Penn National Gearing Up for Launch of Ontario Sports Betting & Online Casino

Penn National Gearing Up for Launch of Ontario Sports Betting & Online Casino

By Bill Ordine

Penn National CEO Jay Snowden said in a quarterly earnings call Thursday that there are aspects to the opening of legalized Ontario betting sites on April 4 that especially benefit his company.

Snowden said he believes Penn National can capture, in online sports betting, no lower than low double-digit market share. He also gave a projection for Ontario online casino play, which usually offers greater profit than online sports betting, in the mid- to high single-digits.

His expectation is to grow both market shares once they go live on April 4. Canada, with a population of more than 14.5 million people, would be the fifth-largest U.S. state.

Snowden has been critical of the free spending marketing approaches of some of his company’s online sports betting competitors and has boasted of his company’s lower player acquisition costs.

Penn National’s strategy for building a customer base was to partner with sports media company Barstool Sports in the U.S. and to convert those sports media users to sports betting customers. He has the same strategy for Canada, having acquired the popular digital sports media company north-of-the-border, theScore, with expectations of converting those sports-fan app-users to sports gambling.

Helping to support Penn National’s approach, according to Snowden, is a major difference in gambling regulations that sets Canada apart from America.

“There are advertising restrictions in Ontario as it relates to gaming. You cannot advertise promotions or discounting to your business — which we welcome,” Snowden said. In America, much of sports betting marketing trumpets bonuses and giveaways.

“I like the fact that you can’t just put your business on sale at heavy discount to get people to download and deposit and bet — which is what we’ve seen here in the U.S., in most states.”

Penn National’s Message

Instead, Snowden said, his company’s messaging will be about the distinction regarding what has been, so far, in Canada a “gray market” for sports betting.

“Canada has been a gray market for some time now but the regulators in Ontario are requiring those gray market operators to go through some (know-your-customer) and regulatory requirements before they relaunch post-April 4,” Snowden said. “So, I think that will be interesting to see how that plays out versus some of the U.S. markets … (where) it was more of a dynamic where maybe people were betting illegal off-shore, or with bookies. Whereas (in Canada), it was really gray. It wasn’t illegal, or legal, it was kind of gray.”

Snowden explained how the conversion from a gray market to a legal one works in marketing:

“I think it’ll be more about just educating. We’ll spend some money when we launch there because you’re educating, you’re really in education mode about this move from gray market to above-the-board market, (that’s) legalized. And you want to make sure that people know who those legal operators are going forward.”

TheScore Relationship Key

Finally, Snowden said he believes his company’s association with a trusted and popular sports media company will be key.

“We think we’re in a really strong position because it’s something like 20% of people in Ontario have theScore sports media app on their phone,” he said. “And so, you think about the ability to convert from sports media to sports betting when (a potential customer) can do both on the same app and see all the live odds.

“If you’re here just checking scores, you’re going to know very quickly that if you’re a theScore media app user, that we’re now offering live sports betting with the theScore bet app Ontario.”

Penn National's Earnings Strong

Regarding corporate earnings, Penn National reported revenues of $1.6 billion in the fourth quarter 2021, an increase of $545.1 million year-over-year, and a lesser increase of $231.3 million compared to pre-COVID 19 pandemic 2019.

Penn National had net income of $44.8 million in the fourth quarter 2021 compared to net income of $12.7 million in fourth quarter 2020, and net loss of $92.9 million in fourth quarter 2019.

Also, Snowden announced that the company is embarking on a $750 million share repurchase program over three years. Such moves often reflect a company’s confidence in its long-term prospects.

Penn National differs from some other companies in the online sports gambling business in that it has a substantial portfolio of brick-and-mortar casinos which — when not adversely impacted by extraordinary circumstances, such as pandemic shutdowns — contribute a sustainable source of revenue. Penn National’s regional gaming footprint includes 44 properties across 20 states.

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WRITTEN BY
OntarioBets.com
Bill Ordine
Bill Ordine was a reporter and editor in news and sports for the Philadelphia Inquirer and Baltimore Sun for 25 years, and was a lead reporter on a team that was a finalist for the Pulitzer Prize in Breaking News. Bill started reporting on casinos and gaming shortly after Atlantic City’s first gambling halls opened and wrote a syndicated column on travel to casino destinations for 10 years. He covered the World Series of Poker for a decade and his articles on gaming have appeared in many major U.S. newspapers, such as the Los Angeles Times, Chicago Tribune, Miami Herald and others.
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Bill Ordine was a reporter and editor in news and sports for the Philadelphia Inquirer and Baltimore Sun for 25 years, and was a lead reporter on a team that was a finalist for the Pulitzer Prize in Breaking News. Bill started reporting on casinos and gaming shortly after Atlantic City’s first gambling halls opened and wrote a syndicated column on travel to casino destinations for 10 years. He covered the World Series of Poker for a decade and his articles on gaming have appeared in many major U.S. newspapers, such as the Los Angeles Times, Chicago Tribune, Miami Herald and others.
... Read More