Earnings call transcript: PENN Entertainment misses Q1 2025 earnings forecasts

PENN Entertainment (market cap: $2.37 billion) reported its financial results for Q1 2025, revealing a miss on earnings expectations with an EPS of -$0.25 compared to the forecasted -$0.19. The company’s revenue also fell short, coming in at $1.67 billion against a $1.71 billion forecast. Despite these setbacks, the company showed strength in its retail segment and continued improvements in its Interactive division. The stock saw a slight decline of 0.32%, reflecting investor concerns over the earnings miss. According to InvestingPro data, PENN has not been profitable over the last twelve months, with analysts watching closely for signs of improvement.

Key Takeaways

• PENN Entertainment missed EPS and revenue forecasts for Q1 2025.
• Retail revenue remained robust, contributing $1.4 billion.
• Interactive segment losses improved significantly year-over-year.
• The stock declined by 0.32% following the earnings release.

Company Performance

PENN Entertainment demonstrated resilience in its retail operations, generating $1.4 billion in revenue. The company also reported a notable improvement in its Interactive segment, with a year-over-year reduction in EBITDA losses. Despite these positive aspects, the company faced challenges that resulted in a miss on both EPS and revenue forecasts. InvestingPro analysis reveals the company operates with a significant debt burden, with a debt-to-equity ratio of 3.93x and current ratio of 0.82x, indicating potential liquidity challenges.

Financial Highlights

• Revenue: $1.67 billion, down from the forecast of $1.71 billion.
• EPS: -$0.25, missing the forecast of -$0.19.
• Adjusted EBITDAR: $457 million with a margin of 33.1%.
• Total liquidity: $1.5 billion, with cash and cash equivalents of $592 million.

Earnings vs. Forecast

PENN Entertainment reported an EPS of -$0.25, which was below the forecasted -$0.19. The revenue of $1.67 billion also fell short of the expected $1.71 billion. This represents a significant earnings miss, which is larger than in previous quarters and contributed to the negative market reaction.

Market Reaction

Following the earnings release, PENN Entertainment’s stock price decreased by 0.32% to approximately $15.66. This movement reflects investor concerns over the earnings miss, despite strong retail performance and improvements in the Interactive segment. With a beta of 1.81, PENN’s stock has shown significant volatility, and InvestingPro data indicates the stock has fallen over 23% in the past six months. Subscribers to InvestingPro have access to 12 additional key insights about PENN’s financial health and market position, along with comprehensive valuation metrics and analyst forecasts.

Outlook & Guidance

Looking ahead, PENN Entertainment expects continued improvements in its Interactive segment, targeting positive EBITDA by Q4 2025 and full profitability in 2026. The company also plans to expand its digital offerings through its partnership with ESPN and is monitoring potential iGaming opportunities in Ohio.

Executive Commentary

CEO Jay Snowden expressed optimism, stating, "We are nearing an inflection point and anticipate each quarter of 2025 to deliver a lower loss sequentially." CTO Aaron LaBerge highlighted the digital strategy, noting, "There is no better place to come play fantasy and bet your team than ESPN and ESPN Bet."

Risks and Challenges

• Earnings performance: Continued earnings misses could impact investor confidence.
• Weather-related disruptions: Such challenges affected EBITDAR by $10 million in Q1.
• Interactive segment losses: While improving, these losses remain a concern.
• Market competition: Increasing competition in the digital gaming space.
• Regulatory changes: Potential changes in gaming regulations could impact operations.

Q&A

During the earnings call, analysts inquired about the integration with ESPN and strategies for digital marketing. The company addressed these queries by emphasizing its focus on leveraging the ESPN partnership and exploring new market opportunities.

Full transcript - PENN Entertainment Inc (PENN) Q1 2025:

Emma, Conference Operator: Greetings, and welcome to Penn Entertainment First Quarter twenty twenty five Earnings Call. I would now like to turn the conference over to Joe Jaffoni, Investor Relations. Please go ahead.

Joe Jaffoni, Investor Relations, Penn Entertainment: Thanks, Emma. Good morning, everyone, and thank you for joining Pan Entertainment’s twenty twenty five First Quarter Conference Call. We’ll get to management’s presentation and comments momentarily as well as your question and answer. During the Q and A session, we ask that everyone please limit themselves to one question and one follow-up. I’ll quickly review the Safe Harbor and then we’ll get and then we’ll get right into the call.

Please note that today’s discussion contains forward looking statements. Forward looking statements involve risks, assumptions and uncertainties that could cause actual results to differ materially. For more information, please see our press release for details on specific risk factors. It’s now my pleasure to turn the call over to the company’s CEO, Jay Snowden. Jay, please go ahead.

Jay Snowden, CEO, Penn Entertainment: Thanks, Joe. Good morning, everyone. I’m joined here in Wyoming by our CFO, Felicia Hendrix our Head of Operations, Todd George and our CTO and Head of Interactive, Aaron LaBerge, as well as other members of our senior executive team. As you see in our earnings release and accompanying investor presentation, Penn Properties demonstrated strong resilience in the first quarter following severe weather challenges. While January weather was slightly better year over year, it was still much worse than anticipated, and the weather impacted days in February across the portfolio were up over three times versus last year, which ultimately impacted our adjusted retail EBITDAR by at least $10,000,000 in the quarter.

Also worth noting, we had a $5,000,000 1 time accounting benefit in the South Region in Q1 last year that impacts year over year results. Importantly, we saw gaming volumes rebound nicely in March as the weather improved, and that trend continued through April and into May. Worth also noting, this past weekend was the second best weekend of the year for revenue, and number three in terms of overall visitation across the portfolio. You’ll hear more about our second quarter trends from Todd in a moment. The capital investments we have been making at our properties over the last several years, including our new ESPN Vet retail sports books, combined with continued cross sell from our industry leading customer loyalty program, have been contributing to our performance and the strong engagement this quarter with our VIP and Midworth customer segments.

As highlighted on slide seven, during the quarter, we announced plans for a new land based Hollywood Casino in Council Bluffs, Iowa to replace our existing three level aging riverboat. The new state of the art facility will nicely complement the existing 160 room hotel, and we believe it will significantly improve the customer experience and enhance the property’s competitive position in the greater Omaha, Nebraska market. Construction is expected to take approximately eighteen to twenty four months following the design and permitting approval process. Meanwhile, our four previously announced exciting development projects remain both on budget and on schedule. Before turning to our interactive results, I’d like to ask Todd to share a few comments on the second quarter trends as well

Todd George, Head of Operations, Penn Entertainment: as the competitive landscape. Thanks, Jake. As highlighted on Slide six in our investor presentation, our retail business in April was stable with revenue growth of 2% year over year across all properties and 4% across all properties, excluding those impacted by new supply. We’re mindful of the uncertain economic environment that our customers are facing, but are encouraged by the trends we have seen, including our rated play being up in the quarter and continuing into April and now May. Whereas Jay mentioned, we just had one of our top weekends.

Unrated play saw a slight decrease in Q1 compared to prior year, but returned to almost flat in April when compared to prior year. The Q1 and Q2 results to date have been driven by increases in our core segments through increased spend per visit and our VIP segments driven by increased visitation and spend per visit. Our database continues to grow to over 32,000,000 members through a combination of online and core operations, all fueling our omnichannel strategy. Our property teams have done a tremendous job navigating the competitive landscape while also picking up market share in 14 of our 17 markets not impacted by meaningful new supply year over year in Q1. As Jay mentioned, over the last several years, we’ve made strategic investments in our properties, enhancing the entertainment and hospitality amenities, improving the guest experience through technology that removes friction and costs, and continuing to focus on our gaming offerings.

We remain committed to providing highly competitive gaming offerings in each of our markets, including new and expanded high limit areas, Asian themed rooms, and the latest and most popular games. This constant focus on improving the guest experience is done with an eye towards efficiency as we continue to deliver the highest tax adjusted retail gaming margins among our regional peers. As we think about our margins, we’re laser focused on generating returns on all of our spend, particularly in light of headlines around the impact of tariffs. To date, we have not seen a material impact on the cost side. Notwithstanding this, we have a tremendous procurement team that is helping us navigate pricing and supplier options as well as excellent marketers and F and B operators who are adjusting promotions and F and B offerings to mitigate cost increases.

Looking ahead, following the opening of new competition this February in Bossier Shreveport, we can now focus our attention on our four growth projects opening over the next twelve months, which we could not be more excited about. Back to you, Jay.

Jay Snowden, CEO, Penn Entertainment: All right. Thanks, Todd. As you’ll see on slide nine, we are reaping the benefits of our omnichannel strategy as our pre existing customers in Pennsylvania and Michigan who engaged with our standalone Hollywood iCasino app are increasing their spend across both retail and online channels. In Pennsylvania, for example, in Q1, we saw year over year increases of 21% in retail theoretical play, and 165% in online theoretical play with the same cohort. Similarly, in Michigan in Q1, we saw year over year increases of 27% in retail theoretical play and 242% in online theoretical play.

During the quarter, our interactive segment had a negative $10,000,000 EBITDA impact from the well publicized customer friendly sports betting outcomes in the quarter during March Madness. Despite this, we generated record gaming revenue and significant year over year improvements in both adjusted revenue and adjusted EBITDA, highlighting the improved flow through we are seeing in our business. ESPN Bet and the Score Bet continue to drive strong top of funnel performance, including successful cross sell into our iCasino business, which achieved record NGR and average MAUs in Q1. As highlighted on slide 13, this momentum is bolstered by the compelling early results of our standalone iCasino app in Pennsylvania and Michigan, and which recently expanded into New Jersey and Ontario. We’re also encouraged to see that 70% of our standalone iCasino theoretical revenue is coming from incremental sources, including newly acquired customers, digitally reactivated players, and players who were previously retail only customers.

This stat, along with the omnichannel results we highlighted earlier, suggests that we are seeing minimal cannibalization from our standalone iCasino offering on retail play and on our integrated iCasino in the ESPN Bet and the Score Bet apps. Our standalone iCasino app has also seen 134 basis points higher hold rate versus the integrated iCasino offerings, driven by higher slot mix. Turning to slide 14, we recently introduced several OSB product enhancements, including new features leveraging account linking, such as adding ESPN favorites to the app homepage and creating our new Mint Club rewards program. This program offers players who have linked to their accounts access to special weekly giveaways, including boosts and deposit bonuses, as well as access to free ESPN Bet merchandise. And we have plans for even greater benefits for linked customers later this year, particularly around fantasy football.

Aaron and his team have done a tremendous job building upon our strong technology foundation, which will be further enhanced by the recent addition of Billy Turchen as our new Chief Product Officer. Billy brings a wealth of experience to Penn, having most recently served as SVP of Product at FanDuel. He will lead the product teams overseeing our digital sports betting, sports media, and iCasino gaming experiences. And with that, I’ll turn it over to Felicia.

Felicia Hendrix, CFO, Penn Entertainment: Thanks, Jay. For the first quarter, we reported retail revenue of $1,400,000,000 and adjusted EBITDAR of $457,000,000 and adjusted EBITDAR margins of 33.1. As Jay mentioned, our Retail segment showed strong resilience during the quarter despite the impact of new supply in key markets and some severe weather challenges, which impacted adjusted retail EBITDAR by at least $10,000,000 As the weather subsided, retail performance returned to business as usual and that momentum continued into April and May. We are mindful, however, that the consumer and many of our suppliers are facing uncertainty. We have operated in uncertain times before and have experience with mitigating both slowing volumes and cost pressures if we are to face those consumer dynamics again.

As we’ve highlighted in the past, we estimate that approximately 45% revenue declines can be offset through cost reductions, inclusive of being flexible with labor and marketing. Regarding costs, Todd highlighted that our tremendous procurement team is working hard to insulate us from tariff related cost pressures on the COGS side of our business. This is the same team that has saved us tens of millions of dollars in COGS over the past several years despite a sharp increase in inflation due in part to the advantages of our scale. Moving to Interactive. We reported first quarter adjusted revenues excluding the skin tax gross up of $162,000,000 and interactive adjusted EBITDA of a loss of $89,000,000 which is a $107,000,000 improvement year over year.

Customer friendly sports betting outcomes impacted interactive adjusted revenue by 15,000,000 and adjusted EBITDA by $10,000,000 Corporate expense was higher than expected in the quarter given legal and advisory related costs of $7,700,000 We will likely incur incremental legal and advisory costs in the second quarter. However, it is difficult to project these nonrecurring expenses at this time. In the quarter, we reported $15,000,000 pretax gain on a financing arrangement that we entered into in February 2021 with a third party, which provided the company with upfront cash proceeds while permitting us to participate in future proceeds on certain claims. This arrangement, which was booked as debt on our balance sheet, was resolved and resulted in the gain, which includes cash received in 2021 of $72,500,000 and noncash interest accreted since that time of $143,000,000 The table on Page eight of our earnings release summarizes our cash expenditures in the quarter, including cash payments to our REIT landlords, cash taxes, cash interest and total CapEx. Of our total $125,000,000 of CapEx in the quarter, dollars 96,000,000 was project CapEx related to our four development projects.

We ended the first quarter with total liquidity of $1,500,000,000 inclusive of $592,000,000 in cash and cash equivalents. We delevered in the quarter and expect to continue our deleveraging trajectory in 2025 and beyond. Year to date, we have repurchased $35,000,000 of shares at an average price of $16.83 As we delever throughout the year, you should expect to see the magnitude of our share repurchases increase, particularly in the back half of this year. You should also expect us to consider combining opportunistic repurchase activity with the programmatic approach to seek to take advantage of market volatility and what we view to be a severely dislocated stock price. Our 2025 retail guidance is unchanged from the ranges and drivers we provided on our fourth quarter earnings call.

For Interactive, our 2025 revenue and EBITDA ranges are also unchanged other than the flow through of the customer friendly sports betting outcomes of $15,000,000 to revenues and $10,000,000 to EBITDA. We continue to forecast a skin tax gross up of $520,000,000 for the year. For the second quarter, our interactive revenue guidance range is $280,000,000 to $320,000,000 including a $116,000,000 skin tax gross up, and our EBITDA guidance range is a loss of $70,000,000 to a loss of $50,000,000 Our second quarter Interactive EBITDA guidance represents a year over year improvement of roughly $43,000,000 at the midpoint. As our second quarter Interactive guidance demonstrates, we continue to expect each quarter of the year to generate lower Interactive EBITDA losses sequentially, culminating in positive EBITDA in the fourth quarter. And we reiterate our outlook for generating positive interactive EBITDA in 2026.

Last quarter, we provided you with other segment EBITDA guidance of $121,000,000 which includes corporate expense. Given the current uncertainty regarding our nonrecurring legal and advisory fees, we are not updating guidance for this segment at this time. As Jay mentioned, our four growth projects are on time and on budget. We continue to forecast total company CapEx for 2025 of $730,000,000 and reiterate our full year project CapEx forecast of $490,000,000 We do not expect to experience any noteworthy tariff related CapEx increases on the four growth projects as they are near completion. With the Joliet opening around the corner, we continue to evaluate drawing on GLPI’s balance sheet as a financing option for the project.

As a reminder, GLPI has committed up to $130,000,000 of Joliet’s total $180,000,000 CapEx at a cap rate that is a spread to GLPI’s cost of capital at this time. Jay also mentioned our exciting plans for the new Hollywood Casino in Council Bluffs, Iowa. The estimated project budget is approximately 180,000,000 to $200,000,000 and GLPI has agreed to provide funding of up to $150,000,000 at a cap rate of 7.1, which may be structured at Penn’s option as either rent or a five year term loan. Given the potential for construction costs to rise due to increased tariffs, particularly on steel, we are currently evaluating opportunities to lock in costs now and exploring other ways to minimize our exposure to potential cost increases. For 2025, net cash interest expense, we continue to forecast $150,000,000 Net cash taxes are expected to be roughly $70,000,000 that’s $70,000,000 We continue to expect to be free cash flow positive in 2025 and beyond, and our basic share count at the end of the quarter was 151,000,000 shares.

And as I always mentioned, we typically have 15,000,000 of dilutive shares annually, inclusive of the 14,000,000 share dilution from the converts. And I’ll turn it back to Jay.

Jay Snowden, CEO, Penn Entertainment: All right. Thanks, Felicia. In closing, I want to reiterate that our core retail business remains strong and is growing. We have four exciting retail development projects under construction, all being delivered on or ahead of schedule and on budget. Along with our planned land side relocation of Ameristar Council Bluffs, these projects will collectively enhance our portfolio, grow our free cash flow profile and serve as a catalyst for Penn’s retail segment.

Despite the current market concerns around consumer discretionary behavior, our core business is trending in the right direction. Solid employment numbers and low gas prices always build well for regional gaming as you know. Meanwhile, our digital business is continuing to evolve, supported by our well known brands, differentiated IP, a fully owned technology stack and newly recruited industry leading talent. We are nearing an inflection point and we anticipate each quarter of twenty twenty five to deliver a lower loss sequentially throughout the year and our Interactive division to be profitable in the fourth quarter of twenty twenty five and the full year of 2026 and beyond. We have strong conviction in our ability to deliver profitability in 2026 and beyond in this segment.

As mentioned on our last earnings call and in our shareholder letter in this year’s proxy, we have fully committed partners in ESPN who are continuing to work with us to deepen the integration of ESPN Bet into ESPN’s overall ecosystem. We have continued momentum in our iCasino business. And importantly, we maintain strategic optionality and control over our future as we head into 2026. Our focus for the balance of this year remains on operational execution in order to transform our strategic investments into consistent long term results and value for our shareholders. As we also stated in our recent letter to shareholders, we are confident that Penn’s best days are ahead, And we are moving with speed, discipline and determination to realize the full potential of this company for all of our shareholders.

And with that, we can please open the line for our first question, Emma.

Emma, Conference Operator: We will take our first question from Brent Montour with Barclays. Please go ahead.

Brent Montour, Analyst, Barclays: Good morning, everybody. Thanks for taking my questions. So first off, maybe just starting with digital, the outlook for that segment doesn’t seem like it’s changed all that much, But you had some serious emphasis on iGaming in the deck and market share for the OSB side has been trending a little bit below I believe plan. So when you think about those different pieces, how would you describe what’s changed under the surface for the rest of the year within digital within your guidance?

Jay Snowden, CEO, Penn Entertainment: Yes. Brian, I would say that generally, our assumptions that we put out last quarter for the year haven’t changed. If OSB comes in a little light of the share projection and online casino comes in a little bit ahead, we think that offsets are fine if that does happen. We’re optimistic that we’re going to continue to grow share in both online sports betting and online gaming between now and the end of the year. One may outpace the other, and that would be perfectly fine with us as long as we have momentum in both aspects of the business, then we feel comfortable with the guide that we put out for the full year.

Brent Montour, Analyst, Barclays: Okay. Thanks for that, Jay. And then just a follow-up on iGaming. I know it’s early. Clearly, it seems like you’re pretty happy with the launch so far.

How far away is that segment from being contribution positive? And maybe qualify the answer with how much you’re currently spending in your OSB promo budget to drive the cross sell that’s driving that momentum in iGaming today?

Jay Snowden, CEO, Penn Entertainment: Yes. I’ll attempt to answer it. Aaron, others can jump in here. I would say that we are pleased so far with the launch of our standalone Hollywood ICasino apps, particularly in Pennsylvania and Michigan, where we have land based properties with the same brand name. We have healthy retail businesses there.

As I mentioned at the beginning, these standalone iCasino apps have been really good for us in that they’re 70% incremental. So very little cannibalization from the Hollywood offering that was within the ESPN Bet app. And you should expect, as you would hear from not just us, but our competitors, that our margin profile within iCasino is obviously stronger than it is within online sports betting. And the promotional spend within sports betting, just by nature of the business and the competitive side of it, is higher than it is within iCasino as well. So, that dynamic, I think, will continue.

I would expect that the iCasino momentum will you’ll see more of that in the quarters ahead. We have, I think, some really good plans to continue to cross sell. I would say we’re pleased with cross sell, but there’s still a lot of opportunity there. If you compare the online sports betting audience within our ecosystem and how much is cross sold into iGaming compared to others in the space, there’s still opportunities for us to be more effective in that area. So I think overall at a high level, that’s where we’re at.

I think you should expect us to share more detail in terms of contribution margin profit within these segments in future quarters. We haven’t really offered that previously, but we’re happy with the progress so far.

Aaron LaBerge, CTO and Head of Interactive, Penn Entertainment: Yeah. I would just reinforce cross sell is continuing to ramp up. Just last week, we saw all time highs in our average weekly DAUs across our casino. And in terms of the promotional dollars, we’re seeing really effective promotion from our land based databases to drive people into iCasino, which has been very nice to see. And obviously, we will then moderate that with strategic reallocation from OSB into iCasino in states where we think it matters.

So we’re really happy with the trajectory so far.

Todd George, Head of Operations, Penn Entertainment: Yeah, I would just add to what Jay and Aaron shared. Really tremendous progress where we’ve got our VIP team, whether you’re working at a property or online. So they’re they’re driving people regardless of if they drive them to a property or online. That’s been, really well executed. And then really, you know, the the key, it’s not really the promotional dollars.

As Jay mentioned, it’s that rebranding to Hollywood. So it’s just ease of finding that online product. So it’s going from Hollywood to Hollywood. That’s been a tremendous help.

Brent Montour, Analyst, Barclays: Excellent. Thanks everybody.

Emma, Conference Operator: We’ll take our next question from Carlos Antalya of Deutsche Bank.

Carlos Antalya, Analyst, Deutsche Bank: Hey guys, thanks. So Jay, Todd, I don’t know whoever wants to take this one. If you think about normal cadence over the course of a year of seasonality, we come to a couple of conclusions, but I think important in kind of understanding yours is more or less recognizing the anniversary of some of the competitions that are coming off. So if you guys kind of maybe walk us through the next twelve to eighteen months of where you’ll start to lap some of the things that are maybe hurting you a little bit more pronounced than others.

Todd George, Head of Operations, Penn Entertainment: I’ll let you grab that time. Yeah. Thanks, Jay. So Carlo, the the last big one was obviously the live project in in Bossier City. So, you know, we’ll lap that in February of next year, but it it will be a little bit noisy for the for the next twelve months at least, just because of our projects starting to open.

I I feel very comfortable that, you know, within the next twelve to to fourteen months, say, twelve to thirteen months, I guess, now we’re in in May, we will have all of our our properties open. So, you know, the year over year comparisons are going to be a little bit little bit fuzzy just because of that. But for the most part, we started to lap, everything. We just did have an expansion in Nebraska in the last, I think, three, four weeks. We were just out there to to kinda look around at that market.

So those are the those are the two competitive impacts that we’ll see over the next year, but then we’ll be offsetting that with with our new openings.

Jay Snowden, CEO, Penn Entertainment: And we we feel, I think, really, really good about the timing of when we’ll be going landside in Council Bluffs, because the rest of the competition will have sort of settled in. And so, just look at the construction time frame, we’ll be coming into the market with a really new updated products, easier access to the casino, one level versus three levels, much more efficient. So both on the cost side as well as revenue opportunities to the upside. And that was all part of our license renewal in the state of Iowa with our QSO there. But feel good about what we have in front of us is largely in our control.

We’re going to be the one, the company that’s opening up new projects as opposed to trying to fight off new supply in key markets, which for the first time in a long time, we’ll be able to say that.

Carlos Antalya, Analyst, Deutsche Bank: Great. Thank you. And then just along those lines, two part question related to the pipeline. Obviously, some of the financing stuff is in place, but there’s also some called upon financing that you guys could pursue. Could you comment a little bit about how you’re thinking about the timing of that?

And also, how we should think about disruptions as we get closer to the openings, closure periods, things like that with some of the land based conversions?

Jay Snowden, CEO, Penn Entertainment: I’ll let Felicia hit the financing question. And Todd, you can speak a little bit about the disruption on openings.

Felicia Hendrix, CFO, Penn Entertainment: Yeah, Carlo, our view really hasn’t changed. We’ve really been trying to think about the financing as matching it to the openings. If we took financing today, for example, we’d be paying rent on a property that’s not open yet. So I would think about that in terms of matching. Obviously, we’re committed to the GLPI’s balance sheet for Aurora.

The other three projects, Joliet, M and Columbus, are at our discretion. And in addition to looking at the timing, we’re also looking at GLPIs, the cap rates that GLPI would be offering us versus what we could get in the open market versus using our balance sheet. So we have a lot of optionality around that. But I would say the first thing, the thing that we’re mainly focused on is that matching of timing.

Jay Snowden, CEO, Penn Entertainment: And one last point that was covered in our release is that Council Bluff is a little bit of a different potential structure. And so that can be either in the form of rents or as a five year term loan. So if we decide that it’s rents, then obviously, again, you’d wait until matching, taking the financing around openings. So you’re paying rent once you open the doors. But with the five year term loan, obviously, we could be starting to take the funding and financing in advance, well advance of the opening.

Todd George, Head of Operations, Penn Entertainment: And then, Carlo, to your question on disruption. So I would I would look at it this way. The Columbus Hotel as well as the, additional tower and meeting space at the end, minimal to zero disruption. I mean, it’s it’s simply adding a product, so no real disruption there. Even the Council Bluffs property, it’s it’s minimal downtime as we approach that.

And then the the only thing with Aurora and Joliet, please keep in mind, this is not just moving from a riverboat to land base. This is moving from a riverboat to a far better location with 10 to 12x the traffic counts that we currently see. So that downtime, if you look at what the other operators have been able to do in, in Illinois, you know, it’s looking at that two to three week period. We just had a a very, very productive meeting with the Illinois gaming board and really appreciate, all their efforts with us and the the leadership teams out there with with Ruben and Greg. We think we can get that time at the lower end of the range.

So I think you can start thinking about maybe a two week downtime, but more to come on that as we finalize the opening date.

Carlos Antalya, Analyst, Deutsche Bank: Great. Thanks, everybody.

Emma, Conference Operator: We’ll take our next question from Shaun Kelley with Bank of America.

Shaun Kelley, Analyst, Bank of America: Hi, good morning everybody. Thank you for taking my questions. For whoever wants to take it, maybe we could just start with kind of the digital promotional landscape. Just kind of curious on, first of all, the standalone iCasino app, did you all sort of lean in on the promotional level there just as you’re trying to get that product up and rolling? Or is that a little bit more organic?

And then just sequentially, as we think about sort of what you were offering in market 4Q and sort of what your expectations were, how did promos come in across both OSB and digital in this first quarter? Thanks.

Jay Snowden, CEO, Penn Entertainment: Yes. I would say promos have really kind of come in where we anticipated them to be both in sports betting and iGaming. And I would say for the industry as well as what we intended to do in the first quarter as it relates to what was going on in the fourth quarter of last year. And specifically, the iGaming, we really have focused in the early days of these standalone Hollywood iCasino app launches on organic cross sellable from sports betting, as well as from our retail database, and that’s been really effective. We’re just now starting to get into more of the performance based marketing spends.

And so that’s why we’re confident you’ll continue to see improved results as we move forward through the remainder of the year.

Shaun Kelley, Analyst, Bank of America: Great. Thanks, Jay. And then just as a follow-up and maybe switching over to the land based side. Just big picture, what to take right now to kind of get some cost leverage on the revenue side? What’s the sort of OpEx or run rate operating expense pressure you all are facing?

Is it sort of in the low single digit range? Just kind of where you’re feeling it? Obviously, you made some comments on tariffs. It doesn’t sound like you’re feeling much incrementally, but obviously, this has usually been something you’ve been really disciplined on and probably better than peers on.

Jay Snowden, CEO, Penn Entertainment: I think it’s largely labor is the one that’s continuing to be a bit of a creep, nowhere near the levels on a year over year basis, percentage wise, that we were seeing last year and the year before. But that’s the primary driver. I think we have a good handle on marketing’s within our control. Our procurement team, as noted by both Todd and Fleish, who does an excellent job. And there’s some we’re seeing a little bit of noise from a COGS perspective, but the teams are really creative, and you find alternative options to keep your pricing where it needs to be and make sure you’re not having to raise prices on consumers.

It’s one of the real benefits, I think, during times like now of regional gaming is, you know, you can walk in and our prices haven’t changed from last year or five years ago or ten years ago, whether you’re a gaming customer or a non gaming customer. So Todd, anything to add?

Todd George, Head of Operations, Penn Entertainment: Yeah. The only thing I would add, Sean, Jay and I and Felicia were talking about this yesterday. Keep in mind that, you know, our revenue mix when it, when we do more in the Northeast and Midwest than we do in the South and West, we have higher tax rates there. So there was a bit of a shift in in revenues in q one. So that did lead to a little bit of of margin erosion.

But, we think as we work through the weather, I think eight of the last ten weeks, we’ve seen year over year improvement in volumes and rated play. So and that’s been across the board. So as that kind of revenue mix comes back, we should be able to pick up the benefit there.

Jay Snowden, CEO, Penn Entertainment: That’s right. And I did note in the prepared remarks, but might as well hit it here again. We had a $5,000,000 accounting good guy in Q1 last year. So as you’re looking at the comparisons year over year, keep that in mind both in terms of EBITDA as well as margins in the South Region.

Shaun Kelley, Analyst, Bank of America: Thank you.

Jay Snowden, CEO, Penn Entertainment: Thanks, Sean.

Emma, Conference Operator: We’ll take our next question from Barry Jonas at Tuohy Securities. Please go ahead.

Barry Jonas, Analyst, Tuohy Securities: Hey, guys. Good morning. I wanted to start with ESPN that I think the new ESPN DTC product should be out soon. Should we be thinking of this as a potentially meaningful catalyst for you guys? I think any color here would be helpful.

Thanks.

Aaron LaBerge, CTO and Head of Interactive, Penn Entertainment: Well, I think the world will hear about that very soon. So I don’t want to comment too much on the product. But I will tell you, we think it’s a first in market integration, and we’re incredibly excited about it. It’s very cool. And we think it will have a difference in terms of driving users and exposure to platform.

So we’re very excited about it and can’t wait for you guys to see it.

Barry Jonas, Analyst, Tuohy Securities: Got it. Got it. And then either for Jay or Todd, I think another Pennsylvania land based casino operators talked about potentially exiting in response to skill based gaming. Can you maybe just talk about the risks you see around skill based in the state and beyond? Thanks.

Jay Snowden, CEO, Penn Entertainment: Yeah, happy to. We’ve spoken about this on previous earnings calls. It’s a complicated issue, skill based gaming. We view skill based games as largely look alike slot machines. And if they’re going to be competitive with us, they really need to be regulated and taxed like us as well.

We feel very strongly about that. And so, it’s an ongoing discussion at the legislative level in the state I know others have commented on the impact to their business. It obviously impacts all of us on the land based side. There’s tens of thousands of these things sprinkled across the state.

And we’ll see where it goes. But we feel like there’s hopefully some potential outcome that’s going to be good for the industry as well. So I’m cautiously optimistic on that topic currently.

Joe Jaffoni, Investor Relations, Penn Entertainment0: Great. All right. Thank you, Jay.

Jay Snowden, CEO, Penn Entertainment: Thanks, Barry.

Emma, Conference Operator: We’ll take our next question from Joe Stapp with Susquehanna.

Joe Jaffoni, Investor Relations, Penn Entertainment1: Thank you. Good morning. I wanted to go back and maybe ask another question about just the ramp that you have with the iCasino standalone product. Jay, I think you said is 70% of the new customers for iCasino standalone are incremental. Did you mean, say independent of what is, whether it be ESPN Bet channel customer and or a retail customer?

Could you just clarify that 70% incremental piece?

Jay Snowden, CEO, Penn Entertainment: Yeah. Happy to. 70% incremental to our iCasino business, meaning that 30% came over from the Hollywood offering within ESPN Bet. The other 70% is a combination of retail who had never engaged with us in our digital iCasino products, reactivated customers, the customers who have been dormant within our database, or just brand new to the entire ecosystem.

Joe Jaffoni, Investor Relations, Penn Entertainment1: Gotcha. And a follow-up, maybe also to clarify on the new app coming out from ESPN. Aaron, does this require you guys a lot of work in terms of, say, integrations that you have to do above and beyond what you’re doing in terms of the core product that ESPN Bet and Hollywood standalone?

Aaron LaBerge, CTO and Head of Interactive, Penn Entertainment: Well, we certainly I don’t know if I would say a lot of work, but it’s certainly a bespoke integration that’s going to be linked and associated with the content that you watch. So we have created different types of markets and processes for sharing that in real time with ESPN, which manifest itself in the product. So we think it’s the best in class and first of its experience as it relates to watching live events as it relates to Bet integration. So we’re excited about the work we’ve done. And I think the world will too.

Jay Snowden, CEO, Penn Entertainment: And obviously, the experience will be best for customers who have linked their ESPN account with ESPN Bet. And so Aaron, maybe comment on just sort of the progress we’re continuing to see on linked as a percentage of total users.

Aaron LaBerge, CTO and Head of Interactive, Penn Entertainment: Yeah. So actually, in the quarter, we’ve instead of talking about linked users, we’ve created a rewards club called ESPN Mint Club. So when you think about Mint Club users, a very high percentage of our MAUs are Mint Club users. They’re logging in 2.7 times more to our product. They’re placing 60% more weekly bets.

They’re generating more handle. They’re holding better. These are really our best customers, not just for ESPN Bet, but for ESPN as well. And so we think with Flagship and the continued integrations that Jay talked about as it relates to the Fantasy work we’re doing for football is going to be a big accelerant to us continuing to deliver against our guidance.

Joe Jaffoni, Investor Relations, Penn Entertainment1: I see. I see. Thank you.

Jay Snowden, CEO, Penn Entertainment: Thanks, Joe.

Emma, Conference Operator: We’ll take our next question from Chad Van Ahn with Macquarie.

Joe Jaffoni, Investor Relations, Penn Entertainment2: Hi, good morning. Thanks for taking my question. On the interactive side, wondering if you could chime in on your view of the predictive markets and if you think your customers would be interested in that product, and kind of how you view it from a regulatory standpoint? Thank you.

Jay Snowden, CEO, Penn Entertainment: Yeah, I would say you’ve heard from others, probably similar from us. We’re staying very close. There’s a lot going on right now in prediction markets as to federal regulations versus state level regulations. It is interesting. It does exist, as you guys know, has for a long time over in Europe.

I think it is definitely more of a niche market for a variety of reasons. I think it’s largely incremental, especially if it’s something that’s being offered in states where online sports betting is not currently legal. So I think more to come on that. It’s obviously not priority one for us. We’ve got a lot in front of us right now in terms of execution and delivering on guidance for the remainder of the year, and continuing to improve on all the areas that Aaron and Todd mentioned, both in interactive and retail.

But we’re staying close to it. And if this ends up being an opportunity for the industry, you should expect us to be participating.

Joe Jaffoni, Investor Relations, Penn Entertainment2: Thank you. And then Jay, separately, just kind of looking at the bricks and mortar portfolio, you have one of the fresher fleets in the industry and you’re upgrading some of the assets that need to be. Are there assets in the portfolio that maybe are viewed as non core, maybe lower EBITDA performing properties, ones where maybe don’t move the needle as much that you could potentially explore thing to deleverage the balance sheet?

Jay Snowden, CEO, Penn Entertainment: We would never say no to that question. It really depends on the situation. It depends on if you got an offer, if it’s an inbound. I would just remind you that our assets are largely tied up as part of our master leases. And so it’s not as simple as just, oh, if you were interested in potentially divesting an asset or two that you just make calls and transact to the highest bidder.

There’s landlord implications and involvement. And so it’s not as clean to sort of think about it. Maybe if you were a whole co company, and you could make those calls and kind of go through a process like that. I would say, maybe a better way to think about it is that some of the assets we have that are a little bit more challenged from infrastructure, and just how old they are, quite frankly. We have more riverboats in Mississippi.

We do in Louisiana. We have another one in Illinois. And there’s some really interesting potential opportunities in some of those markets to do things along the lines of what we’ve already announced in Aurora and Joliet, Illinois, as well as Council Bluffs. You should expect to hear more from us on some of those other opportunities that we think will have really strong return profiles based on what we’re seeing throughout the industry right now on those that have gone from old river boats onto land.

Joe Jaffoni, Investor Relations, Penn Entertainment2: Great. Thank you very much.

Jay Snowden, CEO, Penn Entertainment: Thanks Chad.

Emma, Conference Operator: We’ll go next to Ben Chalker with Mizuho.

Joe Jaffoni, Investor Relations, Penn Entertainment3: Hey, good morning. Thanks for taking my questions. On the iCasino side, it sounds like both from the data that we get and also the commentary in the prepared remarks that you’re having some success on the market share side, especially for the standalone iCasino iGaming app. Are you seeing anything that makes you want to lean into marketing or investments in that product? And one follow-up.

Thanks.

Jay Snowden, CEO, Penn Entertainment: We’re seeing really nice retention results. We have a great product there. We knew we did going in. And so I would say, we’re just getting started on some of the new performance based marketing spends. Let’s see how strong the top of funnel is in those efforts and what the CPAs look like.

Let’s see what retention looks like for those newer users versus those that came over. Maybe they were reactivated or came over from our retail database. But you should expect for as long as we’re seeing encouraging results and attractive CPAs and strong retention, we’re going to continue to lean in and push on iGaming. We think it’s a real big opportunity for us as a company. And we have a great product.

We have a great team overseeing that, that’s continuing to get better every day. So I would say, yes, overall to that.

Aaron LaBerge, CTO and Head of Interactive, Penn Entertainment: And as our cross sell continues to improve, which it’s doing really well at the moment, as we grow our sports book that’s just going to continue to drive our casino business as well, obviously.

Joe Jaffoni, Investor Relations, Penn Entertainment3: Got it. And then switching gears a little bit to Council Bluffs. You have the option of term loan versus rent. I guess from my seat, it seems like the obvious choice would be term loan, but maybe I’m missing something. Maybe talk about the thought process deciding between term loan and rent.

And then I think Jay, you were suggesting there’s a few other projects on the horizon. Do you think you’ll have flexible financing options there as well?

Jay Snowden, CEO, Penn Entertainment: I’ll hit the last one first, and then Felicia, you can hit the Council Bluffs question. Yes, we think we’ll have flexible financing because we do have options. We can always finance these projects on our own balance sheet. We have landlord relationships that are very healthy, and it’s great to have those relationships and have that optionality when you’re thinking about these projects. And then some of it’s just going to depend on what’s the credit market look like at the time that you’re needing to fund these projects.

There’s times where it might be more obvious that you want to do this on your own balance sheet versus work with a landlord or other financing sources. Please, I’ll hand it over to you on Council Bluffs.

Felicia Hendrix, CFO, Penn Entertainment: Yes. So just on the optionality and to key off of what Jay just said, we really owe that optionality on Council Bluffs to our great relationship with GLPI. And it’s fantastic to be able to have that ahead of us. And you’re right, on the surface, structuring it more as a loan is more attractive than rent. As you know, our rent will escalate every year.

And so having that loan could ultimately be the better decision. But we’ll have time and we’ll make that dent. I don’t want to kind of predetermine what we’re going to do. But having that optionality is very favorable.

Barry Jonas, Analyst, Tuohy Securities: Okay, helpful. Thank you.

Emma, Conference Operator: We’ll take our next question from Bernie McTowne with Needham.

Joe Jaffoni, Investor Relations, Penn Entertainment4: Great. Good morning. Thanks for taking the question. Big focus for investors on the OSB marketplace is just US handle growth. So just interested in terms of what you guys are seeing there.

Would love any color.

Joe Jaffoni, Investor Relations, Penn Entertainment1: Thank you.

Jay Snowden, CEO, Penn Entertainment: Yes. I would say, you’ve heard others talk about this. We don’t have any new state launches happening in 2025, other than potentially Missouri later, very late in the year. Alberta, there’s continued progress there. We’re actually quite excited about Alberta given our success in Ontario.

And there was good news there yesterday. It continues to move along through the process. So we’re cautiously optimistic that will happen sometime in the next couple of quarters as well or hopefully before the end of the year. And obviously, those state launches or new province launches are part of what’s been driving those higher handle results on a year over year basis for the last several years. This is a slower year in terms of state launches.

So I think you should expect to see handle growth for the industry, but it’s probably going to be less significant this year because of that dynamic than it has been the last several until you get to those state launches. And you’re probably going to see a little bit more muted just generally from a seasonality standpoint, when you get to Q2 and Q3, there’s just less big event things going on. And it’ll probably start to inflect to stronger growth results when you get to September through the remainder of the year.

Joe Jaffoni, Investor Relations, Penn Entertainment4: Understood. Thanks, Jay.

Jay Snowden, CEO, Penn Entertainment: Thanks, Bernie.

Emma, Conference Operator: Our next question comes from Jordan Bender with Syndesen.

Joe Jaffoni, Investor Relations, Penn Entertainment5: Good morning, everyone. For sports betting, you talked about what’s ahead of you. Some initiatives might be easier to achieve than others. But Jay, for sports betting, as your relationship continues with ESPN, can you maybe expand on some of the low hanging fruit between the two businesses that might help customer growth and retention through the end of the year? Thank you.

Jay Snowden, CEO, Penn Entertainment: Yes. I think I’ll let Aaron answer most of that. We hit it at a high level, and maybe Aaron will double click on some of those opportunities. Obviously, the streaming direct to consumer launch for the ESPN this late summer, early fall, that’s going to be a big opportunity for us to drive top of funnel as well as strong retention. And look, we’re finally getting to a point after being live with ESPN Bet for a year and a half where the real deep integrations that we all were excited about when we did the deal and shook hands, those are all starting to happen now.

Having that linkage between ESPN and ESPN Bet, and now you go into our betting app, and your favorite teams are all right on the top of the home screen. And so you can scroll through and see if you want to place bets with your favorite teams, because we have that information. And then you get to football season with fantasy. We’re finally going be able to do the things that we were hoping to do. It just took a little bit of time.

But Aaron, maybe you can spend

Joe Jaffoni, Investor Relations, Penn Entertainment1: some time.

Aaron LaBerge, CTO and Head of Interactive, Penn Entertainment: Yeah. I would say, in addition to the Mint Club, which is sort of special offers for link users, With that, one click link, your favorites get pulled over into ESPN Bet.

Jay Snowden, CEO, Penn Entertainment: You can go in and bet

Aaron LaBerge, CTO and Head of Interactive, Penn Entertainment: the markets for your favorite teams. What we’re already finding too is those users love to bet parlays more in those favorite placements, which is actually very good. But your favorites don’t just appear in ESPN Bet. They follow you through the ESPN ecosystem experience too, including their new flagship product, which means you’ll have a personalized betting experience not just within ESPN Bet, but within ESPN. And we’ve been working towards that over the past year.

You’re going now start to really see the benefits of that, especially moving into football. This year, if you’re a fantasy player, and ESPN has the biggest fantasy platform in The US, there is no better place to come play fantasy and bet your team than ESPN and ESPN Bet. It will be no question. And the product is going to be native. It’s going to be integrated not only into the ESPN Bet experience, but there will be a derivative version of that within the ESPN experience.

And you’ll seamlessly move across the two. So we are super excited not only about flagship coming up, but also the NFL season. It’s going be really special as it relates to fancy embedding.

Jay Snowden, CEO, Penn Entertainment: That’s a level of differentiation and personalization that isn’t happening today. It should be effective. We’re not going get ahead of ourselves of like how much better and what’s but that’s why we are confident that market share will continue to grow between now and the end of the year, both in sports betting as well as in iGaming. Again, different reasons, but we should see continued growth in both of those areas.

Joe Jaffoni, Investor Relations, Penn Entertainment5: Really helpful color and then the follow-up, Felicia taking the comments about stock dislocation in your prepared remarks, understanding there’s a price for anything and you spoke to the brick and mortar side of the business already. But could you look to do something strategically before the opt out clause next year if you’re not getting credit within your valuation? And that’s on the online side. Sorry.

Jay Snowden, CEO, Penn Entertainment: Yeah. I mean, wouldn’t there’s really nothing to say on that topic in terms of next year. I hit that on our last earnings call. That’s in the contracts. Both sides have the option at the third anniversary if we haven’t hit a threshold level of revenue market share to decide if they want to rework the deal or continue on or exit.

And that hasn’t changed. So look, we’re focused. Our partners are focused. We’re excited about what’s ahead of us. Let’s see where we are as we trend through the next couple of quarters.

I think it’ll probably be not just obvious to us, but obvious to others as well. What path is going make the most sense? But we’re staying focused, and our teams are staying focused on working together to deliver a really great and differentiated experience. And we’re confident that it’s going to deliver solid results. Through football season going into 2026, we’ve got an opportunity to really show why we did this deal in the first place.

And for whatever reason, if those things aren’t working, then you’ve got optionality as you head into 2026. So I would say nothing’s really changed there. But we’re excited about what’s in the queue.

Joe Jaffoni, Investor Relations, Penn Entertainment6: Great. Thank you very much.

Emma, Conference Operator: We’ll take our next question from Ryan Sigdahl with Craig Hallum.

Joe Jaffoni, Investor Relations, Penn Entertainment7: Hey, good morning, guys. Jay, you mentioned, I think it was in response to a question, maybe prepared remarks. But turning performance marketing back on, was that in context of the Hollywood ICasino standalone or also, ESPN Bet in both sides? Because I believe it’s been turned off since December of twenty twenty three. So just how you think about leveraging that channel and and maybe accelerating the customer acquisition and getting them into the funnel to experience the user experience that you’re building here?

Jay Snowden, CEO, Penn Entertainment: Yeah. I I it’s all a balance, as you can appreciate, Ryan, in terms of, you know, how much you’re doing there outside as it relates to sports outside of what you’re spending with ESPN. So we’ve been doing performance marketing and online sports betting outside of ESPN, not as much obviously in the last six months as the previous six months. But I think we’re getting smarter and more surgical around what’s working, what’s not, and where to invest and where not to. But my comments were more specific to since the launch of Hollywood iCasino.

Our initial first few months were really focused on organic cross sell, and obviously, reactivating customers that had been dormant. Now, it’s an opportunity for us to get a little bit more aggressive on the performance based marketing and see what type of customer profiles come in, much quality do we have there, what are the CPAs, What’s the retention? And we just got started recently, but we’re seeing some nice top of funnel results.

Joe Jaffoni, Investor Relations, Penn Entertainment7: Makes sense. And then just a quick follow-up. Timeline for launch in West Virginia?

Jay Snowden, CEO, Penn Entertainment: Do we have a latest on the Hollywood standalone for West Virginia? Yeah,

Aaron LaBerge, CTO and Head of Interactive, Penn Entertainment: don’t have it front

Barry Jonas, Analyst, Tuohy Securities: of me.

Carlos Antalya, Analyst, Deutsche Bank: Yeah, it’s sometime in the

Jay Snowden, CEO, Penn Entertainment: next couple of quarters. I don’t have the date in front of me, Ryan. We’re obviously working with the regulators there. We are live as you know, Pennsylvania, Michigan, New Jersey. We just launched the score casino in Ontario.

So West Virginia is the last state, at least currently for us to launch a standalone Hollywood iCasino app. It should be good for us because we have a Hollywood branded casino there. It’s the largest casino in the state of West Virginia. So I would say sometime in the next couple of quarters.

Joe Jaffoni, Investor Relations, Penn Entertainment7: Very good. Thanks guys.

Emma, Conference Operator: We’ll take our next question from John DeCree with CRB.

Joe Jaffoni, Investor Relations, Penn Entertainment0: Hi, good morning everyone. Thanks for taking all the questions. Jay or Todd, you guys have as good of a pulse as anyone on kind of the regulatory and legislative process. Think Ohio considering iGaming was probably not on our big oak cart for this year and it’s a big state for you guys in the retail network. So maybe two part question.

What are you guys seeing on legislative front? And then how do you like your position or how do you think about your position in a state like Ohio where you kind of get to start maybe from the starting line with everyone else? And then given where you have a big retail presence in terms of quickly launching versus maybe where you started before playing catch up?

Jay Snowden, CEO, Penn Entertainment: Yeah, happy to. We’re obviously very involved and engaged in Ohio. A bill has not been put forward yet. I know there’s articles being written about a bill being worked on right now. I would say, look, we now have a much more competitive iGaming products.

And we have a standalone app in addition to what we offer within ESPN that we know is competitive. And we’re better operators in that space than we were even six months ago or nine months ago. Every state is a bit different. We’re not going to necessarily be on the same page with every other company, because some markets we have no casino, some markets we have a small casino, and some markets we’ve got, like the state of Colorado, gaming laws were passed there where the casinos are only in the mining towns in the mountains, an hour and a half away from the population. So that’s not a good scenario for us if we have one of those large casinos, which we do in Black Hawk, Colorado.

So it really does depend. We’re obviously very focused on doing what’s in the best interest of our shareholders. And so Ohio will stay close as we would in any other state. But I don’t

Carlos Antalya, Analyst, Deutsche Bank: want to comment too much, because I

Jay Snowden, CEO, Penn Entertainment: know that bill is still being worked on currently.

Joe Jaffoni, Investor Relations, Penn Entertainment0: Thanks, Jay. Appreciate it.

Jay Snowden, CEO, Penn Entertainment: All right. We’ll take one more question, Emma.

Emma, Conference Operator: We’ll take our final question from Jeff Zui with Stifel. Please go ahead.

Joe Jaffoni, Investor Relations, Penn Entertainment6: Great. Good morning, everyone. Thanks for squeezing me in. I wanted to touch on more on the iCasino side of Interactive. Jay, you shared a lot of detail on the momentum that you’re seeing following the standalone app launch and improvement in the product, which is just quite noticeable anecdotally.

I’m curious if you look at your competitor that holds that number one spot for product and maybe even some of the other players that round out the top three, top four, just what are some key areas that you’ve identified where you think there is still room to close any gaps that you still see out there on product in ’25 and ’26 and beyond? Thanks.

Jay Snowden, CEO, Penn Entertainment: I’ll take a stab and Aaron, obviously, jump in there. I’d say, look, I’ll also hit sports betting. I think the biggest opportunity for us right now beyond sort of the more organic things that we’re working on with our partners at ESPN around integrations and personalization is around live betting. I think where our product offering today is good, but it needs to be better than good. And so we’re working hard on that.

We just launched some streaming offerings. And so live betting is getting the experience is improving every day right now. But we more work to do there in terms of live betting with same game parlays, and just live betting generally, and reducing latency, and things of that nature. So on the sports betting side, I would say mostly around live. As it relates to online gaming, it’s not a product mix issue at all.

I think we have great products. We have great variety. We have our own games that we’ve developed that perform quite well, especially in the areas of digital blackjack. And in some slot cases as well, slot themes. But I would say overall for us, it’s probably more around CRM and promotional engine, and just that same level of personalization.

And you want people to feel they’re being treated different and better within the experience and the ecosystem that you provide than anyone else. And so we’re still working on that. The product team’s hard at work to make sure that we’re creating some points of differentiation that are improved versus anyone else.

Aaron LaBerge, CTO and Head of Interactive, Penn Entertainment: Yeah, I would just add, just build on personalization, I think is one of the things we’re really focusing on in iCasino, just reducing the friction, elevating and putting the games you care about in front of you, getting you into them faster. The same exact approaches we’re taking with the sports book as well, but we think that’s going to be just make it easier and more fun for you to get into what you want as quickly as you can. As Jay said, we’ve got a nice product mix. Our UI is world class. Our games are world class.

So just getting you into what you want as quickly as possible, I think is going to make a difference, and we’re working hard on that.

Barry Jonas, Analyst, Tuohy Securities: Great. That’s helpful. Thanks for that.

Joe Jaffoni, Investor Relations, Penn Entertainment6: And then just following up on something Felicia said earlier in the prepared remarks. I think Felicia talked to some exposure to tariffs on the steel side with the Council Bluffs project and some strategies or some exploration in place of some ways to try to mitigate or get around that. I was hoping to just expand on that a little bit further based on your discussions right now. Is there expectation that you could fully fix these in any sort of GMPs or is the understanding that tariffs will be carved out kind of from here onward? And then with respect to steel specifically, are there opportunities to resource domestically?

Or is it more about sort of leaning on your suppliers and things of that nature? Thanks.

Todd George, Head of Operations, Penn Entertainment: I I can take that one. So, you know, we’re not looking at a at a high rise there. So the the need for steel is not as high as if we were building a hotel tower. It’s it’s a one level casino that that Jay had touched on. But also, you know, we we’re in a really good position from a timing standpoint, so we can kinda spot the market and and look to lock in.

We have a great procurement team as both Felicia and I have mentioned as well. It’s a great DNC team that that can work through this and then work those changes into the design. Since this is very much a known issue, d n our design construction and and procurement team are working together on that already. So, again, as this tariff noise kind of plays out over the the upcoming months, we feel good about the ability to lock in when the time is right.

Jay Snowden, CEO, Penn Entertainment: It is you know, I’ll just underscore, we we did provide a a budget range for Council Bluffs just because of what’s going on in the marketplace right now around tariffs. So the four other growth projects that were getting close to opening, we were a lot more precise of what those budgets were going to be in the early days because we didn’t have that as a factor. So that’s why the range is there.

Joe Jaffoni, Investor Relations, Penn Entertainment6: Great. Thanks very much.

Jay Snowden, CEO, Penn Entertainment: All right. Thanks, Jeff. Thanks everybody for joining us this morning. Look forward to speaking with all of you again on our Q2 earnings call in August. Have a great day.

Emma, Conference Operator: This does conclude today’s program. Thank you for your participation. You may disconnect at any time.

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