Pinnacle Entertainment, owner of the Heartland Poker Tour, reported positive second quarter financial results Wednesday, sparking a jump in the company’s stock price.
Revenue increased $8.9 million to $298.3 million, a 3.1 percent lift from the second quarter of 2011. Consolidated Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), was even more impressive, soaring from $58.7 million to $73.2 million, a jump of 24.7 percent. Even better than that was operating income, which was up to $38.8 million from $16.9 million, a 77 percent increase.
One of the topics of discussion in the quarterly report was Pinnacle’s plans for the recently acquired Heartland Poker Tour. While details were not divulged, the company said that it intends to grow the tour:
In July, we extended our development strategy and growth pipeline with the acquisition of the assets of Federated Sports and Gaming, Inc. and Federated Heartland Inc. Through the Heartland Poker Tour purchase, we acquired an impressive portfolio of brands and intellectual property that will help us advance a new line of business and our online gaming strategy. We also plan to expand the Heartland Poker Tour and more extensively integrate its events into our property portfolio. We expect the Heartland acquisition to be accretive.
Pinnacle Entertainment owns eight gaming properties around the United States, five of which house poker rooms and, based on the above statement, it appears that Pinnacle will look to expand the Heartland Poker Tour schedule to include some of those venues.
Pinnacle’s ownership of the Heartland Poker Tour came to be as the result of its previous owner, Federated Sports + Gaming filing for Chapter 11 bankruptcy back in February. Federated was formed in January 2011 by several people, including former World Series of Poker boss Jeffrey Pollack and Annie Duke. The company created the Epic Poker League, a league designed to accept only qualifying pros and offering lucrative overlays. The league was suspended prior to the fourth event of the inaugural season with management citing scheduling issues. It soon became clear, however, that Federated was in dire financial straits and it soon filed for bankruptcy.
Both Duke and Pollack claimed that Federated Sports + Gaming was simply reorganizing and looking for a partner to help keep things going, but that didn’t happen. Pinnacle Entertainment acquired the assets of Federated, including the Epic Poker League, the EpicPoker.com website, and the Global Poker Index, for $300,000 in a bankruptcy auction in the United States Bankruptcy Court for the District of Maryland. In a separate auction, Pinnacle bought the Heartland Poker Tour with the winning bid of $4.2 million.
The Heartland Poker Tour was founded in 2005 with the idea to showcase smaller regional casinos (read: not Las Vegas or Atlantic City casinos) and make an exciting tour with smaller buy-ins that would be accessible to a wider array of poker players. It is broadcast on hundreds of television stations around the country.