Not surprisingly, Penn National is aggressively lobbying for approval of slots in Pennsylvania. Bills approving slot machines in this state have passed both houses of the state legislature, and Gov. Ed Rendell supports the legislation. Final passage awaits agreement on a compromise version of the House and Senate bills. Plans for construction of such facilities are already on Penn National's drawing boards.
Meanwhile, third-quarter net revenues rose 81.2% to $316.1 million, compared with $174.4 million for the same period a year ago. Income from operations increased 76.5% to $49.6 million in this third quarter, up from $28.1 million in third quarter 2002.
"For the third consecutive quarter we generated `same store' (earnings) gains at each casino property that we have owned for more than a year," says Peter M. Carlino, CEO. The gains, he says, "highlight the benefits of our long-term strategy of expanding our gaming property portfolio, investing in property expansion, strengthening property-level management, and the successful execution of our financing plans to fund current and future growth."
During third quarter, slot positions at the Charles Town property were expanded by 26%, making them a major contributor to that facility's 34% gain in earnings. Completion of Penn National's earlier acquisition of three former Hollywood Casinos contributed approximately 37% of overall earnings during the quarter.
At the same time, however, the company faced increases in the Illinois gaming tax at its Aurora facility, the full impact of which "will be more damaging next year," Carlino notes. The company's racing operations in Pennsylvania and New Jersey suffered a drop of approximately 15% in earnings during third quarter.
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