Penn curbs digital losses in Q2 ahead of pivotal football season

As has been the case for a while, the gaming media and financial worlds had their eyes and ears peeled for Penn Entertainment’s latest quarterly results and earnings call when it took place on Thursday. Overall, the second quarter was somewhat steady and unspectacular for the company, with much discussion and anticipation pointed towards future developments.

Penn posted group revenue of $1.76 billion for the quarter, up 6% over the prior period. Through the first half of 2025, the company’s group revenue of $3.4 billion is about 5% ahead of its pace from 2024.

Revenue from the company’s retail casino properties was essentially flat at $1.4 billion, with adjusted EBITDAR of $498.6 million. CEO Jay Snowden noted in prepared remarks that the sector had a “solid” quarter, “particularly in those markets not impacted by new supply, where we saw revenue growth of 4% year over year”.

The interactive division, a focal point of interest, posted $316.1 million in revenue against an adjusted EBITDA loss of $62 million.

So far in 2025, Penn has managed to pare about half of its interactive losses from the previous year – last year’s Q2 AEBITDA loss was $102 million, and the $151 million loss in H1 2025 is down from a $299 million AEBITDA loss in H1 2024. Snowden noted that while Q2 “delivered significant year-over-year improvements in adjusted revenue and adjusted EBITDA” for its digital sector, there is “still plenty of work to do”.

Penn ended the quarter with $671.6 million in cash versus net debt of $2.1 billion. Its adjusted earnings per share was $0.10, compared to -$0.18 last year. Through Wednesday, the company has repurchased $115.3 million worth of shares in 2025 and it remains committed to at least $350 million in repurchases for the year.

Investing in core strengths

On the retail side, Penn is working to mitigate the effects of new competition in and around several of its regional markets. In Chicagoland, the company is moving two of its Hollywood Casino riverboats to landside locations in Joliet and Aurora. Joliet is to open on Monday, ahead of schedule, while Aurora is slated for completion next year.

In Iowa, the company is also moving its Ameristar Council Bluffs riverboat ashore in late 2027 or 2028 in response to expansion in Nebraska. And its Louisiana and Detroit locations will see millions in renovation projects to account for growth and disruptions there.

Macroeconomic uncertainty has been rising since US President Donald Trump took office in January. Rising US tariffs have wildly swung financial markets, the Federal Reserve has held interest rates steady all year, economic data has been thrown into question, and so on. But Snowden maintained on Thursday, as have his contemporaries at other casino companies, that the industry’s foundations remain strong.

“There’s really one true macroeconomic factor that has a tight correlation to our business, which is employment, and employment’s been strong,” he told analysts. “Americans have jobs, Americans spend money. It’s really quite simple as it relates to the regional gaming business, at least as long as I’ve been doing this, and gas prices have been low and they’ve stayed low. So those are all helpful tailwinds. Consumer confidence seems to at least be stable.”

CFO Felicia Hendrix confirmed that Penn’s retail guidance for the year is unchanged.

Now for the main event

The real meat of Thursday’s call was discussion of ESPN Bet, Penn’s sportsbook that has garnered nearly all of the attention surrounding the company since it was first announced in August 2023. Penn and Snowden doubled down on ESPN Bet with a multibillion-dollar deal off the heels of a previous disaster with Barstool Sports.

The partnership with ESPN was created in the hope of competing for a podium spot in the US sports betting market. But so far the platform has struggled to maintain market share of low single-digits, as in less than 3%. Things really started to get hot in February, when Snowden noted that there is a three-year opt-out clause in the deal if projections were not being hit. That means things could come crumbling down by this time next year.

Last fall, Penn put a lot of stock into launching in New York for football season, but it was unable to do so until late September after the season had already begun. This year the company is again hopeful that a full, successful football season will act as panacea for a sore spot that could otherwise become cancerous.

“The significant investments in interactive are undoubtedly behind us,” Snowden said in prepared remarks. “Our focus for the balance of this year and going forward remains operational execution and transforming our strategic investments into consistent long-term returns and value creation for our shareholders.”

Integrations and NFL partnerships

Fortunately for Penn, multiple developments could significantly boost its ESPN Bet fortunes. The first is the launch of FanCenter, a new integration tool that gives bettors personalised markets based on their favourite teams, players and fantasy football rosters. It is the latest example of how Penn has sought to integrate ESPN Bet deeper within the ESPN ecosystem.

And speaking of the so-called Worldwide Leader in Sports, ESPN has been busy on its own. The Disney-owned company is preparing to roll out its first direct-to-consumer streaming service on 21 August. The platform, which will cost $29.99 per month, is expected to feature extensive sports betting tie-ins, although ESPN already features a fair share of betting content on its network broadcasts and shows.

Additionally, ESPN announced a blockbuster deal this week to acquire most of the NFL’s media assets, including NFL Network and RedZone, in exchange for a 10% stake in the business. This is the first time a US sports league has secured ownership in a media organisation, much less one with a betting platform. While the deal raises several questions related to media integrity, Penn isn’t concerned with all that. Instead it is rightfully optimistic about the NFL connection, which has been a golden ticket for years.

“Maybe this is stating the obvious, but we think … all of those announcements are good for the entire ESPN ecosystem, of which ESPN Bet is certainly part,” Snowden told analysts.

Snowden clarified he is not privy to ESPN’s plans, only to the extent that ESPN Bet is involved. But he reckoned the network “is in a stronger position today than they were a week ago”, which is “really good for us and our brand”.

They who shall not be named

Overall, much was said about ESPN Bet, but another name was notably unspoken on Thursday: HG Vora. The investment firm has for months been locked in an ugly, highly publicised proxy fight with Penn.

At issue is Penn’s digital strategy, which HG has condemned as being disastrous for shareholders. The company’s stock has spiralled more than 60% in the last five years, despite a robust retail casino business. Vora has also criticised the compensation of Snowden, which it views as excessive given the company’s digital cash haemorrhage.

Ahead of Penn’s annual meeting in mid-June, Vora had nominated three new board members: Johnny Hartnett, Carlos Ruisanchez and William Clifford. However, Penn reduced the number of available seats to two, leaving Clifford out while electing the others. This resulted in a lawsuit from Vora in May, and the court system is where the issue will ultimately play out. Penn has given no intention of changing its mind or of divesting any holdings.

Snowden was asked about the new board members, to which he replied “it’s always nice to have fresh eyes and perspectives”. That’s about all that was said.