Penn National reports high profits

WYOMISSING, Pennsylvania -- M Resort owner Penn National Gaming told investors Thursday the locals gaming market is growing increasingly more competitive, especially with Station Casinos emerging from bankruptcy earlier this year.

In a conference call with analysts and investors to announce the company's third quarter earnings, Penn executives reflected on an increase in business they have seen at M Resort. Penn National, which is based in Wyomissing, Pa., took over ownership of the 390-room M Resort in June.

"Las Vegas locals is clearly the most intensely competitive market out there," Penn National President Tim Wilmott said. "Obviously, I think with Stations now reformed, they will be 800-pound gorilla in the Las Vegas locals market."

Wilmott said M Resort has the advantage of being "the first right-hand turn coming in from Southern California" off Interstate 15. He said Penn is trying to establish a different identity at the stylish Henderson casino, which stands about 10 miles from the heart of the Strip.

Penn gained ownership of the property a year ago when it acquired the hotel-casino's debt at a 75 percent discount. The company began marketing M Resort to its regional customers in January. State gaming regulators approved Penn's ownership at the end of May.

M Resort developer Anthony Marnell III continues to operate the casino as the property's president.

Penn National said its net income was $70.8 million, or 66 cents per share, in its third quarter ended Sept. 30, up from $57.1 million, or 53 cents per share, a year earlier.

Penn National, which operates 25 casinos in 18 jurisdictions, said its revenues in the quarter were $710.9 million, up 11.4 percent from $638.3 million a year earlier.

M Resort's quarterly results are now included in Penn's East-West division, which includes properties on the East Coast and a New Mexico racetrack.

The division reported revenues of $350.3 million in the quarter, compared with $273.1 million a year ago.