Penn Entertainment CEO and president Jay Snowden has insisted that ESPN Bet has laid a foundation for success after its first period of operation drove “higher than expected promotional expense.”
Snowden said ESPN Bet “attracted significantly more first-time depositors than we anticipated,” resulting in an adjusted EBITDA loss of $333.8m.
However, Snowden said ESPN Bet’s revenues of $31.5m, incorporated into Penn’s Q4 results, are a sign of promise.
“Our successful launch led to substantial expansion in key performance indicators including monthly active users, handle and cash handle,” he said.
“Importantly, strong early retention and consistent user acquisition have led to steady month-over-month increases in cash handle as our promotional expense has started to normalise entering 2024.
“ESPN BET has also attracted the mass market sports fan, highlighting the potential to expand the appeal of sports betting and grow the overall market. This foundation sets the stage for continued growth and market share gains as we introduce further product enhancements and deeper integrations into the ESPN media ecosystem.”
Snowden added that Penn is looking forward to launching ESPN Bet in North Carolina and New York, which will take its online sports betting US population from 37 per cent to 46 per cent and “significantly expand our reach and scale.”
Penn rebranded its Barstool Sportsbook to ESPN Bet through a $1.5bn deal with the US media giant, with the relaunch taking place in mid-November.
Overall, Penn reported revenue of $1.4bn in Q4, down from $1.59bn in Q4 2022, posting an overall loss of $358.8m after recording $20m in net income for Q4 2022.
Adjusted EBITDA fell to a loss of $39.6m, down from $438.3m in Q4 2022.
However, Snowden said 10 properties across Penn’s portfolio “achieved their highest ever fourth quarter revenue, demonstrating the benefits of our geographic diversity and unique omnichannel strategy.”
He added: “In the quarter, we expanded our Penn Play database by 1.2 million members, with 90 per cent of this growth coming from our ESPN BET customers.
“In addition, we will rebrand Greektown’s market-leading sportsbook to ESPN BET this spring – in time for the Detroit NFL draft – and we look forward to potential additional ESPN BET retail launches at key properties as we continue to create meaningful cross-sell opportunities.”
