Penn Entertainment, Inc. · NASDAQ:PENN
Penn Entertainment — Penn National Gaming — Merger or Acquisition (January 2020)
18 slides from Penn Entertainment's merger presentation, Jan 29, 2020
Slide 1: A Powerful Combination
A POWERFUL COMBINATION JANUARY 29, 2020
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS All statements included in this presentation of Penn National Gaming, Inc. (“Penn National” or the “Company”), other than historical information or statements of historical fact, are “forward-looking statements” within the meaning of the Private Securities Litigation Refor
Slide 3: Who Is Penn Today?
WHO IS PENN TODAY? Best in class operator of regional gaming Largest and best in class operator of 1 and reagcioinngal fgaacmiliintgieasnd racing facilities •Highest tax-adjusted margins in the industry StabHleealcthoyrecobreubsuinsiensesstthhaat ggeenneerartaetses signsiifginciafincatnat nanddggrro
Slide 4: Growing Expansion of Legalized Sports Betting
GROWING EXPANSION OF LEGALIZED SPORTS BETTING… MMaayy 114, 2018 5500% Percentage of the U.S. population expected to have access to regulated sports betting by the end of 2022 (1) Date that PASPA was repealed – opening the door for the expansion of sports betting 20 Number of states that have passed
Slide 5: Across Penn's Geographic Footprint
…ACROSS PENN’S GEOGRAPHIC FOOTPRINT… Penn National property Sports betting authorized, licenses granted to casinos Sports betting authorized, licenses granted to lottery Sports betting authorized, licenses granted to Tribes Sports betting authorized, licenses open / bid Source: Eilers & Krejcik Gami
Slide 6: Has Created a Massive Opportunity
…HAS CREATED A MASSIVE OPPORTUNITY PENN’S SCALE AND FOOTPRINT POSITIONS IT TO CAPTURE SIGNIFICANT SHARE OF A ~$10 BILLION SPORTS AND INTERACTIVE GAMING MARKET Sports and Real Money Interactive Gaming - Total Addressable Market 2025 $12.0 $4.8 – 6.4b $7.5 – 10.4b $10.0 $8.0 (2) High Case Market Size
Slide 7: Sports Delivers a Highly Complementary Demo
SPORTS DELIVERS A HIGHLY COMPLEMENTARY DEMO… SPORTS BETTING ATTRACTS A NEW, YOUNGER DEMOGRAPHIC THAN TRADITIONAL CASINO GAMING PENN’s current demo vs sports betting demo 90% 80% 83% 70% 60% 50% 40% 30% 20% 10% 0% 49% PNG Demo NFL Bettors NBA Bettors MLB Bettors NHL Bettors % male % 21-34 Source: Pen
Slide 8: That Is Proving to Drive Core Revenue
…THAT IS PROVING TO DRIVE CORE REVENUE… RETAIL SPORTS BETTING HAS ALREADY SIGNIFICANTLY BENEFITTED CASINO REVENUES AT PENN PROPERTIES – PARTICULARLY IN TABLE GAME PLAY Hollywood Casino Lawrenceburg 20.0% 18.7% 15.0% 10.0% 5.0% 0.0% -3.2% 4Q 2018 -5.0% 4Q 2019 Slot Volumes Photo credit: local12.com G
Slide 9: With an Even Bigger Impact on iCasino
…WITH AN EVEN BIGGER IMPACT ON ICASINO THE INTRODUCTION OF SPORTS BETTING IN NEW JERSEY HAS BEEN A SUPER-CHARGER FOR ICASINO, WITHOUT NEGATIVELY IMPACTING LAND-BASED CASINO REVENUES Casino revenue growth in New Jersey 70.0% 61.5% 60.0% 50.0% 34.6% 40.0% 32.1% 25.0% 30.0% 21.6% 20.0% 7.0% 5.9% 10.0%
Slide 10: How Does Penn Compete?
HOW DOES PENN COMPETE? FanDuel/DraftKings are leading because of their: • • • Well known sports brand Large database that enjoys sports betting Quality user interface Market Share 7.0 44% To compete, Penn/Barstool must have: A widely recognized sports brand Media integration with a large, relevant a
Slide 11: Transaction Overview
TRANSACTION OVERVIEW • Penn equity consideration to be distributed to key BSS employees without any additional consideration and iCasino products, as well as the right to operate Barstool branded sports bars or restaurants • Penn to step up ownership to ~50% after year 3 path to control or full owne
Slide 12: Strategic Rationale
STRATEGIC RATIONALE Penn will utilize Barstool’s nationally recognized brand for retail and online sports betting and iCasino products 1 Barstool provides Penn with access to complementary audience of 66M monthly uniques1 with a strong affinity for sports and gaming 2 Barstool key talent will be hig
Slide 13: Barstool Sports
BARSTOOL SPORTS A SPORTS & ENTERTAINMENT, 69 PERSONALITIES 38 PODCASTS 23 VIDEO SHOWS DIGITAL MEDIA PLATFORM DELIVERING SATIRICAL, RELATABLE AND ENGAGING CONTENT TO AUDIENCES 24/7 DAILY SOCIAL LIVE EVENTS 13
Slide 14: Barstool Brings a Broad Omnichannel Reach
BARSTOOL BRINGS A BROAD OMNICHANNEL REACH 66M Monthly unique visitors across: 38.5M M 9.2M M VIDEO RS Source: Nielsen Digital, May 2019. Podtrac 3rd party data and company proprietary data from each channel. Subscribers and followers as of year end 2019. Monthly unique data from Q4 (Oct, Nov, or Dec
Slide 15: Fast Growing Core Digital Media Business
FAST GROWING CORE DIGITAL MEDIA BUSINESS BARSTOOL CONTINUES TO DEMONSTRATE STRONG GROWTH AS THE COMPANY GENERATED NEARLY $100M OF PROFITABLE REVENUE Revenue Growth (Y/Y) 80% 65% 3% 3% Audio - Advertising & Content 5% 60% Commerce 32% 40% Digital - Advertising Events / Live Sports Licensing 20% 1% 0%
Slide 16: Barstool Brings Valuable Demographics
BARSTOOL BRINGS VALUABLE DEMOGRAPHICS BARSTOOL REACHES 48% OF MALE AND 44% OF FEMALE MILLENNIALS AND GENERATION X ACROSS THE UNITED STATES 62% of “Stoolies” bet on sports 38% 44% of those gamblers bet at least 1x/week 41% of those gamblers say their average bet is >$51 4% 21-34 35-44 45-54 55-64 65+
Slide 17: Why Did Penn/BSS Choose Each Other?
WHY DID PENN/BSS CHOOSE EACH OTHER? Largest regional casino footprint in the U.S. Talent, tech, capabilities and vision to be a leading omni-channel sportsbook and casino operator Committed to deep integration with a media partner Event space, concert venues, racetracks, golf courses and studios to
Slide 18: Penn / Barstool v. the Competition
PENN / BARSTOOL V. THE COMPETITION Source: Internal assessment of = Fully addressed = Partially addressed publicly available information 18 Revenue Drivers Strong sports brand Large sports betting demo In-house product development Large retail sportsbook footprint Leader in social/digital media Prof
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