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Penn Entertainment met expectations in the third quarter—but the next few months are a critical period for the success of its sports betting partnership with ESPN.
The company reported Q3 2024 revenues of $1.64 billion, about a 1.2% increase from the same period in 2023, and nearly in line with Wall Street’s $1.66 billion projection. The company’s stock was up 5.15% at the closing bell Thursday.
Penn’s interactive segment, driven by ESPN Bet, recorded $244.6 million in revenues, up 24.6% compared to the same period last year, but also nearly doubled its EBITDAR loss in the segment to $90.9 million.
Revenue growth was driven by the sportsbook’s growing user base. Penn reported 3.9 million digital users, an 85% increase in the last year, and a No. 3 ranking among all sportsbooks in weekly active users, behind the two sports betting giants, FanDuel and DraftKings. ESPN Bet also launched in New York in September, the company’s 19th state.
“Prior to the start of football season, we released several product enhancements and ESPN integrations to our ESPN Bet offering. These product improvements helped contribute to a higher parlay mix and sportsbook hold during the third quarter,” Penn CEO Jay Snowden said.
The sportsbook, which launched last November following a 10-year, $2 billion partnership with ESPN, is entering its first full NFL season with the media giant, and its performance during the football season will be indicative of its medium- to long-term growth, according to a report by the Jefferies Group.
“This fall is really the key period to really assess where we are, how we’re doing, where we sit in the market,” ESPN VP for sports product and technology Brian Marshall told Front Office Sports in August.
As of an October update from an Eilers & Krejcik Gaming report, ESPN had only secured 2.5% of the gross gaming revenue share of online sports betting from June to August, sixth among sportsbooks. The sportsbook’s GGR fell to 1.5% in September.
Penn and ESPN Bet are hoping that further integration with the broader ESPN ecosystem of digital products will fuel growth through Year 2. ESPN and ESPN Bet account linking launched Oct. 30, which allows a more streamlined process for sports betting straight from the ESPN app. Penn cited more product enhancements coming in the next two quarters, including branded bets and upgraded options to bet while streaming live games.
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