During a quarterly earnings call on Thursday, CEO Jay Snowden pointed out several favorable elements related to the launch on April 4.legalized Ontario betting sites Snowden expressed confidence that in online sports betting, Penn National can secure at least a low double-digit share of the market. He also forecasted potential gaming revenue, suggesting it may fall within the mid- to high single digits.
His aim is to increase their market shares once operations commence on April 4. Given Canada’s population of over 14.5 million, it ranks as the fifth-largest U.S. state.Ontario online casino Snowden has voiced concerns about the extravagant marketing strategies adopted by some of his rivals in online sports betting, while emphasizing the lower costs his company incurs when attracting customers.
To establish a customer base, Penn National has collaborated with Barstool Sports, a sports media entity in the U.S., with the intention of converting its audience into betting customers. He intends to replicate this strategy in Canada, having acquired the popular sports media platform theScore, aiming to turn its sports fan users into sports gamblers.
According to Snowden, a significant advantage for Penn National lies in the different gambling regulations in Canada compared to the U.S.
He noted, 'Ontario imposes strict advertising limitations related to gaming. Promotions or discounts are not permitted, which we find beneficial.' In contrast, many sports betting companies in the U.S. heavily promote bonuses and incentives.
'I appreciate that you can’t slash prices to attract downloads and deposits — a common practice seen in many U.S. states,' he remarked.
Rather than engaging in discount-driven marketing, Snowden indicated that Penn National would focus on clarifying the situation regarding what has previously been a ‘gray market’ for sports betting in Canada.
He elaborated, 'Canada has operated under gray market conditions for a while, but Ontario's regulatory authorities are now requiring gray market operators to meet various compliance standards before relaunching after April 4.' He contrasted this with U.S. markets where illegal offshore betting was prevalent, stating that Canada’s situation was not clearly legal or illegal but rather ambiguous.
Penn National’s Message
Snowden detailed the transition from a gray market to a legitimate market would primarily involve educational efforts:
'Our launch will involve spending on educating the public about the transition from gray to regulated betting venues. It is crucial that people recognize who the lawful providers will be moving forward.'
Finally, he conveyed his belief that Penn National’s relationship with a reputable sports media outlet would be a significant advantage.
'Our position is quite strong, considering that around 20% of Ontario residents have theScore app on their devices,' he noted. 'This allows for seamless conversion from sports media engagement to sports betting, as users can easily access live odds within the same app.'
TheScore Relationship Key
'If users are merely checking scores, they’ll quickly realize that for theScore app users, we are now offering live sports betting as well.'
In terms of financial performance, Penn National reported a revenue of $1.6 billion for the fourth quarter of 2021, marking an increase of $545.1 million compared to the same quarter last year and a smaller rise of $231.3 million from the pre-pandemic figures of 2019.
The company achieved a net income of $44.8 million in the fourth quarter of 2021, a notable increase from a net income of $12.7 million in the same period of 2020, and a contrast to the net loss of $92.9 million recorded in 2019.theScore bet app Ontario .”
Penn National's Earnings Strong
Moreover, Snowden announced a new share repurchase initiative valued at $750 million, planned over a three-year period. Such initiatives typically indicate a firm’s optimism about its long-term future.
Penn National distinguishes itself from other online sports betting competitors by maintaining a significant number of physical casinos, which provide a reliable source of revenue when not adversely affected by extraordinary events, like pandemic closures. The company’s gaming operations span 44 properties across 20 states.
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Fromdeereplanet.com
