Hollywood parent 3rd among U.S. gaming firms

5/20/2012

Since going public in 1994, Penn National Gaming has grown from a single horse track a few miles outside Harrisburg, Pa., to become the third-largest gaming company in the United States, with annual revenues of more than $2.5 billion.

Penn National's start came with the opening of Penn National Race Course in Grantville, Pa., in 1972. The first slot machines weren't added until 1997 at Penn National's newly acquired Charles Town Races in eastern West Virginia. Since then, the company has expanded aggressively, mainly by purchasing several established horse tracks and casinos across the United States.

In 2003, Penn National bought out Hollywood Casino Corp., for about $843 million. Its largest acquisition was that of Argosy Gaming Co. in 2005. Penn National paid $2.2 billion for the Alton, Ill.-based operator of riverboat casinos in Illinois, Missouri, Louisiana, Iowa, and Indiana.

The company now owns or operates 26 facilities in 19 states, including 15 stand-alone casinos, four horse tracks with slots or table games, five other horse tracks, and two greyhound tracks.

Penn National's 20th casino opens May 29 here in Toledo. The Hollywood Casino Toledo will feature 2,002 electronic slot machines, 60 table games, and 20 poker tables, making it one of the gaming company's larger properties.

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Penn National has mostly stayed away from the gambling centers of Las Vegas and Atlantic City, with only one property — the M Resort Spa & Casino several miles south of the Las Vegas Strip — in either area.

Instead, the company has focused on new casino gambling markets such as Ohio and riverboat operations in the Midwest and South. In addition to the casino in Toledo, Penn National is developing a Hollywood Casino in Columbus. That casino is expected to open in the fourth quarter of this year.

Though Ohio voters didn't OK Las Vegas-style casinos with slots and table games until 2009, Penn National has had a presence in Toledo since 2005, when it purchased Raceway Park. In 2010, Penn National purchased the 89-year-old Beulah Park horse track in suburban Columbus.

Both of those tracks are expected to be relocated as Penn National seeks to add slots to its Ohio horse racing operations and does not want to be in competition with itself for gambling dollars.

In March, Penn National reached a nonbinding $200 million agreement with Gov. John Kasich's office that would allow the company to move Beulah Park to Austintown in the Youngstown area and Raceway Park from Toledo to Dayton and open video slots at the new locations.

The publicly traded Penn National reported revenues of about $2.7 billion last year, up from $2.5 billion in 2010.

Though it is the third-largest U.S. gaming company, it trails the top two by a wide margin. Caesars Entertainment Corp. ranked No. 1 last year with $8.8 billion in revenue. MGM Resorts International was No. 2 at $7.8 billion in revenue. On the year, shares of Penn National's stock are up about 18 percent to about $45 a share.

Contact Tyrel Linkhorn at: tlinkhorn@theblade.com or 419-724-6134.