Analyst: Penn National's riverboat ecilpses rivals

An analyst was so impressed with Penn National Gaming Inc.'s rebranded Indiana riverboat that he said rivals will likely have a hard time competing with the property.

The Wyomissing, Pa.-based casino operator held an official opening for the Hollywood Casino in Lawrenceburg, Ind., on Monday. Stifel Nicolaus & Co.'s Steven Wieczynski said that the riverboat, which was previously called the Argosy Casino Hotel, expanded its gaming floor to accommodate 9,000 people, more than doubling its previous capacity.

The analyst said in a client note late Monday that the slot area looked "fresh" with approximately 800 new machines, and its larger poker room "should help draw a higher-end clientele and draw more guests during large tournaments."

Wieczynski said competitor Grand Victoria riverboat casino is not as close to the Cincinnati area as the Hollywood Casino and is more difficult to access. The property is owned by a Hyatt subsidiary and an MGM Mirage subsidiary.

"Its gaming floor is on four levels, making it less attractive and it feels stale," he added.

Another rival, Belterra Casino Resort & Spa owned by Pinnacle Entertainment Inc., is even further away from Cincinnati, Wieczynski said. Lawrenceburg is approximately 32 miles from Cincinnati, one of the biggest cities closest to the Hollywood Casino.

The analyst reaffirmed a "Buy" rating and $38 price target.

Shares of Penn National Gaming added 17 cents to $29.51 in morning trading.