At its recent Investor Day on October 7, Penn Entertainment highlighted a promising outlook for its digital division, particularly following the launch of ESPN Bet in New York. Early data suggests a strong start for the platform, which was introduced just a week prior, with plans for deeper integration with ESPN to enhance user engagement and streamline the betting experience.
Penn CEO Jay Snowden expressed confidence in the potential of ESPN Bet, despite previous scrutiny from analysts and speculation regarding a possible acquisition by Boyd Gaming. Recent trends in New York indicate that ESPN Bet users are placing significantly higher bets compared to users in other states where the platform operates. In its opening days, ESPN Bet reported $3 million in bets, outperforming several competitors, although market leaders DraftKings and FanDuel reported considerably higher figures.
Notably, the average deposit amount for New York users has surged, suggesting a growing interest in the platform. Since launching in late September, Penn’s hold rate has increased, reflecting a more favorable betting environment. Year-over-year metrics indicate a dramatic rise in sportsbook net gaming revenue and monthly unique users.
The integration of ESPN Bet with ESPN’s existing features is central to the company’s strategy. Enhancements such as direct links to ESPN Gamecast within the app are expected to create a more cohesive experience for users, seamlessly connecting sports viewing, betting, and statistics tracking. With the NBA season approaching, further synchronization of player data between the two platforms is anticipated to unlock personalized features for users.
Preliminary results for the third quarter suggest that Penn has improved its forecast for adjusted EBITDA losses in its interactive segment, now estimated between $90 million and $100 million, down from earlier predictions. This adjustment reflects stronger performance in betting and reduced promotional spending.
The Hollywood Casino brand has also seen a remarkable increase in active users, contributing significantly to overall gaming revenue. While growth in theScore’s casino offerings was slower, it still marked a positive trend.
Overall, Penn’s interactive operations have become a key revenue driver, with online betting and iGaming comprising a significant portion of digital revenues. The company’s customer base has seen substantial growth, particularly with the introduction of ESPN Bet, attracting younger players and expanding its reach in the digital space.
Looking beyond the U.S., Penn is observing growth in Ontario, where its theScore Bet platform is gaining market share. However, there remains uncertainty regarding a launch in Alberta, as the province works towards establishing a regulated gambling framework.
As Penn Entertainment continues to innovate within the digital gaming landscape, the integration of ESPN Bet with ESPN’s established platform could prove pivotal in enhancing user experience and driving growth in the competitive online betting market.
