American regional casino operator Penn National Gaming Incorporated is reportedly set to lay off almost its entire workforce of approximately 26,000 people from tomorrow in an attempt to safeguard its long-term future during the ongoing coronavirus pandemic.
According to a Friday report from the Las Vegas Review-Journal newspaper, the Wyomissing-headquartered firm revealed that it has been paying employee wages since the coronavirus-related shutdown of casinos across the United States began some two weeks ago and intends to honor all associated medical benefits through to the end of June.
Jay Snowden (pictured), President and Chief Executive Officer for Penn National Gaming Incorporated, reportedly told the newspaper that members of his company’s board will be foregoing all compensation from tomorrow while he intends to take an undisclosed ‘meaningful’ pay cut. The 43-year-old also purportedly disclosed that the casino firm is now set to be run with fewer than 850 ‘mission critical’ employees as there is currently no certainty as to the duration or ultimate financial consequences of the coronavirus outbreak.
Snowden reportedly told the Las Vegas Review-Journal…
“As the global coronavirus health crisis continues to evolve, we are navigating through this unprecedented time for our company, our industry and our nation. With all of our 41 properties in 19 states temporarily shuttered, like many others in the gaming and hospitality sector, we are making difficult decisions to help preserve our liquidity and ensure a brighter future for our company’s team members, customers, shareholders and other key stakeholders.”
Penn reportedly explained that it has moreover agreed a deal that is to see its 1,467-room Tropicana Las Vegas venue sold to the recently spun-off Gaming and Leisure Properties Incorporated real estate investment trust (REIT). The Nasdaq-listed firm purportedly pronounced that this arrangement, which furthermore encompasses a new ground lease for a casino being planned for Morgantown, Pennsylvania, is set to bring in some five months of rental credits worth around $337.5 million.
David Katz from financial services firm Jefferies Financial Group Incorporated reportedly told CDC Gaming Reports that Penn National Gaming Incorporated’s annual rent burden had stood at about $900 million but that the new understanding regarding the Las Vegas property should help to decrease this bill and ‘mitigate market concerns.’
Katz reportedly stated…
“The transaction came as little surprise given that management has indicated plans to sell Tropicana Las Vegas over the past year and casino closures across the nation stress the company’s financial metrics. It should alleviate near-term financial pressure.”