PENN records $196m Q1 online loss despite record icasino handle
New York-listed company also reported an 11% loss in revenue after a difficult start to the calendar year
PENN Interactive has recorded a significant adjusted EBITDAR loss of $196m for Q1 2024 and a downturn in revenue which bosses blamed on “lower-than-expected hold and spend per user.”
As shown in PENN Entertainment’s Q1 report, the company’s interactive arm reported revenue of $207.7m in the first three months of the year, down 11.1% year on year (YOY) from Q1 2023 revenue of $233.5m.
Alongside the revenue dip, adjusted EBITDAR losses for the interactive arm soared to $196m, a marked contrast to Q1 2023’s loss of $5.7m.
Those figures include all of PENN’s online sports betting and online casino operations, driven by ESPN Bet, theScore Bet, and Hollywood Casino.
The results sent PENN’s share price falling by more than 6% to $15.35, at the time of writing.
Elsewhere, ESPN Bet’s average monthly users were down significantly from Q4 2023, with the operator recording 685,000 customers in Q1 2024. That represents an 11.2% decline from Q4, when actives stood at 771,000 after ESPN Bet launched in mid-November.
However, active customers were up significantly compared to Q1 2023, when the figure totaled 272,000, amounting to a 152% YOY leap.
According to Sensor Tower data, ESPN Bet still sits in third place against its competitors DraftKings and FanDuel in terms of weekly active users.
The average handle per monthly active user also decreased in the first quarter of 2024. PENN attributed the drop mainly down to a lower share of wallet from gaps in ESPN Bet’s product that have already been identified.
One standout feature of PENN’s Q1 results was icasino, with record handle and GGR confirmed during the first three months of the year.
Online casino monthly actives were up 166% YOY while the vertical’s GGR improved 32% in Q1 2024 compared to the same period a year prior.
In terms of online sports betting for Q1, handle was up 96% YOY with GGR rising 51% YOY. However, both metrics were down compared to Q4.
While ESPN Bet underperformed against its competitors in terms of hold, a marked improvement of 8.5% has already been seen in the opening exchanges of Q2 2024 compared to 4.4% in Q1.
Addressing the firm’s online operations in Q1, PENN president and CEO Jay Snowden said: “ESPN Bet continues to drive strong top-of-funnel demand due to the reach and affinity for the ESPN brand, which led to record online sports betting handle and icasino gross gaming revenue in the quarter.
“However, Interactive segment results were negatively impacted primarily by unfavorable hold from major sporting events.”
Snowden went on to address the recent appointment of Aaron LaBerge as PENN’s chief technology officer, adding that the new CTO has been tasked with accelerating technology and product improvements.
The CEO continued: “In his [LaBerge] new role, he will be responsible for driving technology strategy and execution for PENN, while leading a multinational team of technologists and serving as the key business leader for the company’s interactive division.
“We are incredibly excited about the arrival of Mr LaBerge, who is uniquely qualified to help us create a best-in-class digital experience for our customers while further deepening our connections and integrations with ESPN.”
Quarter 1 brought about notable product highlights, including three new icasino games launched by PENN game studios as well as adding live stat tracking to the ‘My Bets’ page on the ESPN Bet app.