Shares of Penn National Gaming (NASDAQ:PENN) declined by 9.4% on Wednesday, as rapidly rising COVID-19 case counts threw its casino reopening plan into question.
Penn's stock surged on Tuesday, after the casino company said it had reopened 30 of its 41 properties and planned to open the rest in the weeks ahead. However, with novel coronavirus infections increasing at an alarming rate in multiple U.S. states, government officials are warning that economic reopening plans may need to be slowed and even reversed in some areas. That could force Penn to halt its plans to restart operations at its remain casinos.
Moreover, fears of getting sick could keep gamblers out of Penn's casinos, particularly if they choose to place bets online, as many did during the early stages of the pandemic.
Penn National Gaming's plans to launch a sports-betting mobile app in partnership with Barstool Sports in the third quarter could help to a least partially offset coronavirus-related traffic and revenue declines at its casinos. But if soaring COVID-19 case counts keep its casinos relatively empty -- or worse, closed -- its online operations would likely not be enough to stem its losses.