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Gaming Guru

Howard Stutz

Penn National chief tries to make light of GSA flap

20 April 2012

LAS VEGAS -- Penn National Gaming Chairman Peter Carlino, whose company owns M Resort, tried to make light Thursday of the controversy surrounding the General Services Administration's taxpayer-funded $823,000 junket to Las Vegas which took place at the Henderson casino.

At the end of Penn National's first quarter earnings call, Carlino was asked by Larry Haverty of Gamco Asset Management firm about the "raft of unplanned advertising" M Resort has received in the past week.

M Resort hosted the GSA training meeting Oct. 25-29, 2010, which has cost government officials their jobs and is the subject of two congressional investigations.

"Look, the GSA thing, as a taxpayer of course it is (an) outrageous situation," Carlino said. "As a business owner, on the other hand, I'm really depressed those guys won't be back next year. Well, (it) looks like they were having fun. (I'm) glad our folks provided them what they were looking for, a first-class experience. I'll leave to others to determine whether taxpayers should be paying for that though."

Penn National didn't own M Resort when the GSA held the taxpayer-funded training meeting. Penn acquired M Resort in June after purchasing the debt covering the 390-room resort at a nearly 75 percent discount.

Penn National said February's opening of a new casino in Kansas and positive results from M Resort, helped the company increase profits and revenues during the first quarter.

The regional casino operator said net income in the quarter that ended March 31 increased 53 percent to $78.6 million, compared to $59.5 million in the same quarter in 2011. The profits translated to 74 cents per share, up from 56 cents per share in the same quarter last year.

Penn National's first quarter revenues increased 10.3 percent to $736.1 million, compared with $682.8 million in 2011.

Carlino said the company benefited from the Feb. 3 opening of the Hollywood Casino at the Kansas Speedway and "a healthy contribution from M Resort."

Financial figures from M Resort are included under the company's east-west division, which includes seven casinos and racetracks. During the quarter, the division reported revenues of $370.6 million, compared with $288.4 million in the same quarter of 2011.
Penn National chief tries to make light of GSA flap is republished from