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Penn National and Barstool Risks

May 5, 2023 7

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Penn National and Barstool Risks

Penn National Gaming is facing risks associated with its connection to the Barstool brand, as recent controversies have overshadowed the company’s online progress. Analysts suggest that Penn will have to endure further social media storms to benefit from the audience Barstool brings. The dismissal of Ben Mintz for airing racist slurs has raised questions about Barstool’s future post-Penn’s acquisition, and the potential impact on revenues and consumer perception.

Deutsche Bank highlighted that Penn’s property level EBITDA forecasts are moving higher, but the margin decline in the brick-and-mortar business is a concerning aspect of the quarter. The bank also noted that Penn is “somewhat catalyst starved” as regional casino growth is difficult to envision, returns from projects are years away, new online launches won’t significantly impact earnings, and the M&A environment is benign.

Penn shares dropped 10% following the sacking of a high-profile employee and Dave Portnoy’s controversial Twitter posting.

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