PENN Entertainment reports 3% Q2 revenue increase
Casino and sportsbook operator confirms adjusted EBITDA drop of 31% as CEO talks up ESPN deal
PENN Entertainment has reported a modest 2.9% year-on-year (YOY) increase in its overall group revenue during Q2 2023 to $1.7bn.
Releasing its financials for the period, the soon-to-be ESPN Bet operator confirmed net income of $78.1m with a net income margin of 4.7%, compared to figures of $26.1m and 1.6% respectively in Q2 2022.
PENN’s adjusted EBITDA fell 31% YOY in Q2 to $330.4m, with the EBITDAR (inclusive of rental revenue) dipping 5.5% in the same period to $476.8m.
At a divisional level, PENN Interactive was the only segment of the business to report significant growth during Q2, with revenue increasing 66% YOY to $257.5m.
PENN Interactive also narrowed its adjusted EBITDAR losses in the period from $20.8m to $12.8m.
The operator’s northeast segment saw revenue growth of just under 1% in Q2 to $688m, increasing its adjusted EBITDAR by 1% YOY to $217.3m over the same period.
PENN’s other business segments, namely the south, west, and midwest divisions all reported drops in revenue and adjusted EBITDAR over the quarter.
2During Q2, PENN successfully transitioned the Barstool Sportsbook away from the Kambi platform onto its own in-house developed technology stack as part of its transition to a more cost-efficient media-led business.
PENN concluded a $388m deal to purchase the remaining 64% stake in Barstool Sports in February, a move which facilitated the migration away from third-party powered technology.
However, the operator sensationally threw away its long-term vision for the Barstool Sportsbook yesterday when it confirmed a $2bn partnership with US sports broadcasting goliath ESPN to rebrand the Barstool Sportsbook as ESPN Bet.
PENN also agreed the 100% sale of the Barstool Sports business back to founder Dave Portnoy “in exchange for certain non-compete and other restrictive covenants”, a move which suggests Portnoy will be blocked from launching a competing sportsbook in the near future.
PENN CEO and president Jay Snowden was bullish about the migration and relaunch of the Barstool Sportsbook, hailing its impending transition into the ESPN Bet sportsbook as a “powerful combination.”
“The company experienced stable property level performance this quarter with each month showing sequential improvement,” Snowden said.
“Additionally, we are excited to have successfully re-launched our sportsbook app, which features major product improvements that significantly upgrade the user experience, including streamlined navigation, faster load times, expanded wagering markets, enhanced promotions, and deeper media integrations.
“The migration reflects a significant achievement for our company that was completed seamlessly and with minimal disruption to our customers. Our state-of-the-art technology platform continues to drive strong results for theScore Bet in Ontario.
Expanding on the ESPN deal in closing remarks, Snowden continued: “Additionally, as we announced yesterday, in connection with our agreement with ESPN, our online Barstool Sportsbook will be rebranded ESPN Bet in fall 2023.
“The powerful combination of our operational expertise, improved product, unparalleled market access and industry-leading PENN Playdatabase with the number one sports brands in both the US and Canada with ESPN and theScore, will create a best-in-class user experience and allow us to significantly expand our digital footprint and more efficiently grow our customer database,” he added.