PENN Entertainment told investors on Monday that its interactive unit will post a lower-than-expected third-quarter loss, crediting a strong hold and profitable parlays for the outlook adjustment.
In a filing with the Securities and Exchange Commission, the operator said its PENN Interactive digital gaming business will post a loss of $90 million to $100 million for the September quarter, approximately $30 million better than the originally expected loss of $115 million to $135 million.
The improvement was primarily down to “better than expected hold, driven by a higher parlay mix from our improving product and lower promotional expenses,” the company wrote.
Overall, PENN said online sports betting and iGaming account for 75% of its total digital revenues. The remaining quarter is split between retail betting, PENN’s media business and games studios and its market access deals with other operators.
PENN is scheduled to release its full third-quarter results on Nov. 7.
ESPN Bet showing good growth, says PENN
Meanwhile, at an investor event at M Resort & Casino in Henderson, Nev. on Monday, PENN executives told shareholders and analysts that ESPN Bet is moving healthily out of the summer.
ESPN Bet has accrued 1.8 million users since it first became available last year, contributing an 85% uptick in PENN’s total customer base.
The joint-venture brand’s gross gaming revenue is up 151% year over year and its monthly unique users have surged 161%. Coming back to the parlays topic, ESPN Bet has seen a 211% jump in parlay bettors, its parlay mix has risen by 608 basis points year over year and its hold rate has increased by 430 basis points. PENN’s hold rate has increased from 6.7% to 9% since ESPN Bet launched in November 2023.
ESPN Bet’s outlook has been boosted by the fact it finally went live in New York at the end of last month, where PENN said it has so far seen “strong to-date New York cohort vs. existing states.”
For the company’s first few days of operation in the Empire State, average daily handle per bettor was 296% higher in New York than in its nationwide average, while New Yorkers deposited double the average, per the PENN presentation. ESPN Bet took $3 million in bets across its first three days of operation, according to the New York State Gaming Commission.
PENN anticipates further positivity from ESPN Bet as it looks toward the effects of the direct integration between the ESPN media platform and the sportsbook. Users can add to their bet slip directly from the ESPN and theScore apps and, before the NBA season tips off on Oct. 22, ESPN and ESPN Bet accounts will be synced to provide an all-in-one experience.
