Pennsylvania-Based mostly PENN Leisure Receives Criticism For Board Construction

PENN Leisure, a Pennsylvania-based gaming firm situated in Wyomissing, has come beneath scrutiny just lately for an alleged improper board construction. HG Vora Capital, an investor within the firm, notified PENN that it’s violating the Pennsylvania Enterprise Company Legislation.

HG Vora Capital, a hedge fund out of New York, is in search of board seats at PENN Leisure.

Not solely is PENN Leisure’s headquarters within the Keystone State, however it additionally operates certainly one of 21 PA on-line casinos, an internet sportsbook and 4 Hollywood-branded retail casinos.

PENN Leisure investor accusing firm of improper board construction

HG Vora Capital needs extra seats on PENN’s board. Nevertheless, the hedge fund, which owns an 18% stake in PENN, filed a grievance in opposition to the scale of the corporate’s board.

Based on Reuters, PENN’s board members are up for election each three years. Two administrators who stand for re-election this yr have served on the board for greater than 20 years. HG Vora Capital’s regulatory submitting acknowledged:

“The present construction of the Board is legally improper and disenfranchises shareholders by artificially constricting the variety of administrators who might stand for re-election on the Firm’s 2024 annual assembly. We anticipate the Firm to treatment this violation promptly.”

PENN’s inventory has not carried out properly over the past two years or so. The corporate’s worth as soon as stood at $130.47 on March 12, 2021. As of Jan. 19, 2023, the worth has plummeted to $23.33.

The dismal inventory efficiency has prompted issues for HG Vora Capital, which might probably nominate its personal board candidates that every one shareholders would vote on.

PENN Leisure’s presence in PA playing market

PENN has a big footprint within the Pennsylvania playing market in each the web and retail verticals. The corporate has the next Hollywood land-based casinos within the Keystone State:

• Penn Nationwide Race Course
• The Meadows
• Morgantown
• York

Hollywood On line casino Morgantown and York are each thought-about mini-casinos, which might’t maintain greater than 750 slot machines inside the power.

PENN additionally operates an internet sportsbook and on line casino throughout the state. After splitting with Barstool Sports activities final summer season, PENN cast a partnership with ESPN and launched ESPN Wager PA final fall. Hollywood On line casino PA, PENN’s on-line on line casino model, is now obtainable by way of the ESPN Wager app.

The corporate’s PA licensee additionally companions with notable operators BetMGM On line casino PA and DraftKings On line casino PA.

The net sector for PENN should enhance for the corporate’s inventory worth to extend within the close to future. Fortunately for PENN, the Keystone State is among the most sturdy gaming markets within the nation for each retail and on-line.

The launch of any new on-line product, comparable to ESPN Wager, goes to be a long-term funding. Hopefully for PENN’s sake, the return on funding will probably be value it.

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