PENN Q3 online EBITDA losses widen YoY to $90m as bosses talk up product plans
Company behind ESPN Bet has seen flat revenue for the first nine months of the year compared to when it ran the Barstool Sportsbook product in the US
PENN Entertainment’s online adjusted EBITDA loss hit $90.9m (£69.6m) for Q3 2024 as bosses said there was “encouraging” performances year on year (YoY) across online sports betting and online casino.
Adjusted EBITDA loss on the online arm, which encompasses ESPN Bet and the Hollywood Casino brand, rose from $50.2m in Q3 2023, or 81.1%.
PENN Entertainment launched ESPN Bet in mid-November 2023 as it replaced the Barstool Sportsbook with its new offering.
Promo expenses and adjusted EBITDA losses have rocketed upwards in the past 12 months, although the Pennsylvania-based company is looking to shrink those as soon as possible.
Revenue for the online division jumped 24.6% YoY from $196.3m to $244.6m, as bosses said product improvements had driven a higher parlay mix and sportsbook hold in turn.
Parlay mix as a percentage of handle for September landed at 28.3%, compared to 22.5% in September 2023, while hold in the same month was 9.4% versus 5.3% last year.
PENN Entertainment said: “Product improvements helped drive a material increase in our parlay mix to kick off football season, which in turn has resulted in higher structural hold.”
After launching in New York on 27 September, the business said the average daily handle per user was 228% higher than that in its existing states.
Additionally, the average deposit size in the Empire State is 87% greater than those in ESPN Bet’s other states.
Looking at data from October disclosed in the group’s investor deck, hold was negatively impacted and landed at 5.4% due to customer-friendly sports betting results.
The operator added average monthly active users across ESPN Bet spiked 127% YoY from 189,000 in Q3 2023 to 429,000 this year.
The business also pointed to Sensor Tower data, which ranked ESPN as the number three sportsbook in the US with a 16% user share.
Last week, PENN Entertainment confirmed account linking between ESPN Bet and ESPN had gone live, while over the next two quarters it hopes to improve the same game parlay experience, enhance branding and upgrade in-play betting.
On the igaming front, a standalone Hollywood Casino app is slated to go live in Pennsylvania in Q1 2025.
Operationally, PENN Entertainment stated Hollywood casino reported “solid growth” in the third quarter.
Monthly average users were up 233% YoY for the quarter, while GGR and NGR rose 53% and 63%, respectively.
Year-to-date revenue for PENN Entertainment’s online arm came in at $684.9m, down slightly against $687.3m for the same period last year when the business operated the Barstool Sportsbook.
Adjusted EBITDAR losses have also soared, climbing from a negative $68.7m in 2023 to $389.7m this year.
Jay Snowden, PENN Entertainment CEO, said: “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. The September launch of ESPN Bet in New York expanded our online sports betting footprint to 19 US states, providing greater scale as we leverage ESPN’s vast media reach for efficient customer acquisition.
“Our progress continued through October with encouraging year-over-year performance across our online sports betting and icasino operations. We remain excited for additional product enhancements coming soon as we deliver on our product roadmap,” he added.