portfolio, as well online social casino, bingo, and iCasino products. In February 2020, Penn National entered into a strategic partnership with Barstool Sports, whereby Barstool is exclusively promoting the Company's land-based and online casinos and sports betting products, including the Barstool Sportsbook mobile app, to its national audience. The Company's omni-channel approach is bolstered by the myChoice loyalty program, which rewards and recognizes its over 20 million members for their loyalty to both retail and online gaming and sports betting products with the most dynamic set of offers, experiences, and service levels in the industry.
After nearly crapping out, Penn National Gaming appears to be back on a streak.
Its partnership with Dave Portnoy‘s Barstool Sports at least in part fueled Penn stock’s rise, fall and resurrection from January to June.
Penn National wanted to go big
The roller coaster ride came about because Penn, a top regional gaming company headquartered in the heartland of Pennsylvania just north of Harrisburg — think small-town suburbia set among farm fields and forested small mountains — had bigger aspirations at the start of the year.
What had begun as a family horse racing business wanted to go really big.
Having made itself a presence in nearly every legal US gambling market, with 41 properties and 26,000 employees, Penn was bumping up against economic concentration regulations.
Penn wanted Barstool as an online sports brand
That meant the only way for it to really grow was to tap a new market, a market free of the geographic constraints that came with buying or building yet another property.
The booming online sports betting market — which Penn had only tapped through brick-and-mortar under a past executive team — was its ticket to the gaming stratosphere.
On Jan. 29, Penn National rolled the dice and bought a 36% share of the sports-centric, risque and sometimes raunchy blog and podcast business Barstool Sports.
The purchase was for approximately $135 million in cash and $28 million in shares of non-voting convertible preferred stock. Penn swiftly closed the deal after the announcement.
Additionally, Penn National agreed to increase its ownership of Barstool to approximately 50% through an incremental investment of approximately $62 million at the end of three years.
Barstool brings a new demographic to Penn
Jay Snowden, president and CEO of Penn National, spelled out the rationale of buying a company without an internet gambling platform on the company’s website:
“This exciting new partnership with Barstool Sports reflects our strategy to continue evolving from the nation’s largest regional gaming operator, with 41 properties in 19 states, to a best-in-class omnichannel provider of retail and online gaming and sports betting entertainment.
“With its leading digital content, well-known brand and deep roots in sports betting, Barstool Sports is the ideal partner for Penn National and will enable us to attract a new, younger demographic, which will nicely complement our existing customer database.
“In addition, with 66 million monthly unique visitors, we believe the significant reach of Barstool Sports and loyalty of its audience will lead to meaningful reductions in customer acquisition and promotional costs for our sports betting and online products, significantly enhancing profitability and driving value for our shareholders.”
Coronavirus disrupts the plan — and Penn’s stock value
And on paper, the plan worked at first.
The stock, which had hovered in the $25 to $26 range at the start of the year, hit $38.28 a share on Feb. 13.
Then came COVID-19 and an existential crisis for Penn stock, which bottomed at $4.52 on March 18.
Casinos shut down. Horse tracks shut down. Penn furloughed most employees. Two PA expansion projects, mini-casinos, stopped construction. Assets were sold. A huge stock offering followed to raise cash.
Penn casino reopenings coincide with rising stock price
But now properties are reopening. Employees are returning. But at least at least 1,900 Penn jobs at casinos are gone for good as the company pivots toward online wagering. Resuming work on the mini-casinos in Yorkand Morgantown still awaits, though.
Meanwhile, Penn is rebranding its retail books to carry the Barstool name. Its mothership casino in PA, Hollywood Casino at Penn National Race Course, is back up and running, and the company is working to create an online presence based on the Barstool brand.
In fact, despite recently announced permanent layoffs, the company is on a hiring tear.
On Monday, CNBC’s Jim Cramer remotely hosted Snowden of Penn, along with Portnoy and Barstool CEO Erika Nardini, on his program The Street.
And while Cramer briefly discussed Penn stock’s up, down and up record so far this year, he only spoke of Barstool and the coronavirus shutdown when laying out the context.
Penn plans August launch of Barstool online betting app
Snowden told Cramer that Penn had 70% of its propertiesoperating at 50% capacity and had called back 11,000 employees. No mention was made of the permanent job losses.
Snowden also told Cramer that the Barstool online book should launch in August. The target would put Penn ahead of the anticipated NFL start.
Nardini spoke of Barstool’s growth across platforms and the devoted audience it delivers.
Penn National Betting App
Davey Day Trader moves the market again
Portnoy, uncharacteristically wearing a suit (brokers referred to as “suits” are frequent targets of his diatribes), predicted that Barstool will be the “dominant player” once sports return.
Penn National Sports Betting
He boasted later that night on Twitter to his 1.5 million followers:
Penn National Betting App Download
“I just sold the shit out of myself in Penn National.”
By the next day, Penn’s stock was up more than 17% at midday. Penn closed up about $5 a share, or just under 13%, at $36.82. Several market stories took note.
Penn Sports Betting
Two days later, the price has mostly played in the $33 range.
Since his highly publicized shift to “Davey Day Trader Global,” Portnoy has demonstrated an ability to influence stock prices, presumably through his “stoolies” who have followed him into the market. His latest national appearance is yet another example of the “Barstool effect” at work, some say.
Penn National’s imminent expansion into online sports wagering and the long-term stability of the stock price should provide a more accurate picture of the company’s position in the months to come.