Bloomberg News

Penn National Wins Sole Slot-Parlor License in Massachusetts (1)

February 27, 2014

Penn National Gaming Inc. (PENN:US) was awarded the license to operate the sole slot-machine parlor in Massachusetts. The stock rose 4.5 percent.

The license was tentatively awarded by the state Gaming Commission, Elaine Driscoll, a spokeswoman for the panel, said today in an e-mail. The company will need to accept conditions by tomorrow before an official vote, she said.

Penn National, based in Wyomissing, Pennsylvania, plans to build a $225 million slot-machine facility at the Plainridge Racecourse, a harness-racing track in Plainville, about 35 miles southwest of Boston.

“We are currently reviewing the Gaming Commission’s conditions, but don’t see any major areas of concerns,” Chief Executive Officer Tim Wilmott said in an e-mailed statement.

Penn National rose to $13.25 at the close in New York. It’s down 7.5 percent this year.

The casino, which will include 1,250 slot machines, live racing and the first-ever Doug Flutie Sports Bar, could open by the second quarter of next year, Wilmott said.

The five-member panel considered job creation and the future of the state’s horse racing industry, among other criteria. In 2011, the state legalized casino betting with legislation that authorized three resorts and one slot parlor.

“The Plainville option is a sure-fire bet, it’s a proven operator,” commission Chairman Stephen Crosby said during the deliberations. “I think they’re going to do the job well.”

Possible Value

The project could be worth $1 to $2.50 a share in value for Penn, Cameron McKnight, analyst with Wells Fargo Securities, said in a note today. That’s based on average annual revenue estimates of $230 million to $280 million over a three-year period, said McKnight, who has the equivalent of a buy rating on the stock.

Cordish Cos., based in Baltimore, proposed a $200 million facility in Leominster and pledged to contribute $1 million annually to technology start-ups in the state.

Greenwood Gaming & Entertainment Inc. and track owner George Carney offered a $227 million remodeling of Raynham Park, a former greyhound track in Raynham. The park stopped offering live racing in 2009, following a statewide referendum barring dog racing. Greenwood operates the Parx Casino in Bensalem, Pennsylvania.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net


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Companies Mentioned

  • PENN
    (Penn National Gaming Inc)
    • $11.6 USD
    • 0.32
    • 2.72%
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