What changed in this filing

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Item 1. Business

2022-02-28 compared with 2021-02-26 · 177 added, 182 removed, 171 unchanged (68% of the section changed)

Penn National Gaming, Inc., together with its subsidiaries (“Penn National,” the “Company,” “we,” “our,” or “us”), is a leading, diversified, multi-jurisdictional owner and manager of gaming and racing properties, retail and online sports betting operations, and video gaming terminal (“VGT”) operations.

Our wholly-owned interactive division, Penn Interactive Ventures, LLC (“Penn Interactive”), operates retail sports betting across the Company’s portfolio, as well as online sports betting, online social casino, bingo and online casinos (“iGaming”).

In February 2020, the Company acquired 36% (inclusive of 1% on a delayed basis) equity interest in Barstool Sports, Inc.

(“Barstool Sports”), a leading digital sports, entertainment, lifestyle and media company, and entered into a strategic relationship with Barstool Sports, whereby Barstool Sports will exclusively promote the Company's land-based retail sportsbooks, iGaming products and online sports betting products, including the Barstool Sportsbook mobile app, to its national audience.

We launched an online sports betting app called Barstool Sports in Pennsylvania in September 2020 and in Michigan in January 2021.

We also operate iGaming in Pennsylvania and Michigan.

Our MYCHOICE® customer loyalty program (the "mychoice program") currently has over 20 million members and provides such members with various benefits, including complimentary goods and/or services.

The Company’s strategy has continued to evolve from an owner and manager of gaming and racing properties into an omni-channel provider of retail and online gaming, live racing and sports betting entertainment.

We believe our continued evolution into a best-in-class omni-channel provider of retail and online gaming and sports betting entertainment will be a catalyst for our core land-based business, while also providing a platform for significant long-term shareholder value.

References in this Annual Report on Form 10-K, to “Penn National,” the “Company,” “we,” “our,” or “us” refer to Penn National Gaming, Inc.

and its subsidiaries, except where stated or the context otherwise indicates.

As of December 31, 2020, we owned, managed, or had ownership interests in 41 properties in 19 states.

The majority of the real estate assets (i.e., land and buildings) used in the Company’s operations are subject to triple net master leases;

the most significant of which are the Penn Master Lease and the Pinnacle Master Lease (as such terms are defined in the “Triple Net Leases” section below and collectively referred to as the “Master Leases”), with Gaming and Leisure Properties, Inc.

GLPI) (“GLPI”), a real estate investment trust (“REIT”).

In addition, we are currently developing two Category 4 satellite gaming casinos in Pennsylvania:

Hollywood Casino York and Hollywood Casino Morgantown, both of which are expected to commence operations by the end of 2021.

On March 11, 2020, the World Health Organization declared the novel coronavirus (known as “COVID-19”) outbreak to be a global pandemic.

To help combat the spread of COVID-19 and pursuant to various orders from state gaming regulatory bodies or governmental authorities, operations at all of our properties were temporarily suspended for single or multiple time periods during the year.

Once re-opened, properties operated with reduced gaming and hotel capacity and limited food and beverage offerings in order to accommodate social distancing and health and safety protocols.

During the fourth quarter of 2020, our properties temporarily suspended operations in Pennsylvania, Michigan and Illinois and were subject to increased operational restrictions in Ohio and Massachusetts (among other states).

Our Michigan property temporarily closed on November 17, 2020 and reopened on December 23, 2020.

Our Pennsylvania properties temporarily closed on December 12, 2020 and reopened on January 4, 2021.

Our Illinois properties temporarily closed on November 20, 2020 and began reopening with limited hours of operations beginning January 16, 2021 and throughout the week.

The property closures were pursuant to the various orders from state gaming regulatory bodies or governmental authorities to combat the rapid spread of COVID-19.

As of February 26, 2021, all of our properties were open to the public with the exception of Zia Park and Valley Race Park, which remain closed.

The COVID-19 pandemic caused significant disruptions to our business and had a material adverse impact on our financial condition, results of operations and cash flows, the magnitude of which continues to develop.

During the year, substantial measures were taken to improve our financial position and liquidity as discussed in our Consolidated Financial Statements N ote 1, “Organization and Basis of Presentation ” .

In February 2020, we closed on our investment in Barstool Sports pursuant to a stock purchase agreement with Barstool Sports and stockholders of Barstool Sports, in which we purchased approximately 36% of the common stock of Barstool Sports for a purchase price of $161.2 million.

Within three years after the closing or earlier at our election, we will increase our ownership in Barstool Sports to approximately 50% with an incremental investment of approximately $62 million, consistent with the implied valuation at the time of the initial investment.

With respect to the remaining Barstool Sports shares, we have immediately exercisable call rights, and the existing Barstool Sports stockholders have put rights exercisable beginning three

years after closing, all based on a fair market value calculation at the time of exercise (subject to a cap of $650.0 million and a floor of 2.25 times the annualized revenue of Barstool Sports, all subject to various adjustments).

Upon closing, we became Barstool Sports’ exclusive gaming partner for up to 40 years and have the sole right to utilize the Barstool Sports brand for all of our online and retail sports betting and iGaming products.

For additional information, see Note 7, "Investments in and Advances to Unconsolidated Affiliates" .

On December 15, 2020, the Company entered into a definitive agreement with GLPI to purchase the operations of Hollywood Casino Perryville for $31.1 million.

The transaction is expected to close during the second or third quarter of 2021, subject to approval of the Maryland Lottery and Gaming Control Commission and other customary closing conditions.

Simultaneous with the closing of the transaction, we would lease the real estate assets associated with Hollywood Casino Perryville from GLPI with initial annual rent of $7.8 million per year subject to escalation.

For additional information on our acquisitions, see Note 6, “Acquisitions and Dispositions.”

In May 2019, we acquired Greektown Casino-Hotel (“Greektown”) in Detroit, Michigan, subject to a triple net lease with VICI Properties Inc.

VICI) (“VICI”, a REIT and collectively with GLPI, our “REIT Landlords”) (the “Greektown Lease”) and, in January 2019, we acquired Margaritaville Casino Resort (“Margaritaville”) in Bossier City, Louisiana, subject to a triple net lease with VICI (the “Margaritaville Lease” and collectively with the Master Leases, the Greektown Lease, the Meadows Lease, the Tropicana Lease and the Morgantown Lease, of which the Meadows Lease, the Tropicana Lease and Morgantown Lease are defined in the “Triple Net Leases” section below, the “Triple Net Leases”).

In October 2018, the Company completed the acquisition of Pinnacle Entertainment, Inc.

(“Pinnacle”), a leading regional gaming operator (the “Pinnacle Acquisition”).

In connection with the Pinnacle Acquisition, we added 12 gaming properties to our portfolio, providing us with greater operational scale and geographic diversity.

We assumed the Pinnacle Master Lease concurrently with the closing of the Pinnacle Acquisition.

We believe that our portfolio of assets provides us the benefit of geographically-diversified cash flow from operations.

We expect to continue to expand our gaming operations through the implementation and execution of a disciplined capital expenditure program at our existing properties, the pursuit of strategic acquisitions and investments, and the development of new gaming properties.

In addition, the partnership with Barstool Sports reflects our strategy to continue evolving from the nation’s largest regional gaming operator to a best-in-class omni-channel provider of retail and online gaming and sports betting entertainment.

Triple Net Leases

As noted above, the majority of the real estate assets used in the Company’s operations are subject to either the Penn Master Lease or the Pinnacle Master Lease.

In addition to the Penn Master Lease and the Pinnacle Master Lease, five individual gaming facilities used in our operations are subject to individual triple net leases.

Under triple net leases, in addition to lease payments for the real estate assets, the Company is required to pay the following, among other things:

(1) all facility maintenance;

(2) all insurance required in connection with the leased properties and the business conducted on the leased properties;

(3) taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor);

(4) all tenant capital improvements;

and (5) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.

The following summaries of the Master Leases are qualified in their entirety by reference to either the Penn Master Lease or the Pinnacle Master Lease, as applicable, all of which are incorporated by reference in the exhibits to this Annual Report on Form 10-K.

Penn Master Lease

Pursuant to a triple net master lease with GLPI (the “Penn Master Lease”), which became effective November 1, 2013, the Company leases real estate assets associated with 19 of the gaming facilities used in its operations.

The Penn Master Lease has an initial term of 15 years with four subsequent, five-year renewal periods on the same terms and conditions, exercisable at the Company’s option.

If we elect to renew the term of the Penn Master Lease, the renewal will be effective as to all of the leased real estate assets then subject to the Penn Master Lease, subject to limitations on the final renewal term with respect to certain of the barge-based facilities.

Pinnacle Master Lease

In connection with the Pinnacle Acquisition, the Company assumed a triple net master lease with GLPI (“Pinnacle Master Lease”), originally effective April 28, 2016.

Pursuant to the Pinnacle Master Lease, the Company leases real estate assets associated with 12 of the gaming facilities used in its operations from GLPI.

Upon assumption of the Pinnacle Master Lease, as

amended, there were 7.5 years remaining of the initial ten-year term, with five subsequent, five-year renewal periods exercisable at the Company’s option.

Furthermore, in conjunction with the Pinnacle Acquisition, GLPI acquired the real estate assets associated with Plainridge Park Casino and leased back such assets to the Company pursuant to an amendment to the Pinnacle Master Lease.

Morgantown Lease

On October 1, 2020, we sold the land underlying our Morgantown development project to GLPI in exchange for rent credits of $30.0 million.

Contemporaneous with the sale, the Company entered into a triple net lease with a subsidiary of GLPI for the land underlying Morgantown (“Morgantown Lease”).

The initial term of the Morgantown Lease is twenty years with six subsequent, five-year renewal periods, exercisable at the Company’s option.

Meadows Lease, Margaritaville Lease, Greektown Lease and Tropicana Lease

In connection with the Pinnacle Acquisition, the Company assumed a triple net lease of the real estate assets used in the operations of Meadows Racetrack and Casino (the “Meadows Lease”), originally effective September 9, 2016, with GLPI as the landlord.

Upon assumption of the Meadows Lease, there were eight years remaining of the initial ten-year term, with three subsequent, five-year renewal options followed by one four-year renewal option on the same terms and conditions, exercisable at the Company’s option.

As discussed above, in separate acquisitions, the Company entered into the Margaritaville Lease with VICI for the real estate assets used in the operations of Margaritaville and the Greektown Lease with VICI for the real estate assets used in the operations of Greektown.

Both the Margaritaville Lease and the Greektown Lease have initial terms of 15 years, with four subsequent five-year renewal options on the same terms and conditions, exercisable at the Company’s option.

On April 16, 2020, we sold the real estate assets associated with our Tropicana Las Vegas ("Tropicana") property to a subsidiary of GLPI in exchange for rent credits of $307.5 million.

Contemporaneous with the sale, the Company entered into a leaseback of the real estate assets for nominal cash rent.

We are required to continue to operate the Tropicana for two years (subject to three one-year extensions at GLPI’s option) or until the real estate assets and the operations of the Tropicana are earlier sold by GLPI.

With a gaming footprint that includes 44 properties across 20 states as of December 31, 2021, Penn National is a highly innovative omni-channel provider of retail casino gaming, online gaming, live racing, sports betting, and digital sports content.

Our wholly-owned interactive division, Penn Interactive Ventures, LLC (“Penn Interactive”), operates retail sports betting in the Company’s retail properties, as well as online sports betting and online social casino, bingo, and iCasino products (collectively, “iGaming”).

In October 2021, we acquired Score Media and Gaming, Inc.

(“theScore”), a sports betting and digital media company.

In addition, in February 2020, we entered a strategic partnership with Barstool Sports, Inc.

(“Barstool Sports”), a leading digital sports, entertainment, lifestyle and media company.

Combined with the power of theScore and Barstool Sports, Penn National has evolved into a leading North American digital sports content, gaming and technology company.

The Company’s omni-channel approach is further bolstered by its my choice customer loyalty program (the “my choice program”), which rewards and recognizes its over 25 million members for their loyalty to both retail and online gaming and sports betting products with a dynamic set of industry offers, experiences, and service levels.

Reportable Segments

We have five reportable segments:

Northeast, South, West, Midwest, and Interactive.

Our retail gaming and racing properties are grouped into reportable segments by geographic region and each property is viewed as an operating segment except for our two properties in Jackpot, Nevada, which are viewed as one operating segment.

We also consider our combined Video Gaming Terminal (“VGT”) operations, by state, to be separate operating segments.

Interactive includes the operations of Penn Interactive, theScore, and our proportionate share of earnings attributable to Barstool Sports.

See Note 18, “Segment Information,” for further information.

Retail Operations

As of December 31, 2021 we owned, managed, or had ownership interests in 44 gaming and racing properties in 20 states.

This includes the addition of Hollywood Casino Perryville, located in Perryville, Maryland, which was acquired on July 1, 2021, Hollywood Casino York, located in York, Pennsylvania, which opened on August 12, 2021 and Hollywood Casino Morgantown, located in Morgantown, Pennsylvania, which opened on December 22, 2021.

In addition, we are licensed to offer live sports betting at our properties in eleven states.

Operating Properties

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Northeast segment

Ameristar East Chicago East Chicago, IN Pinnacle Master Lease Dockside gaming 73,000 1,796 75 288

Greektown Casino-Hotel Detroit, MI Greektown Lease Land-based gaming 100,000 2,362 62 400

Ameristar East Chicago (2)

East Chicago, IN Pinnacle Master Lease Dockside gaming 58,566 1,273 46 288

Greektown Casino-Hotel (2)

Detroit, MI Greektown Lease Land-based gaming 100,000 2,155 64 400

Hollywood Casino Bangor Bangor, ME Penn Master Lease Land-based gaming/racing 31,750 654 14 152

Hollywood Casino at Charles Town Races Charles Town, WV Penn Master Lease Land-based gaming/racing 115,000 2,292 74 153

Hollywood Casino at Charles Town Races (2)

Charles Town, WV Penn Master Lease Land-based gaming/racing 115,000 1,904 66 153

Hollywood Casino Columbus Columbus, OH Penn Master Lease Land-based gaming 179,000 1,761 65 —

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Lawrenceburg, IN Penn Master Lease Dockside gaming 149,500 1,349 60 463

Hollywood Casino at Penn National Race Course Grantville, PA Penn Master Lease Land-based gaming/racing 99,500 1,962 80 —

Hollywood Casino Morgantown (2)

Morgantown, PA Morgantown Lease Land-based gaming 81,000 750 30 —

Hollywood Casino at Penn National Race Course (2)

Grantville, PA Penn Master Lease Land-based gaming/racing 99,500 1,550 56 —

Hollywood Casino Perryville (2)

Perryville, MD Perryville Lease Land-based gaming 34,500 766 13 —

Hollywood Casino Toledo Toledo, OH Penn Master Lease Land-based gaming 125,000 1,683 47 —

Hollywood Casino York (2)

York, PA Operating Lease (not with REIT Landlord) Land-based gaming 80,000 500 25 —

Hollywood Gaming at Dayton Raceway Dayton, OH Penn Master Lease Land-based gaming/racing 40,600 964 — —

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Pennsylvania N/A Land-based gaming N/A 125 — —

Meadows Racetrack and Casino Washington, PA Meadows Lease Land-based gaming/racing 125,000 2,463 95 —

Hollywood Casino at the Meadows (2)

Washington, PA Meadows Lease Land-based gaming/racing 125,000 2,047 96 —

Plainridge Park Casino Plainville, MA Pinnacle Master Lease Land-based gaming/racing 50,000 963 — —

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Tunica, MS Penn Master Lease Dockside gaming 40,000 827 16 —

Ameristar Vicksburg Vicksburg, MS Pinnacle Master Lease Dockside gaming 70,000 1,102 24 148

Boomtown Biloxi Biloxi, MS Penn Master Lease Dockside gaming 35,500 605 20 —

Boomtown Bossier City Bossier City, LA Pinnacle Master Lease Dockside gaming 30,000 806 16 187

Boomtown New Orleans New Orleans, LA Pinnacle Master Lease Dockside gaming 30,000 1,132 31 150

Hollywood Casino Gulf Coast Bay St.

Ameristar Vicksburg (2)

Vicksburg, MS Pinnacle Master Lease Dockside gaming 70,000 1,058 23 148

Boomtown Biloxi (2)

Biloxi, MS Penn Master Lease Dockside gaming 35,500 597 22 —

Boomtown Bossier City (2)

Bossier City, LA Pinnacle Master Lease Dockside gaming 30,000 751 12 187

Boomtown New Orleans (2)

New Orleans, LA Pinnacle Master Lease Dockside gaming 30,000 1,024 26 150

Hollywood Casino Gulf Coast (2)

Louis, MS Penn Master Lease Land-based gaming 51,000 800 20 291

Hollywood Casino Tunica Tunica, MS Penn Master Lease Dockside gaming 54,000 900 10 494

L’Auberge Baton Rouge Baton Rouge, LA Pinnacle Master Lease Dockside gaming 71,500 1,305 49 205

L’Auberge Lake Charles Lake Charles, LA Pinnacle Master Lease Dockside gaming 70,000 1,469 85 995

Margaritaville Resort Casino Bossier City, LA Margaritaville Lease Dockside gaming 30,000 1,109 50 395

Ameristar Black Hawk Black Hawk, CO Pinnacle Master Lease Land-based gaming 56,000 1,050 38 536

Hollywood Casino Tunica (2)

Tunica, MS Penn Master Lease Dockside gaming 54,000 895 11 494

L’Auberge Baton Rouge (2)

Baton Rouge, LA Pinnacle Master Lease Dockside gaming 71,500 1,209 46 205

L’Auberge Lake Charles (2)

Lake Charles, LA Pinnacle Master Lease Dockside gaming 71,200 1,404 85 995

Margaritaville Resort Casino (2)

Bossier City, LA Margaritaville Lease Dockside gaming 30,000 986 50 395

Ameristar Black Hawk (2)

Black Hawk, CO Pinnacle Master Lease Land-based gaming 56,000 1,050 38 536

Cactus Petes and Horseshu Jackpot, NV Pinnacle Master Lease Land-based gaming 29,000 688 14 416

M Resort Henderson, NV Penn Master Lease Land-based gaming 96,000 1,073 40 390

Tropicana Las Vegas Las Vegas, NV Tropicana Lease Land-based gaming 72,000 632 20 1,470

Henderson, NV Penn Master Lease Land-based gaming 96,000 1,048 40 390

Tropicana Las Vegas Hotel and Casino (2)

Las Vegas, NV Tropicana Lease Land-based gaming 72,000 631 33 1,470

Zia Park Casino Hobbs, NM Penn Master Lease Land-based gaming/racing 18,000 753 — 154

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Argosy Casino Riverside Riverside, MO Penn Master Lease Dockside gaming 56,000 1,104 42 258

Hollywood Casino Aurora Aurora, IL Penn Master Lease Dockside gaming 53,000 976 27 —

Hollywood Casino Joliet Joliet, IL Penn Master Lease Dockside gaming 50,000 1,100 26 100

Hollywood Casino Aurora (2)

Aurora, IL Penn Master Lease Dockside gaming 53,000 976 27 —

Hollywood Casino Joliet (2)

Joliet, IL Penn Master Lease Dockside gaming 50,000 995 26 100

Hollywood Casino at Kansas Speedway (7)

Kansas City, KS Owned - JV Land-based gaming 95,000 2,000 41 —

Kansas City, KS Owned - joint venture Land-based gaming 95,000 1,530 20 —

Hollywood Casino St.

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Freehold Raceway (8)

Freehold, NJ Owned - JV Standardbred racing — — — —

Freehold, NJ Owned - joint venture Standardbred racing — — — —

Retama Park Racetrack (9)

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Sam Houston Race Park (10)

Houston, TX Owned - JV Thoroughbred racing — — — —

Houston, TX Owned Thoroughbred racing — — — —

Sanford-Orlando Kennel Club (11)

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Valley Race Park (10)(12)

Harlingen, TX Owned - JV Greyhound racing — — — —

Harlingen, TX Owned Greyhound racing — — — —

2,595,616 45,927 1,276 8,791

(1) Excludes poker tables.

(2) We expect that Hollywood Casino York and Hollywood Casino Morgantown will be included within our Northeast segment.

(2) Property offers a sportsbook for live sports betting.

(3) Includes 168 rooms at our hotel and event center located less than a mile from the gaming facility.

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(9) Pursuant to a management contract with Retama Development Corporation.

(10) Pursuant to a joint venture with MAXXAM, Inc.

(10) Previously pursuant to a joint venture with MAXXAM, Inc.

the remaining 50% was acquired by Penn National on August 1, 2021.

(11) In the fourth quarter of 2020, we sold the land underlying the Sanford-Orlando Kennel Club racetrack which discontinued our live racing operations.

We continue to operate our simulcast racing business.

(12) In March, 2020 Valley Race Park closed due to COVID-19 and remains non-operational.

Northeast Segment

Ameristar East Chicago is located less than 25 miles from downtown Chicago, Illinois and offers guests a gaming and entertainment experience in the Chicago metropolitan area.

In addition to gaming amenities, the property features a full-service hotel, a sportsbook for live sports betting, a fitness center, dining venues, lounges and 5,400 square feet of meeting and event space.

In addition to gaming amenities, the property features a full-service hotel, a Barstool Sportsbook for live sports betting, a fitness center, dining venues, and a lounge.

Greektown Casino-Hotel is located in the Greektown district of Detroit, Michigan, and is one of four casino hotels in the Detroit-Windsor area.

In addition to slot machines, table games, poker tables and a sportsbook for live sports betting, the property features a 30-story hotel, several food and beverage options from casual to fine dining, as well as 10,000 square feet of convention and banquet space.

In addition to slot machines, table games, poker tables and a Barstool Sportsbook for live sports betting, the property features a 30-story hotel, several food and beverage options from casual to fine dining, as well as 10,000 square feet of convention and banquet space.

Hollywood Casino Bangor is located less than five miles from the Bangor airport in Maine.

It features slot machines, table games and poker tables, as well as a hotel with 5,100 square feet of meeting and multipurpose space;

It features slot machines, table games, a hotel with 5,100 square feet of meeting and multipurpose space;

and dining and entertainment options.

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Hollywood Casino at Charles Town Races is located within approximately an hour drive of the Baltimore, Maryland and Washington, D.C.

In addition to slot machines, table games and poker tables, the property includes a sportsbook for live sports betting, as well as a variety of dining options.

In addition to a hotel, slot machines, table games and poker tables, the property includes a Barstool Sportsbook for live sports betting, as well as a variety of dining options.

The complex also features live thoroughbred racing at a 3/4-mile all-weather lighted thoroughbred racetrack with a 3,000-seat grandstand and simulcast wagering.

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Hollywood Casino Lawrenceburg is a Hollywood-themed casino riverboat located along the Ohio River in Lawrenceburg, Indiana, approximately 15 miles west of Cincinnati, Ohio.

In addition to slot machines, table games, and poker tables, the riverboat features a sportsbook for live sports betting, as well as a variety of dining options.

In addition to slot machines, table games, and poker tables, the riverboat features a Barstool Sportsbook for live sports betting, as well as a variety of dining options.

The hotel and event center, located within one mile from the casino, includes 18,000 square feet of multipurpose space and 19,500 square feet of ballroom and meeting space.

Hollywood Casino Morgantown is located less than an hour drive west of Philadelphia, Pennsylvania.

The property features an outdoor gaming and entertainment area, a Barstool Sportsbook for live sports betting, slot machines, table games, and multiple food and beverage outlets.

Hollywood Casino at Penn National Race Course is located 15 miles northeast of Harrisburg, Pennsylvania.

This gaming facility also includes a variety of dining and entertainment options, as well as sports betting and a viewing area for live racing.

This gaming facility also includes a variety of dining and entertainment options, as well as a sportsbook for live sports betting and a viewing area for live racing.

The property includes a one-mile all-weather lighted thoroughbred racetrack and a 7/8-mile turf track.

Hollywood Casino Perryville is a Hollywood-themed casino located near the Susquehanna River in Perryville, Maryland, approximately 45 miles east of Baltimore, Maryland.

It features slot machines, table games and poker tables, and a sportsbook for live sports betting, as well as a variety of dining options.

Hollywood Casino Toledo is a Hollywood-themed casino, located on the bank of the Maumee River, in Toledo, Ohio.

The property features slot machines, table games and poker tables, as well as multiple food and beverage outlets and an entertainment lounge.

Hollywood Casino York is a casino located within the York Galleria Mall, approximately an hour drive north of Baltimore, Maryland.

It features slot machines, table games, and a Barstool Sportsbook for live sports betting, as well as casual dining options.

Hollywood Gaming at Dayton Raceway is a Hollywood-themed casino and raceway located in Dayton, Ohio.

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Marquee by Penn is our licensed VGT route operator with a network of 23 truck stop establishments in Pennsylvania.

Meadows Racetrack and Casino is located in Washington, Pennsylvania, approximately 25 miles south of Pittsburgh, Pennsylvania.

In addition to gaming amenities, the property offers a sportsbook for live sports betting, several dining options, as well as an event and banquet center, a simulcast betting parlor, a harness racetrack and a bowling alley.

Hollywood Casino at the Meadows is located in Washington, Pennsylvania, approximately 25 miles south of Pittsburgh, Pennsylvania.

Plainridge Park Casino is located 20 miles southwest of the Boston beltway just off interstate 95 in Plainville, Massachusetts.

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1 st Jackpot Casino is the closest Tunica-area casino to downtown Memphis, Tennessee.

It features slot machines, table games, a café, a sportsbook and a live entertainment venue.

It features slot machines, table games, a café, a sportsbook for live betting and a live entertainment venue.

Ameristar Vicksburg, which is the largest dockside casino in central Mississippi, is located along the Mississippi River approximately 45 miles west of Mississippi’s largest city, Jackson.

In addition to gaming amenities, the property features a hotel, multiple dining and bar facilities, an 1,800 square feet of meeting and event space, a sports book and an RV park.

Boomtown Biloxi, located in Biloxi Mississippi, offers slot machines and table games, and a sportsbook for live sports betting, as well as a variety of dining options.

In addition to gaming amenities, the property features a hotel, multiple dining and bar facilities, 1,800 square feet of meeting and event space, a sportsbook for live sports betting and an RV park.

Boomtown Biloxi, located in Biloxi Mississippi, offers slot machines, table games, poker tables and a sportsbook for live sports betting, as well as two distinct dining options.

The property also includes a recreational vehicle park, and a 3,600 square foot event center and board room.

Boomtown Bossier City features a hotel adjoining a dockside riverboat casino located less than one mile from the Louisiana Boardwalk.

It also offers several dining options, ranging from a high-end steakhouse to casual dining restaurants, and 1,500 square feet of meeting and conference space.

The property offers a sportsbook for live sports betting, a variety of dining options from a high-end steakhouse to casual dining restaurants, and 1,500 square feet of meeting and conference space.

Boomtown New Orleans is located in the West Bank area across the Mississippi River and approximately 15 minutes from the French Quarter of New Orleans, Louisiana.

In addition to gaming amenities, it also features a five-story hotel, a fitness center, several restaurants, a 500-seat entertainment venue, and over 14,000 square feet of meeting and conference space.

In addition to gaming amenities and a sportsbook for live sports betting, the property also features a five-story hotel, a fitness center, several restaurants, a 500-seat entertainment venue, and over 14,000 square feet of meeting and conference space.

Hollywood Casino Gulf Coast is located in Bay St.

Louis, Mississippi and features slot machines, table games, and a sportsbook for live sports betting.

Louis, Mississippi and features slot machines, table games, poker tables and a sportsbook for live sports betting.

The property also features a golf course, various dining options, and an RV park amongst other amenities.

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L’Auberge Baton Rouge is located approximately ten miles southeast of downtown Baton Rouge, Louisiana.

In addition to gaming options, the property features a 12-story hotel, a variety of dining choices, and 13,000 square feet of meeting and event space.

The property features a 12-story hotel, slots, table games, poker, a sportsbook for live sports betting, a variety of dining choices, and 13,000 square feet of meeting and event space.

L’Auberge Lake Charles offers one of the closest full-scale casino hotel facilities to Houston, Texas, as well as to the Austin, Texas and San Antonio, Texas metropolitan areas.

The location is approximately 140 miles from Houston and approximately 300 miles and 335 miles from Austin and San Antonio, respectively.

In addition to gaming amenities, the property features several dining outlets, a golf course, a full-service spa, and more than 26,000 square feet of meeting and event space.

In addition to gaming amenities and a sportsbook for live sports betting, the property features several dining outlets, a golf course, a full-service spa, and more than 26,000 square feet of meeting and event space.

Margaritaville Resort Casino is one of the premier gaming, lodging, dining and entertainment experiences in Northern Louisiana.

The property provides an island-style theme and includes a 15,000 square foot 1,000-seat theater, and 9,500 square feet of meeting space.

The property provides an island-style theme and includes gaming amenities, a sportsbook for live sports betting, a 15,000 square foot 1,000-seat theater, and 9,500 square feet of meeting space.

Ameristar Black Hawk is located in the center of the Black Hawk gaming district, approximately 40 miles west of Denver, Colorado.

The resort features slot machines, table games and a Barstool Sportsbook for live sports betting.

In addition to gaming amenities, the resort features a hotel, a full-service day spa, several dining outlets, a live entertainment bar, and 15,000 square feet of meeting and event space.

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The property also includes entertainment venues, over 100,000 square feet of exhibition and meeting space, and a five-acre tropical beach event area and spa.

Zia Park Casino is located in Hobbs, New Mexico, and features slot machines, a hotel, restaurants, a one-mile quarter/thoroughbred racetrack with live racing from September to December, and a year-round simulcast parlor.

Zia Park Casino is located in Hobbs, New Mexico, and features slot machines, a hotel, restaurants, a one-mile quarter horse/thoroughbred racetrack with live racing from September to December, and a year-round simulcast parlor.

Midwest Segment

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The complex includes a barge-based casino which provides guests with two levels of gaming experience, as well as a land-based pavilion with several dining and entertainment options.

In addition, the property includes a sportsbook for live betting, a hotel, 4,600 square feet of meeting space, and an 80-space RV park.

In addition, the property includes a sportsbook for live sports betting, a hotel, 4,600 square feet of meeting space, and an 80-space RV park.

Hollywood Casino at Kansas Speedway , our 50% joint venture with NASCAR, is located in Kansas City, Kansas.

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River City Casino features a hotel, multiple dining outlets, an entertainment lounge, and over 10,000 square feet of conference space.

Interactive Operations

Penn Interactive.

Penn Interactive is our interactive gaming division that operates our online sports betting and casino app called Barstool Sportsbook and Casino, which is currently live in twelve states, four of which also offer online casino gaming.

In addition, Penn Interactive operates retail sportsbooks across the Company’s portfolio, including 24 internally-branded or Barstool-branded retail sportsbooks located at the Company’s properties in Colorado, Illinois, Indiana, Iowa, Louisiana, Maryland, Michigan, Mississippi, Pennsylvania and West Virginia.

Further, Penn Interactive has entered into multi-year agreements with leading sports betting operators for online sports betting and iCasino market access across our portfolio of properties.

Pursuant to these agreements, such sports betting and iCasino operators have commenced operations in Indiana, Louisiana, Pennsylvania, and West Virginia.

Penn Interactive also creates interactive casino content through its in-house

content development arm, Penn Game Studios.

Penn Game Studios recently launched Barstool Blackjack and Barstool Slots on the Barstool Casino.

Penn Interactive also operates multiple additional iGaming platforms across its portfolio.

On October 19, 2021, we completed the acquisition of theScore for a purchase price of approximately $ 2.1 billion.

theScore’s media app delivers users highly-personalized live scores, news, stats, and betting information from their favorite teams, leagues, and players.

ScoreBet, theScore’s sports betting app delivers an immersive and holistic mobile sports betting experience and is currently available to place wagers in New Jersey, Colorado, Indiana and Iowa and is preparing to launch in Ontario.

The acquisition provides us with the technology, resources and audience reach to accelerate our media and sports betting strategy across North America.

For additional information on our acquisitions, see Note 6, “Acquisitions and Dispositions.”

Penn Interactive, through its wholly-owned subsidiary, holds a 36 % (inclusive of 1% on a delayed basis) equity interest in Barstool Sports, and entered into a strategic relationship with Barstool Sports, whereby Barstool Sports exclusively promotes the Company’s retail gaming and racing properties, online casinos and sports betting products, including the Barstool Sportsbook and Casino mobile app, to its national audience, and we have the sole right to utilize the Barstool Sports brand for all of our online and retail sports betting and iGaming products.

As of February 28, 2022 we have launched the Barstool Sportsbook and Casino app in twelve states, four of which also offer iCasino products.

Freehold Raceway.

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Sam Houston Race Park and Valley Race Park.

Our joint venture with MAXXAM owns and operates Sam Houston Race Park and Valley Race Park, and holds a license for a racetrack in Manor, Texas, just outside of Austin.

Sam Houston Race Park, which is located 15 miles northwest from downtown Houston along Beltway 8, hosts thoroughbred and quarter horse racing and offers daily simulcast operations, as well as hosts various special events, private parties and meetings, concerts and national touring festivals throughout the year.

Valley Race Park features 91,000 of property square footage as a dog racing and simulcasting facility.

Valley Race Park is a 91,000 square foot property that previously conducted greyhound racing and simulcasting.

Valley Race Park has not been opened since March 2020.

We acquired the remaining 50% of these properties, as well as a license for a racetrack in Manor, Texas, just outside of Austin, on August 1, 2021.

Sanford-Orlando Kennel Club.

The greyhound racetrack and related facility was sold to a land developer during the fourth quarter of 2020.

The remaining facility owned by the Company is used to operate a restaurant and to offer year-round simulcast racing operations.

Penn Interactive

Penn Interactive is our interactive gaming division that operates our online sports betting app called Barstool Sportsbook as well as our iGaming platforms, which are currently live in Pennsylvania and Michigan.

Penn Interactive includes the operations of Absolute Games, LLC, a developer and operator of online social bingo and other casino games.

In addition, Penn Interactive has entered into multi-year agreements with leading sports betting operators for online sports betting and iGaming market access across our portfolio of properties.

Pursuant to these agreements, such sports betting operators have commenced operations in Indiana, Pennsylvania and West Virginia.

Penn Interactive also operates 16 internally-branded or Barstool-branded retail sportsbooks located at the Company's properties in Colorado, Illinois, Indiana, Iowa, Michigan, Mississippi, Pennsylvania and West Virginia.

The former greyhound racetrack and related property was sold to a land developer during the fourth quarter of 2020.

The remaining facility and parking lot area is owned by the Company and used to operate a restaurant and offers year-round simulcast operations.

Triple Net Leases

The majority of the real estate assets (i.e., land and buildings) used in our operations are subject to triple net master leases;

GLPI) (“GLPI”), a real estate investment trust (“REIT”).

In addition to the Penn Master Lease and the Pinnacle Master Lease, six individual gaming facilities used in our operations are subject to individual triple net leases.

Under triple net leases, in addition to lease payments for the real estate assets, the Company is required to pay the following, among other things:

(i) all facility maintenance;

(ii) all insurance required in connection with the leased properties and the business conducted on the leased properties;

(iii) taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor);

(iv) all tenant capital improvements;

and (v) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.

Penn Master Lease

The Penn Master Lease has an initial term of 15 years with four subsequent, five-year renewal periods on the same terms and conditions, exercisable at the Company’s option.

Pinnacle Master Lease

In connection with the acquisition of Pinnacle Entertainment, Inc.

in 2018 (the “Pinnacle Acquisition”), the Company assumed a triple net master lease with GLPI (“Pinnacle Master Lease”), originally effective April 28, 2016.

Pursuant to the Pinnacle Master Lease, the Company leases real estate assets associated with 12 of the gaming facilities used in its operations from GLPI.

Upon assumption of the Pinnacle Master Lease, as amended, there were 7.5 years remaining of the initial ten-year term, with five subsequent, five-year renewal periods exercisable at the Company’s option.

Morgantown Lease

On October 1, 2020, we sold the land underlying our Morgantown development project to GLPI in exchange for rent credits of $30.0 million.

Contemporaneous with the sale, the Company entered into a triple net lease with a subsidiary of GLPI for the land underlying Morgantown (“Morgantown Lease”).

The initial term of the Morgantown Lease is twenty years with six subsequent, five-year renewal periods, exercisable at the Company’s option.

Perryville Lease

In conjunction with the acquisition of the operations of Hollywood Casino Perryville on July 1, 2021, the Company entered into a triple net lease with GLPI for the real estate assets associated with the property (“Perryville Lease”).

The initial term of the Perryville Lease is twenty years with three subsequent, five-year renewal periods, exercisable at the Company’s option.

Meadows Lease

In connection with the Pinnacle Acquisition, the Company assumed a triple net lease of the real estate assets used in the operations of Hollywood Casino at Meadows Racetrack (the “Meadows Lease”), originally effective September 9, 2016, with GLPI as the landlord.

Margaritaville Lease and Greektown Lease

In connection with the acquisition of the operations of Margaritaville on January 1, 2019, the Company entered into the Margaritaville Lease with VICI Properties, Inc.

(“VICI”) for the real estate assets used in the operations of Margaritaville Resort Casino.

In connection with the acquisition of the membership interests in Greektown Holdings, LLC on May 23, 2019, the Company entered into the Greektown Lease with VICI for the real estate assets used in the operations of Greektown Casino-Hotel.

Tropicana Lease

On April 16, 2020, we sold the real estate assets associated with the operations of Tropicana Las Vegas Hotel and Casino, Inc.

(“Tropicana”) property to a subsidiary of GLPI in exchange for rent credits of $307.5 million.

Contemporaneous with the sale, the Company entered into a leaseback of the real estate assets for nominal cash rent.

On January 11, 2022, Penn National entered into a definitive purchase agreement to sell its outstanding equity interest in Tropicana, which has the gaming license and operates the Tropicana, to Bally’s Corporation (“Bally’s”).

This transaction is expected to close within the second half of 2022, subject to Penn National, GLPI, and Bally’s entering into definitive agreements and obtaining regulatory approval.

We own a number of trademarks and service marks registered with the U.S.

Patent and Trademark Office (“USPTO”), including but not limited to, “Ameristar®,” “Argosy®,” “Boomtown®,” “Greektown®,” “Hollywood Casino®,” “Hollywood Gaming®,” “L’Auberge®,” “M Resort®,” and “MYCHOICE®,” among other trademarks.

Patent and Trademark Office (“USPTO”), including but not limited to, “Ameristar ® ,” “Argosy ® ,” “Boomtown ® ,” “Greektown ® ,” “Hollywood Casino ® ,” “Hollywood Gaming ® ,” “L’Auberge ® ,” “M Resort ® ,” “Tropicana Las Vegas,” and “My Choice ® ” (“my choice ”) among other trademarks.

We believe that our rights to our trademarks are well-established and have competitive value to our properties.

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Among others, we have a licensing agreement with a third-party to use the “Margaritaville ® ” trademark in connection with the operations of Margaritaville in Bossier City, Louisiana.

Upon closing of the transaction with Barstool Sports in February 2020, we have the sole right to utilize the Barstool Sports ® brand for all of our online and retail sports betting and iGaming products.

In addition, subject to certain terms, conditions, and limitations, we have the exclusive right to use the “Tropicana Las Vegas ® ” and certain other trademarks within 50 miles of our Tropicana Las Vegas property.

The gaming industry is characterized by an increasingly high degree of competition among a large number of participants operating from physical locations and/or through online or mobile platforms, and other forms of gaming in the U.S.

In a broader sense, our gaming operations face competition from all manner of leisure and entertainment activities, including shopping, athletic events, television and movies, concerts and travel.

Upon closing of the transaction with Barstool Sports in February 2020, we have the sole right to utilize the Barstool Sports ® brand for all our online and retail sports betting and iGaming products.

The gaming, media and entertainment industries are characterized by an increasingly high degree of competition among a large number of participants.

In a broad sense, both our land-based and interactive gaming operations face competition from all manner of leisure and entertainment activities, including shopping, athletic events, television and movies, concerts and travel.

Legalized gaming is currently permitted in various forms throughout the U.S.

and on various lands taken into trust for the benefit of certain Native Americans and as well as various land taken into trust for the benefit of certain First Nations people in Canada.

Other jurisdictions, including states adjacent to states in which we currently have properties, have recently legalized, implemented and expanded gaming.

In addition, established gaming jurisdictions could award additional gaming licenses or permit the expansion or relocation of existing gaming operations (including VGTs, skill games, sports betting and iGaming).

Other jurisdictions, including states adjacent to those in which we currently have properties, have recently legalized, implemented and expanded gaming.

Competition is discussed in further detail within “Item 1A.

Factors,” of this Annual Report on Form 10-K and a discussion of the impact of competition on our results of operations, and cash flows is included within “Item 7.

Risk Factors,” of this Annual Report on Form 10-K and a discussion of the impact of competition on our results of operations, and cash flows is included within “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of this Annual Report on Form 10-K.

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For a more detailed description of the statutes and regulations to which we are subject, see Exhibit 99.1, “Description of Government Regulations,” to this Annual Report on Form 10-K, which is incorporated herein by reference.

Our businesses are subject to various federal, state and local laws and regulations in addition to gaming regulations.

Our businesses are subject to various international, federal, state and local laws and regulations in addition to gaming regulations.

These laws and regulations include, but are not limited to, restrictions and conditions concerning alcoholic beverages, environmental matters, employees, health care, currency transactions, taxation, zoning and building codes, and marketing and advertising.

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Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our financial condition, results of operations and cash flows.

Information about our Executive Officers

As of February 26, 2021, the persons serving as our executive officers and their positions with us are as follows:

NAME AGE POSITION WITH THE COMPANY

Jay Snowden 44 President, Chief Executive Officer and Director

Todd George 51 Executive Vice President, Operations

Harper Ko 47 Executive Vice President, Chief Legal Officer and Secretary

In August 2019, the Company’s Board of Directors elected Mr.

Snowden as a Board member.

Effective January 1, 2020, Mr.

Snowden became the Company’s Chief Executive Officer.

Snowden joined the Company in October 2011 as Senior Vice President-Regional Operations and was promoted to Chief Operating Officer in January 2014.

In March 2017, Mr.

Snowden was named President and Chief Operating Officer and was responsible for overseeing all of our operating businesses, as well as human resources, marketing, and information technology.

Prior to joining the Company, Mr.

Snowden was the Senior Vice President and General Manager of Caesars and Harrah’s in Atlantic City, New Jersey, and prior to that, held various leadership positions with them in St.

Louis, Missouri, San Diego, California and Las Vegas, Nevada.

George has served as our Executive Vice President, Operations since January 2020.

George joined us in October 2012 as Vice President and General Manager of Hollywood Casino in Lawrenceburg, Indiana, transitioning to the role of Vice President and General Manager of Hollywood Casino St.

Louis in 2014.

In 2017, he was promoted to his previous role as Senior Vice President, Regional Operations, overseeing nine properties in the Company’s Midwest Region.

Prior to joining Penn National, Mr.

George spent 12 years in various management positions at Pinnacle Entertainment Inc., including leading the development and launch of Pinnacle’s two St.

Louis, Missouri properties.

Ko was appointed as the Company’s Executive Vice President, Chief Legal Officer and Secretary on January 1, 2021.

Prior to joining Penn, Ms.

Ko was the Executive Vice President, Chief Legal Officer – General Counsel and Secretary of Everi Holdings, Inc., a full-service casino gaming equipment and payment solutions provider from 2017 until December 2020.

Prior to joining Everi, Ms.

Ko served as Deputy General Counsel, Gaming for Scientific Games Corporation.

During her time there from November 2014 to December 2017, Ms.

Ko led the legal integration of Bally Gaming, Inc., SHFL entertainment Inc., and WMS Gaming Inc.

into the Scientific Games Gaming division and served as a strategic advisor to their Gaming unit executive management team on all material commercial transactions, customer and third-party issues, and regulatory compliance and litigation matters.

Employees and Human Capital Resources

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and invest in technology and resources to provide our team members with the most efficient tools to perform their jobs.

Some of the key programs and initiatives developed to attract and retain high quality talent include:

Some of the key programs and initiatives developed to attract, retain and develop diverse and high quality talent include:

• Executive and High Potential Talent Review Process

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• AwardCo Recognition Program and Property Engagement Committees

• Emerging Leaders Program

Through the dedicated efforts of our Corporate and property leadership teams, our charitable Foundation and the PENN Diversity Committee, we launched a number of major new initiatives in 2021 that will help to improve the lives of our team members, their families and those in need in our communities.

Highlights from last year’s efforts include the launch of a $4 million STEM Scholarship Fund and internship program at historically black colleges and universities in states in which we operate.

In addition, we started a new pilot program to help mentor and develop our hourly and early career team members who want to pursue leadership positions at our Company.

We also kicked off our annual $1 Million Diversity Scholarship Program for the children of team members and are now reviewing applications for the 2022-2023 school year.

In our inaugural year, we awarded over $1 million in scholarships to 58 individuals, the majority of whom were first generation college students.

As of December 31, 2021, we had approximately 21,973 full-time and part-time employees.

As of December 31, 2021, we had 43 collective bargaining agreements covering approximately 4,341 active employees.

Nine collective bargaining agreements are scheduled to expire in 2021, and we are currently renegotiating three collective bargaining agreements that expired in 2020.

Four collective bargaining agreements are scheduled to expire in 2022.

Although we believe that we have good employee relations, there can be no assurance that we will be able to extend or enter into replacement agreements.

If we are able to extend or enter into replacement agreements, there can be no assurance as to whether the terms will be on comparable terms to the existing agreements.

In addition, the Company established a special COVID-19 Emergency Relief Fund under the Penn National Gaming Foundation to provide assistance to team members who have not been called back from furlough due to the ongoing restrictions associated with COVID-19.

The Company has raised $3.7 million from our Board of Directors, Chief Executive Officer, senior management and the Penn National Gaming Foundation.

In addition, we provided $13 million in one-time holiday cash bonuses in the fourth quarter to our non-executive team members companywide to help with the financial impact to their families from COVID-19.

We also created the Hurricane Laura Relief Fund with an initial contribution of $2.5 million to help our community and team members impacted by the storm, in addition to providing more than $6 million in full wages and benefits to our team members during the L'Auberge Lake Charles property closure.

Finally, on the social justice front, our Diversity Committee announced a new scholarship program for disadvantaged team members that will be funded with a $1 million annual commitment from our Company, and we launched a series of new inclusion-related initiatives.

Available Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business