Penn Gaming to furlough 26K workers, selling Tropicana real estate
Penn National Gaming, operator of the Tropicana and the M Resort, will furlough its 26,000 employees nationwide beginning Wednesday, the company reported Friday.
The company has 3,200 employees in the state.
Penn also announced that it is selling the real estate assets of the Tropicana and a new ground lease for a planned casino in Morgantown, Pennsylvania, to its real estate spinoff, Gaming & Leisure Properties, for $337.5 million in rent credits.
“As the global COVID-19 health crisis continues to evolve, we are navigating through this unprecedented time for our company, our industry and our nation,” Jay Snowden, president and CEO of Penn National, said in a release.
“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,” he said.
Penn indicated it would continue to pay employees full wages and benefits through Tuesday as previously announced. But because several states have already announced extensions in closure orders, the uncertainty of the duration of the pandemic and no revenue for the foreseeable future led executives to decide to furlough workers, including those at the M Resort and the Tropicana.
Snowden said he would take an undisclosed “meaningful” pay cut, board members are forgoing compensation as of Wednesday and the company will operate with fewer than 850 “mission critical” employees. Medical benefits are being extended through June 30.
Penn National also has established a special COVID-19 emergency relief fund under the Penn National Gaming Foundation to provide assistance to employees and local relief organizations in its communities. The company has raised more than $1.2 million in team member relief funds, including more than $425,000 in personal contributions from Snowden and his senior management team, the company’s board of directors and property general managers.
The company also withdrew its 2020 financial guidance to investors, saying it will provide an update in its scheduled May 7 first-quarter earnings call.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.