Penn’s Portnoy problem; Unexpected winners, losers in Pennsylvania; Mega-Jottings

That ongoing bromance between Barstool Sports founder Dave Portnoy and Penn National Gaming CEO Jay Snowden is prompting regulatory scrutiny in Indiana and even Nevada, especially as Penn girds its loins for a full Barstool buyout. That would bring the uncouth Portnoy into the Penn fold as a key player in the company—and he’s not exactly someone you’d want to bring home to the gaming control board. The brash Portnoy faces serial accusations of sexual assault (which he denies) and Snowden has lashed himself to the Barstool mast. As the Wall Street Journal puts it, Snowden “stands by Mr. Portnoy and still believes in Barstool’s media appeal as key to the company’s future in sports betting and digital media.”

Portnoy’s questionable character has already cost Penn a shot at the New York State OSB market—although it could get a second bite of the Big Apple as money-mad lawmakers are pondering doubling the number of OSB licenses in the Empire State. Snowden has joined the chorus of those who say the current level of sports betting market is unsustainable. If Penn gains Barstool as an exclusive megaphone for its product, those costs could be shaved substantially. “They’re profitable, which is rare for a lot of digital media businesses,” Snowden told the WSJ. “They’ve delivered on what they said they would do.”

Nevada Gaming Control Board Chairman Brin Gibson said he is trying to “protect the reputation of the state and the reputation of the state’s gaming industry,” which is more than he did vis-a-vis sexual predator Leon Black, but better late than never. Also, Penn has a minimal presence in the Silver State, so this is a fight Gibson can afford to pick. Indiana, for its part, is monitoring l’affaire Portnoy but taking no action. The gist of the issue is a pair of articles by Insider.com which detailed Portnoy’s sex life. “Some of the women in the Insider articles accused Mr. Portnoy of filming their sexual encounters with him without their consent, and said that their consensual sexual experiences with Mr. Portnoy became violent or painful beyond what they were comfortable with, in one case leading to a rib injury.” Blech!

Portnoy threw a litigious snit, especially after Barstool lost $12 million in ad bookings, and is suing Insider for defamation. Penn is not exactly an unconcerned bystander, as the Portnoy scandal has helped cost it 40% of its stock valuation. Both companies have gone into damage-control mode, with Barstool raising money for pandemic-afflicted companies owned by women and with Penn reiterating its anti-harassment policy. But, as Snowden plans to welcome Portnoy into the Penn braintrust, there’s only so much tap-dancing that can be done to make the problem appear to go away—and not anytime soon.

Pennsylvania gaming revenues were up 24% from 2021 in February, as the state crowned a new winnings champ: Hollywood Penn National with $59.5 million, a 42% leap. Parx Casino receded to second place with $53.5 million, up 14%. Wind Creek Bethlehem followed with $41 million (+54%) and Rivers Philadelphia seems to have shrugged off the Cordish Gaming threat, posting $40.5 million (+23%) as players return to their old stomping grounds. Valley Forge Resort was flat at $31 million but Rivers Pittsburgh surged 30.5% to $28 million. Mohegan Sun at Pocono Downs gained 32% to $20 million, Mount Airy ceded 5% to $18.5 million and Harrah’s Philadelphia recouped 22% to finish at $18 million.

At the back of the Philly pack, Philadelphia Live (pictured) recorded a feeble $17 million, up 3.5%, while Hollywood Meadows suffered a 17% reversal to $12 million. Presque Isle Downs‘ $9.5 million represented a 26.5% gain, Pittsburgh Live vaulted 46% to $9 million while new Hollywood York recorded $7.5 million. Hollywood Morgantown is barely a year old, explaining its 1,630% moonshot to $3.5 million. Despite a 31% uplift, Lady Luck Nemacolin was in its wonted last place with $2 million.

Sports betting revenue fell 33% from 2021 and, of the $22 million in revenue, $22.5 million was splurged on promotions, pushing sports wagering into the red. Handle, in case it matters, was $597 million, up 17%. “We continue to be curious, as to the impact of a cooling promotional environment, should it begin, on the handle and [gross gaming revenue] growth metrics that the industry has continued to point to,” noted a skeptical Carlo Santarelli of Deutsche Bank. One non-factor was Caesars Sportsbook, which still hasn’t rolled out its Liberty platform in the Keystone State. At least Internet gambling was a bright spot, up 32% to $102.5 million, as revenue-per-day hit record metrics.

Sports betting revenue was proportional to handle. Newly profitable FanDuel was tops with $213 million in action yielding $6 million. DraftKings was second with $140 million and $5 million.Then came BetMGM ($72 million handle, $4 million) and Barstool ($47 million handle, $2 million revenue), as only $39 million in wagers were placed in person, led by Parx with $6.5 million in handle. PlayUSA analyst Katie Kohler preferred to look ahead: “With the Phillies and Pirates now expected to play full schedules, sports books can look forward to the first normal sports calendar since 2019.” That’s something we can applaud.

Jottings: Although it’s Deval Patrick‘s legacy, Massachusetts Gov. Charlie Baker (R) has got to be grateful for it: Bay State casinos just passed the $1 billion lifetime threshold in taxes sent to Beacon Hill. A disproportionate contribution is made by Penn National Gaming‘s Plainridge Park racino (shown), levied at 49% of revenues … Ocean Casino Resort has spent $5 million on a new sports book, set for a summer debut, and definitely looks like it will get its money’s worth. Ocean continues to fine-tune its casino floor, at a cost of $25 million … Greektown, formerly one of the least impressive casinos in memory, has put $30 million and 18 months into capex maintenance, including a theming the property to resonate with the image of Detroit. Said Greektown exec Ryan Bufalini, “We’ve taken a heavy Detroit influence throughout, whether it be the elevator lobbies, the hotel lobby itself, records on the wall, beautiful artwork, a lot of murals that are from in and around the city, we’ve incorporated throughout the hotel itself.”

… Las Vegas Sands‘ top-secret Asian priority is out and we saw it coming a mile off: Thailand. Casinos aren’t legal there yet but the prospect of having a Sands megaresort is the kind of thing that can change minds. Analyst Vitaly Umansky is skeptical, though, telling an interviewer, “They’re going to want you to build a US$5 billion property catering only to foreigners and with an absurd tax rate—and none of it will ever pan out.” … Leisure travel is back, which is hardly news. Business trips, not so much. “According to Morning Consult‘s data, the number of pre-pandemic business travelers who say they will never take a business trip again has grown in multiple markets, suggesting that the extended downturn in becoming ingrained in permanent behavior.” That’s hardly music to Las Vegas‘ ears, for one … Tomorrow marks the opening of Comanche Nation Entertainment‘s modest War Party Casino, a 250-slot facility near Devol, Oklahoma. It’s the first Comanche-branded casino in 14 years … Caesars Sportsbook is putting its money on horse racing. It’s partnering with the New York Racing Association to launch OSB for the Sport of Kings. The alliance with NYRABets gives Caesars the ability to take wagers on races at over 250 tracks. Now that’s an empire.