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Penn National, one of the largest casino operators in the US, will place nearly 97% of its workforce on unpaid leave beginning Wednesday.
According to a company spokesperson, however, the furlough will not include anyone on the interactive team. Penn Interactive is the group responsible for the Hollywood online casino product.
Also falling under Penn’s interactive division is the team building the company’s in-house sportsbook app, which will feature the Barstool Sports branding.
Penn National bought 36% of Barstool Sports for $163 million in cash and stock earlier this year. That gave the nationally recognized casino brand the sports betting brand it needed to compete with bigger operators.
There’s a team of more than 50 engineers and product developers working on the build-out of the Barstool Sportsbook app with the intention to launch in August. The product will run on Kambi‘s technology.
Of course, that timeline could be delayed because of the coronavirus pandemic. There might not be any reason to launch if major US sports are not back from their suspended seasons by then.
Colorado, Illinois and Michigan are among the states that Penn will target with the app first, said the head of Penn Interactive Jon Kaplowitz.
Per Kaplowitz, Penn will also work the Barstool brand into its mix of online casino products. Those sites will likely focus more on what sports bettors prefer, namely table games and poker.
The first Barstool online casino will launch next year.
One of the unknowns about the COVID-19 outbreak is how long casinos will be closed. But one analyst doesn’t think Penn National has very long to wait it out.
Chad Beynon, of Macquarie, estimates Penn burns $6.4 million a day while its 41 casinos are shuttered across 19 states. That would give the operator just about five months to last through the shutdown based on its balance sheet.
Unpaid furloughs will begin Wednesday for about 26,000 employees. Fewer than 850 workers will stay on as paid staffers during the shutdowns.
Some of Penn’s top executives, including CEO Jay Snowden, CFO David Williams and General Counsel Carl Sottosanti, agreed to significant pay cuts for this year.
The company also sold the real estate of its Tropicana Las Vegas and its mini-casino in Pennsylvania to its REIT partner, Gaming & Leisure Properties, for rent credits.