Penn Entertainment’s second-quarter numbers painted a mixed picture: retail casino revenue flatlined, but a digital push gave the company a welcome lift. The interactive division’s growth is now doing much of the heavy lifting.
Interactive Division Gains Momentum
The online arm of Penn Entertainment has been a standout. Revenue from the interactive segment climbed 35.9% to $316.1 million in Q2 — the highest growth rate among its business units. Even more telling, losses narrowed sharply, with adjusted EBITDAR losses shrinking from $102 million in Q2 2024 to $62 million this year.
Executives point to two main factors: sharper product updates and Penn’s omnichannel strategy, which ties online play to retail loyalty programs. “We’ve still got plenty to iron out, but the momentum’s clear,” said CEO Jay Snowden.
For the first half of 2025, interactive losses were down by nearly half compared with last year. That kind of turnaround doesn’t go unnoticed in a sector where digital profitability has been elusive.
Retail Casinos Hold Ground
Brick-and-mortar casinos remain Penn’s cash anchor, but performance was flat in Q2. Retail casino revenue stayed at $1.4 billion — identical to last year’s figure. That stability isn’t necessarily bad news, though it does suggest competition and market saturation are keeping growth in check.
Adjusted EBITDAR from the retail side was the primary contributor to Penn’s total $498.6 million adjusted EBITDAR in the quarter. Without that steady base, the company’s online recovery would be harder to fund.
Still, no one inside the company is ignoring the reality: retail casino floors aren’t pulling in more players than a year ago.
Financial Position Steady but Watched Closely
Penn closed Q2 with $671.6 million in cash and $2.1 billion in net debt. The debt level is significant but not unusual for a company with both physical and digital operations to maintain.
Share buybacks continue to be a priority. So far in 2025, Penn has repurchased $115.3 million in shares, with a target of at least $350 million for the full year. It’s a signal of confidence — but also a calculated risk if operating costs rise faster than expected.
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Q2 Revenue: $1.76 billion (up 6% YoY)
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H1 Revenue: $3.4 billion (up 5% YoY)
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Adjusted EPS: $0.10 (vs. $-0.18 last year)
Online Betting and iCasino: The Real Growth Story
The numbers suggest that Penn’s online sports betting and online casino products are no longer side projects. They’re becoming primary growth drivers. Both categories saw record gaming revenue in Q2, driven by improved app performance, better odds offerings, and cross-promotions with retail properties.
Here’s a quick snapshot of year-on-year change:
Segment | Q2 2024 Revenue | Q2 2025 Revenue | % Change |
---|---|---|---|
Retail Casinos | $1.4B | $1.4B | 0% |
Interactive Division | $232.5M | $316.1M | +35.9% |
Analysts Split on Future Trajectory
Some see Penn’s hybrid retail-online model as a long-term advantage. Others warn that digital gains could plateau if competitors match Penn’s tech upgrades. Regulatory changes in online gaming markets also remain a wildcard.
A few are keeping an eye on margins. Interactive losses may be shrinking, but they’re still losses. If marketing costs spike — as they often do in sports betting seasons — quarterly results could swing back into the red.
Still, Q2’s 6% revenue growth and an adjusted EPS turnaround from a loss to $0.10 will keep optimism alive, at least for now.