In the two years since Jay Snowden assumed his current role as chief operating officer of Penn National Gaming, his company has been in a perpetual growth mode. From opening racinos in Ohio and Massachusetts to acquiring a route operator in Illinois to finally gaining a foothold on the Las Vegas Strip in its purchase of the Tropicana, Penn has morphed from a small regional operator into one of the industry’s largest companies.
Under Snowden’s watch, Penn pioneered the practice of placing gaming properties in real estate investment trusts, its Gaming and Leisure Properties, Inc. (GLPI) REIT, spun off as a Penn subsidiary in late 2013, currently owning 19 properties it leases to the operator and another two—in Perryville, Maryland and Baton Rouge, Louisiana—it both owns and operates.
For 2016, Snowden will look to seize opportunities not only in Las Vegas, where it will capitalize on its new Strip presence, but across the country.
In the Midwest, Penn is moving on two fronts. The GLPI subsidiary is currently working to complete the $4.75 billion purchase of the 14 casinos of Pinnacle Entertainment, and Penn is moving to cash in on Illinois’ VGT law, acquiring Prairie State Gaming, a route operator with more than 1,100 video slots in 270 taverns and cafes around the state.
Snowden says Illinois, where operators have consistently faced challenges from high taxes to threats of gaming expansion, is now firmly on the company’s growth radar.
“We’re looking at Illinois in 2016 and beyond differently than we have the last several years,” Snowden says. “We’re looking at it as a state where we can grow our business. We’re really excited about that.”
Illinois is not the only part of Penn’s regional empire Snowden says will contribute to growth in 2016. From Ohio, where the company has four casino properties, to Pennsylvania, to San Diego, where the tribal Hollywood Casino Jamul will open by mid-year, Snowden says Penn will reap the benefits of the recent resurgence of regional gaming.
“We’re finally starting to experience some economic tailwinds in the form of lower unemployment, wage growth and low gas prices,” Snowden says. “Those factors are all real, and result in extra cash in your pocket. When our customers have more disposable income, they love to engage in gaming, a form of entertainment and their favorite pastime.”
Snowden says the company’s focus in the coming months will be to establish, integrate and grow all of its new properties, including building customer loyalty at Plainridge Park, the first casino in Massachusetts, where net slot win is already more than $12 million a month despite a limit of 1,250 slots.
Meanwhile, Snowden says the company is ready for new competition for its Hollywood Casino at Charles Town Races in West Virginia, which is facing the opening in nearby Prince George’s County, Maryland of the massive MGM National Harbor late this year.
“We’ve really been focusing the past couple of years on enhancing the offerings and experiences at Charles Town,” Snowden says, noting the property’s popular boutique hotel, and recent additions of restaurants, an entertainment facility and other amenities.
“We’re really focused on what we can control, which is ensuring customers have a reason to visit us, even after MGM National Harbor opens. The good news is we think this is still a deep and still under-penetrated market. We can all prosper for the long term given the number of casinos and the significant population growth there.”
But perhaps the biggest item on Snowden’s 2016 agenda is consolidating the company’s new position in Las Vegas, where its newly purchased Tropicana will give Penn’s regional customers a spot closer to the heart of the action than the M Resort, the local gem far south on Las Vegas Boulevard which the company recently took over completely from builder and founder Anthony Marnell.
“This was a transformational event for the company,” Snowden says. “You’ve heard us say for many years that it is a strategic priority for Penn National Gaming to find the right casino for the right price in the right location in Las Vegas on the Strip, because we know our 3 million-plus active customers in the regional database visit Las Vegas.
“As beautiful as the M is, and as great as that acquisition has been for us, when people go to Las Vegas, they want to stay on the Strip.”
The key to success for Penn in Las Vegas, says Snowden, will be the operator’s national Marquee Rewards player’s club. “Now, our customers can earn their Marquee Rewards points and comps in their regional markets and those points are portable to Las Vegas when they visit the Tropicana and M resorts,” he says, noting that the company is targeting Marquee club integration for the Trop by mid-year.
If there is any safe bet for 2016 and beyond, according to Snowden, it is that Penn and GLPI will continue to grow, adding new casinos and racetracks (inclusion of racing in properties is “in our DNA,” he says) wherever the opportunity arises.
“We plan to be aggressive, opportunistic and always disciplined; that’s our approach here,” Snowden says. “We’ve been a growth company since the IPO over 20 years ago, and we will remain a growth company.”