Penn Entertainment Revenue Dragged Down by Slow ESPN Bet Performance

Article by : Erik Gibbs May 7, 2024

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Penn Entertainment recently reported a loss of $115 million in the first quarter, attributed to factors like adverse weather conditions and underperformance in online sports betting.

Despite this setback, the company has announced a strategic overhaul to revitalize its presence in the online gambling market.

As part of its strategy, Penn rebranded its online sports betting arm as ESPN Bet in collaboration with ESPN. However, this move didn’t prevent a slight year-over-year revenue decline, with quarterly revenue dropping to approximately $1.61 billion compared to the previous year’s $1.67 billion.

Nevertheless, there were positive indicators such as a significant increase in online gambling monthly active users, rising by 152% to reach 685,000 in the first quarter of 2024 compared to the same period in 2023.

One of the challenges Penn faced was lower-than-expected spending on ESPN Bet, attributed to factors like the influx of new bettors and existing limitations in features. However, the company plans to address these issues by enhancing features later in the year.

Looking ahead, Penn aims to expand its offerings with the launch of a standalone Hollywood Casino iGaming app and inaugurated its first ESPN Bet-branded retail sportsbook operation at Hollywood Casino in Detroit’s Greektown on April 25.

Moreover, Penn appointed Aaron LaBerge, former CTO for Disney Entertainment and ESPN, as its Chief Technology Officer, highlighting its commitment to enhancing digital experiences and maximizing its ESPN partnership.

“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,” said Snowden.

Integration with ESPN’s media platforms is a key aspect of Penn’s growth strategy. Among other initiatives, Penn plans to implement linked user accounts and promote betting odds within the ESPN app.

In addition, Penn is gearing up for the launch of ESPN Bet in New York, positioning itself to compete with industry giants like DraftKings and FanDuel. CEO Jay Snowden emphasizes Penn’s competitive stance and aims to establish the company as a major player in the online sports betting landscape.

Despite certain challenges, Penn Entertainment’s strategic repositioning and partnership with ESPN demonstrate a commitment to navigating the online sports betting landscape. With a focus on innovation and leveraging ESPN’s reach, Penn is poised for growth in the competitive online gambling market.