PENN reports $1.66B in Q2 revenue, confirms ESPN Bet New York launch ahead of college football season

PENN Entertainment posted revenues of $1.66 billion for the second quarter of 2024, slightly down from $1.67 billion in the same period last year. Net income dropped to a loss of $27.1 million, compared to a profit of $78.1 million in Q2 2023. Adjusted EBITDAR declined to $367 million, marking a 23 percent decrease.

Despite these challenges, Penn's retail segment remained strong, with revenues of $1.4 billion and an Adjusted EBITDAR of $496.6 million. The interactive segment, however, reported an adjusted EBITDA loss of $102.8 million, though it achieved record quarterly gaming revenue.

Gaming revenue rose by 3 percent to $1.33 billion, while revenue from hotels, food, beverages, and other services decreased by 13.4 percent. The interactive segment, encompassing all online and retail sports betting (ESPN Bet), online casino, and social gaming operations, experienced a 9.7 percent decline.

The Northeast segment remained the largest revenue contributor, generating $696.3 million. Revenue in the South segment declined, whereas the West and Midwest segments saw increases.

ESPN Bet expanding to New York

CEO Jay Snowden confirmed that the company will go live in New York, the largest legal sports betting market in the U.S., with its ESPN Bet brand by the start of the college football season. 

He also touched on the controversial winners’ surcharge proposed by DraftKings, and while he didn't suggest Penn would follow suit, he didn't rule it out either. “It’s not even on our radar, I hesitate to never say never, we’re really focused on continuing to enhance the product and drive loyalty and retention," Snowden said.

The ESPN BET launch last November marked a significant milestone for Penn, bringing the major sports media brand into the betting industry. However, Snowden acknowledged that this partnership has not yet secured a top-tier position for Penn in the market.

“In our Interactive segment, we delivered record quarterly gaming revenue driven by enhanced risk and trading processes and deliberate reinvestment strategies. We will maintain our disciplined approach to customer engagement when we launch ESPN BET in New York in late August, where we will benefit from ESPN’s extensive linear and digital reach," Snowden said.

"We recently began the rollout of our ESPN BET product enhancements and will launch the remaining key upgrades prior to the start of college football and our launch in New York. In parallel, our partners at ESPN are expanding our unique ESPN BET media integrations, including those with ESPN’s leading fantasy football product which boasts over 12 million active users."

The sportsbook will also become more visible in the core ESPN app. It currently features in ESPN Gamecast but will display odds around live scores. By the fourth quarter, ESPN and ESPN Fantasy accounts will link directly to the betting product, with the ultimate goal of making everything under the ESPN brand feel “inextricably linked."

Another move the company has confirmed is a plan to rebrand eight of its retail sportsbooks to ESPN BET. The upcoming brand conversions, to take place "in sports-centric markets," are expected to further brand connectivity and create cross-sell opportunities between casinos and ESPN BET.