PENN Entertainment operates four gaming facilities in Ohio and an online sportsbook, all of which are performing well enough. Despite that, rumors have swirled about the possibility of PENN selling some of its business.
If that were to happen, it could dramatically impact the Ohio sports betting market and several Ohio casinos. PENN discussed the future of its Ohio gaming properties during a recent Q2 2024 earnings call.
PENN announces ESPN Bet debut for 2 Ohio casinos
As PENN Entertainment executives flew through their Q2 2024 earnings presentation, the Ohio gaming market was prioritized more than others. The brand has a large presence in the Buckeye State thanks to its casino gaming and sports betting offerings.
PENN Entertainment operates four retail locations in Ohio through the Hollywood Casino arm of the company. Those properties are:
- Hollywood Casino Columbus
- Hollywood Casino Toledo
- Hollywood Gaming at Dayton Raceway
- Hollywood Gaming at Mahoning Valley Race Course
Through those four locations, PENN Entertainment reported a 5.1% year-over-year increase in gross gaming revenue in the second quarter of 2024.
Additionally, PENN’s sportsbook ESPN Bet is active in Ohio retail settings and online. ESPN Bet rebranded from Barstool Sportsbook back in Nov. 2023 after announcing the relaunch last August.
Hollywood Casino Columbus & Toledo to debut ESPN Bet in September
PENN is currently rebranding the sportsbooks inside Hollywood Columbus and Hollywood Toledo as ESPN Bet. The sportsbooks, which are projected to be completed in September, will feature dining options and premium sports viewing areas.
On the mobile side, ESPN Bet is still working to gain market share in Ohio and beyond. In June, ESPN Bet took $19.9 million of wagers which represented just under 4% of the statewide total. Those bets generated $1.7 million in taxable revenue. For context, DraftKings led Ohio sports betting operators by taking 35.2% of statewide bets.
To help ESPN Bet grow, PENN is investing in the ESPN Bet app and working to better integrate it with ESPN’s digital properties. Here are a few improvements to expect:
- Home page improvements
- Parlay carousel functionality
- Dark Mode
- A referral program
- Early win payouts
Additionally, ESPN Bet will be more deeply integrated with ESPN’s own mobile app so expect to see more ESPN Bet betting lines when checking what games are on that night.
PENN sheds light on betting surcharges & future business
There are two hot topics in the gaming world that involve PENN Entertainment in some way.
The first comes from a decision made by DraftKings to place a surcharge on players’ winnings if the state has a tax rate above 20%. DraftKings has since renounced that plan, but players and gaming regulators are waiting to see if fellow operators like ESPN Bet will attempt something similar.
PENN Entertainment Chief Executive Officer and President Jay Snowden noted during the Q2 earnings call that the company is aware of the decision made by DraftKings, but will not add a surcharge at this time. Snowden did not rule out the change in the future though, saying:
“[DraftKings’ decision to implement a surcharge] was unexpected from our perspective, but definitely interesting. When you think about PENN’s view on this, you should expect us to be observers. We have a lot going on in front of us right now over the coming quarter. So, I would say when you’re talking about a potential tax surcharge in early 2025, that’s not even on our radar. I hesitate to never say never, but it just means that we’re really focused on continuing to improve the products, continuing to drive top of funnel and loyalty and retention. And so, we would not be a first mover on something like that. We’re going to stay very close to it. We’ll observe, we’ll see what the reaction is assuming that it does launch in early ‘25. And then we’ll probably have more to share with all of you on our quarterly earnings calls throughout 2025.”
The second topic is the rumors that PENN Entertainment could sell some of its business. Snowden said the company will not comment, but he is very confident in its strategy moving forward:
“We haven’t commented and won’t comment on market rumors and speculation. What I will say is that as a company and as a board, we always have and always will evaluate opportunities to enhance value and will continue to take actions that we believe are in the best interest of the company and our shareholders. With that said, we’re very confident in our strategy and the value that it’s going to deliver for shareholders over the short-term, medium-term and long-term. So that’s the way I would answer that question. And I would say don’t believe everything you read. And . . . just remember that our assets, our land-based assets are all part of different leases. So, it’s not as simple and easy as you just sell off an asset . . . I’m just going to leave it at that.”
