Penn Entertainment announced a record $316.1 million in online revenue, but an adjusted second-quarter EBITDA loss of $62 million for its online sports betting and casino division on Thursday, but Chief Executive Officer Jay Snowden was optimistic that the launch of ESPN’s new FanCenter sports betting/fantasy hub would soon boost ESPN Bet.
In an investor call on Thursday, where $1.4 billion in retail revenue was also announced, Snowden repeatedly returned to the “deep integrations” with ESPN in helping to build “nice momentum.” On Wednesday, ESPN announced a deal with the National Football League to acquire the NFL Network, RedZone, and NFL Fantasy. ESPN will launch a new streaming service on Aug. 21.
Snowden expects the linkage to spur traffic toward an ESPN Bet app that has generated a national handle share he characterized as “maybe a little south of 3 percent.”
“We think those are all just going to continue to solidify ESPN’s position as the worldwide leader in sports, and all those announcements are good for the entire ESPN ecosystem, of which ESPN Bet is certainly part,” Snowden said. “The launch of the direct-to-consumer [streaming service] offering is going to be deeply integrated with sports betting, ESPN Bet. And that’s going to be the first time that we’ve seen anything like that in the space.
“We’re interested to see what that means for the sports fans of ESPN and our ability to continue to provide a great betting option for people through those deep integrations throughout their digital and streaming ecosystem.”
ESPN Bet cool as the other side of the pillow
In 2023, Penn bought itself out of an abortive branding relationship with Barstool Sports and paid $2 billion to partner with ESPN to launch ESPN Bet. Snowden said at the time that hoped to leverage the ubiquitous national sports platform to gain 20% of United States market share.
Both ESPN and Penn have the option to discontinue the 10-year partnership in 2026 if ESPN Bet doesn’t reach predetermined plateaus, a fact Snowden reiterated in a February investor call. Snowden said that reaching its targets for its entire online sector was not “Herculean.”
Snowden was encouraged by reported 50% year-over-year growth in first-time bettors and said first-time deposits doubled over the same period through July. Snowden said Penn is “nearing an inflection point” of the digital business.
“We anticipate each quarter of 2025 delivering a lower loss sequentially throughout the year and our interactive division to be profitable in the fourth quarter of ’25 and the full year of ’26 and beyond,” he said. “This is still the case. The significant investments in interactive are undoubtedly behind us.”
Penn reported online revenue of $290.1 million and adjusted EBITDA losses of $89 million in Q1. Compared to Q1, online revenue in the second quarter was down $26 million, and adjusted EBITDA losses shrunk $27 million.
From the PENN Q2 earnings release
Online property highlights:
- Revenue of $316.1 million (including tax gross up $137.9 million)
- Adjusted EBITDA loss of $62.0 million.
Retail property highlights:
- Revenue of $1.4 billion
- Adjusted EBITDAR of $489.6 million
- Adjusted EBITDAR margins of 33.8%.
Penn Chief Technology Officer Aaron LaBerge said Penn will aggressively market its relationship with ESPN, but without the need for greater promotional spending. FanCenter, he said, provides the “hook” that ESPN Bet lacked last year.
“We’ll make sure that the word gets out about FanCenter because it’s a really cool new feature and it’s differentiated,” he said. “It’s more about our ability to execute at a different level and the experiences that we’re offering and integrations we’re offering being at a different level than we were last year.
“We have much improved [know your customer]. We have real personalization this year that not only flows through the app but flows into FanCenter. We do have better brand marketing. We have a truly differentiated feature that no other sportsbook has: Nobody else is a partner with ESPN Fantasy, the biggest fantasy platform in the U.S. That is integrated with our product.”
PENN-Q225-Investor-Slides-8-7-25Among new enhancements to the ESPN Bet app will be a statistical evaluation tool for player prop bets. Also, a new “find-a-bet” icon on the ESPN Fantasy app will allow players to peruse ESPN Bet markets for players on their fantasy team. ESPN Fantasy Football had a record 13 million-plus fantasy players last season.
Observers at least neutral on Penn’s future
Jefferies Financial Group analysts deemed the combination of Penn’s better-than-expected retail earnings and worse-than-expected online figures “offsetting and neutral” on its stock price, which was up 2.53% immediately after the earnings call on Thursday.
Tomer Imber, the senior sales director at Optimove, a a business-to-consumer marketing technology firm, predicted that ESPN Bet will begin “eating up market share from the leaders” in the coming year because of ESPN’s machinations with the NFL.
“I think ESPN is obviously under a lot of pressure with the deal with Penn,” Tomer told InGame. “They have to hit a certain market share. So they’re going to be aggressive. They’re going to be very, very aggressive. The ESPN and NFL, that’s part of them being aggressive.”
