PENN Entertainment Reports $865 Million Net Loss, Realigns Digital Strategy After ESPN Exit

The significant net loss was primarily due to massive impairment losses totaling $825.0 million, which were entirely recorded within the Interactive segment. Consolidated Adjusted EBITDA was $194.9 million. The company repurchased 7,965,282 shares for $154.1 million during the quarter. PENN ended Q3 with $660.1 million in cash and total net traditional debt of $2.2 billion.

Interactive Segment Drives Losses and New Direction

The Interactive segment saw a tumultuous quarter. It generated $297.7 million in revenue, including $139.5 million in gross tax-related figures. Critically, the segment posted an Adjusted EBITDA loss of $(76.6) million.

CEO Jay Snowden stated that the segment’s revenue and Adjusted EBITDA loss were below expectations due to customer-friendly volatility and lower-than-anticipated online sports betting (OSB) volumes.

Following the quarter, PENN and ESPN mutually agreed to end their OSB partnership early on December 1, 2025. This prompted a massive digital realignment. PENN will pivot its main focus to its iCasino business and its Canadian operations, utilizing the theScore Bet brand for its U.S. OSB offering starting December 1, 2025.

This aims to replace fixed media spending with more effective, performance-based marketing that leverages the retail casino footprint.

Retail Operations Provide Stability and Growth

The company’s retail business remained the core source of profitability. The Retail Property Level generated $1.4 billionin revenue and Segment Adjusted EBITDAR of $465.8 million, achieving a stable margin of 32.8%. Cash payments to REIT Landlords for Triple Net Leases amounted to $241.9 million.

Snowden noted that demand in the core retail business was generally stable across gaming and non-gaming amenities, especially at properties not facing new competitive supply. The company benefited from the August 11 opening of the new Hollywood Casino Joliet location.

This opening resulted in a 42% increase in the active customer database compared to Q2, driven by new customer acquisition and significant reactivation of dormant players. PENN is also investing in property development, including the scheduled opening of a second hotel tower at M Resort Spa Casino Las Vegas on December 1, 2025.

iCasino Forward Strategy

PENN’s new strategy is described as “iCasino forward.” The North American iCasino business achieved its highest quarterly gaming revenue to date, growing nearly 40% year-over-year. This growth was driven by a record cross-sell rate of 62% from the OSB segment.

The OSB product (theScore Bet) will now primarily serve as a top-of-funnel acquisition tool to drive customers into the Hollywood-branded iCasino, which will be offered as a standalone app and integrated into the sportsbook.

This strategy aims to reinforce the omnichannel advantage and link the digital business to the 33 million member PENN Play™ loyalty program.

Customers using both retail and digital channels have historically generated six times higher value and three times better retention than single-channel customers.