Gaming Expansions Will Benefit Penn In 2010
Filed in Penn National Gaming (PENN) on Dec.19, 2009
Penn National Gaming (PENN: 27.36 +0.74%) favored 2009 fairly well compared to others in the gaming industry as the majority of the companies casinos are located in the Midwest where flat visitation rates and spending have been reported.
Many states have been looking towards gambling expansions to help supplement budgets and analysts feel that Penn has positioned themselves to benefit substantially in 2010.
In West Virginia, voters approved the expansion of table games in slot parlors. Penn plans to incorporate tables at its Charles Town Races & Slots facility in the first half of 2010. Joseph Greff analyst with J.P. Morgan says the addition could be worth $1.32 a share in incremental equity for Penn.
Ohio, Kansas City and Pennsylvania also have similar bills pending legislative approval.
Penn is in the beginning phases of developing two casinos in Ohio and one in Kansas City. The company already owns and operates one in Pennsylvania.
Missouri and Colorado markets also received a lift from the easing of game restrictions which should benefit Penn in 2010 with two casinos in these states.
However investors seem to fear that Penn will increase its offer on the bankrupt Fontainebleau in order to secure a place in the Las Vegas market and overpay for the rights to the property.
Last month billionaire Carl Icahn outbid Penn’s proposed stalking horse bid, however the bankruptcy auction has not been finalized and bids can still be made
EDITORIAL FOOTNOTE: Is this the same Penn National that sold a horse race track in Pennsylvania? Why didn't these people (Penn National) try to open a casino, on their property, at Pocono Downs?
Did they sell it to the Mohegans because maybe they (Penn National) knew they couldn't make money dealing with the state at 55% to 62% off the top to the state?
If they (Penn National) couldn't make it with those percentage, what made the Mohegan Tribal Council under then Chairman Mark Brown think, they could make it in Pennsylvania?
Did the Mohegan Tribal Council make a big mistake opening the Mohegan Sun at Pocono Downs? Could it be that now Penn national is looking to open casinos elsewhere with the money the Mohegans paid for Pocono Downs? What do you think?