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Revenue breakdown for Pinnacle Entertainment

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Pinnacle Entertainment revenues

Pinnacle Entertainment (PNK) earns its revenues through gaming, lodging, retail, food, and beverage operations.

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Gaming

Most of PNK’s revenues come from gaming, primarily from slot machines and to a lesser extent from table games. Gaming revenues consist of net win, which is the difference between amounts wagered and amounts paid to winning patrons.

The chart above shows that PNK’s gaming revenues represented 89% of the total revenues generated by the company for the trailing twelve months (or TTM) ending September 30, 2014. PNK’s gross margin in the gaming business was 47% for the TTM.

Lodging

Hotel room income accounted for only 2% of PNK’s total revenues, as shown by the chart above. Gross margin for lodging revenues was 54% for the TTM ending September 30, 2014.

Important performance indicators in the lodging industry include occupancy rate, average daily rate (or ADR), and revenue per available room (or RevPAR). RevPAR is ADR times the occupancy rate.

Food and beverages

PNK’s food and beverage income contributed about 5% of total revenues generated for the TTM ending September 30, 2014. Gross margin on PNK’s food and beverage products stood at 8% in the same period. However, PNK’s peers Penn National Gaming (PENN) and Boyd Gaming (BYD) had gross margins of 26% and 46%, respectively, in the food and beverage business during the same period.

Those who wish to hold a diversified portfolio in leisure companies may invest in ETFs (or exchange-traded funds) like the Consumer Discretionary Select Sector SPDR Fund (XLY) and VanEck Vectors Gaming (BJK).

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