Penn Entertainment‘s stock jumped double digits Thursday as the company reported strong online casino growth in its Q1 earnings report.
CEO Jay Snowden said on the earnings call that there had been a shift in focus over the past six months to its five jurisdictions with both online casino and sports betting, noting that progression looked “quite good” through the first quarter. Those five saw net gaming revenue growth of 362% thanks to Penn’s standalone online casino apps, with average monthly users up 345% year-over-year.
Penn reported an adjusted EBITDA loss of $10.8 million in the quarter, which is much improved from the $89 million loss in Q1 2025. That is largely due to both Penn and Disney pulling the plug on their ESPN Bet partnership in December. Digital should be profitable in the fourth quarter, Snowden said.
PENN closed at $17.26 Thursday, up 16.9% from Wednesday’s close. That came on more than 2.5 times its average daily volume.
Standalone casino app strength
There is “really good momentum” for the Hollywood Casino standalone app coming off a “solid” March, Snowden said. Penn debuted the app in Pennsylvania in December 2024 and later expanded to Michigan, both of which have Hollywood-branded casinos.
The company leaning into that brand equity is maybe why the app is growing better than those markets, Snowden added. There are also no signs that customer acquisition is slowing in either state, Chief Technology Officer Aaron LaBerge said.
The Hollywood app and online casino in Ontario, where Penn has a standalone theScore Casino app, are driving most of that iGaming growth, Snowden said. A single platform with a shared wallet across all of the products is the “ideal” scenario, he added, especially with Penn’s retail footprint.
“I don’t think we’re that far away from it,” Snowden said.
Here comes Alberta
Penn slightly tweaked its EBITDA guidance for digital to a loss of around $20 million, which is how much Snowden said the company will invest in customer acquisition when Alberta online casinos launch July 13.
There are as many people using theScore media app in Alberta as there are in Ontario, LaBerge said.
“Look, we’ve launched in Ontario and enjoy a very nice market share there today,” LaBerge added. “It’s a big part of our gaming business, and we expect to see similar market share there based on the investments we’re going to make.”
LaBerge noted there are “a lot more” applicants for Alberta than there were for Ontario, but added that the strength of theScore bet brand should help Penn “break through” the marketing noise.
Online sports betting still important to Penn
Penn has shifted its emphasis from online sports betting only states, but the sportsbook remains a key part of the equation for online casino success.
Snowden said 60% of its online casino customers were originally sports betting customers.
That is why even if a state is not currently considering iGaming or might raise taxes, it is still worth sticking around in those states if they can operate at “close to breakeven from a contribution margin perspective,” he added.
There has been pressure on customer acquisition costs surrounding sports betting with prediction markets pushing for customers and other sportsbooks matching that spending, Snowden said.
Penn left DC before online casino proposal
Those comments were true for everywhere but Washington D.C., where Penn pulled theScore Bet in February. Now, there is a proposal to legalize online casinos in the District.
Snowden said there was not much volume while LaBerge said it was an “obvious” decision.
“There’s no real plans to change our footprint right now,” LaBerge added.
Penn reported $1.6 million in revenue on $20.6 million in D.C. sports betting handle for 2025, the lowest totals by far. Compare that to the second-lowest totals from Fanatics with $6.7 million in revenue on $65.6 million for the year.
Player retention meeting expectations
Penn is “exactly where we expected to be” concerning player retention after the switch from the ESPN Bet brand in December, Snowden said.
Retention for higher worth customers has been “fantastic” while some unprofitable and lower worth customers fall out by design, he said. The hope is for growth in monthly active users beginning later this year into 2027, he added.
Monthly active users dropped 3.5% to 540,000 in the quarter compared to last year, but the average revenue per monthly active users jumped 14% to $84.
Mobile betting misses structural hold
Online sports betting hold was 8.4% during the quarter, which was up 0.88 percentage points from 7.5% last year. That still is lower than Penn’s structural hold of 9%, though Snowden expects to hit that or higher for the second quarter.
“Generally speaking, March Madness just doesn’t hold as well as other sports because you don’t have the same game parlay volumes there that you do with NBA, that you do with NFL, that you do with MLB,” Snowden said.
“We weren’t disappointed, but I think, Q2, it’s more likely to be sort of at that structural hold number of 9% or better, depending on how things go for the playoffs in NBA and NHL.”
Maine frustration remains
Another state where the Hollywood brand synergy could work well is Maine, but Penn is not guaranteed a license in the state despite operating one of only two retail casinos.
Gov. Janet Mills allowed an online casino bill to pass into law that gives the state’s four tribal entities licenses to partner with outside operators. For sports betting, three of those tribes are partnered with Caesars while DraftKings holds the fourth license.
There is a lawsuit pending over the bill brought by the state’s other casino operator, Churchill Downs, as well as a possible People’s Veto that the National Association Against iGaming said it would pursue. The state, meanwhile, hopes online casinos could be operating by the beginning of 2027.
Penn’s reinvestment in its Maine casino will depend on how the online casino situation settles.
“We’re obviously not happy with how that was put together in Maine as one of the two land-based operators who have paid hundreds of millions of dollars in taxes and invested a lot of money and employ a lot of Mainers in the state,” Snowden said. “If that does end up being implemented the way that it was proposed, you can expect PENN to be investing next to zero in the state of Maine going forward.”
