Penn Entertainment Signals Digital Strategy Shift Amid Q3 Results

Penn Entertainment’s latest quarterly results for the period ending September 30 were overshadowed by its announcement of a “realignment” of its digital focus.

The news coincided with the early termination of Penn’s US online sports betting (OSB) deal with ESPN. CEO and President Jay Snowden commented:

“Penn’s unique omnichannel strategy is anchored in a diverse portfolio of market-leading regional casinos and a complementary digital business. We are realigning our digital focus to leverage the strength of our US iCasino and Canadian operations, while continuing to use OSB to drive both the acquisition of high-lifetime-value customers and unique cross-sell opportunities across Penn’s retail and digital assets.”

For the quarter, total revenue reached US$1.72bn, up from $1.64bn year-on-year, while net losses widened to $865.1mfrom $37.5m. Consolidated adjusted EBITDA stood at $194.9m, slightly up from $193.5m year-on-year.

The interactive segment generated $297.7m in revenue, with an adjusted EBITDA loss of $76.6m. Snowden noted:

“Gaming revenues and Adjusted EBITDA came in below expectations due to customer-friendly hold across our digital operations and lower than anticipated OSB volumes.”

Meanwhile, Penn’s North America iCasino business posted its highest quarterly gaming revenue to date, up nearly 40% year-over-year. This growth was powered by record OSB cross-sell of 62% and strong performance from standalone Hollywood and theScore Bet iCasino apps.

The company’s retail properties delivered $1.4bn in revenue with Adjusted EBITDAR of $465.8m. Snowden added:

“Demand remained generally stable across our core gaming and non-gaming amenities, particularly at properties not affected by new supply or competitor promotions. Our Q3 performance was supported by strong results in our West segment, as well as in Ohio, St. Louis, and Illinois, alongside growth in theoretical revenue, visitation, and spend per visit across our retail portfolio.”

This quarter highlights a clear pivot in Penn’s digital strategy while retail operations continue to show resilience and growth.