The owner of a new legal sports betting operator has reported favorable second-quarter results.
PENN Entertainment — the part-owner of ESPN Bet – generated $1.67 billion in revenue in Q2 2023, a 2.9% increase year-over-year. The entertainment company reported a net income of $78.1 million during the quarter compared to $26.1 million in Q2 2022. PENN’s adjusted EBITDA was $330.4 million in Q2 2023 — a 30.7% drop compared to the same period last year.
“The Company experienced stable property level performance this quarter with each month showing sequential improvement,” said PENN CEO and president Jay Snowden. “Additionally, we are excited to have successfully re-launched our sportsbook app, which features major product improvements that significantly upgrade the user experience.”
In July, PENN debuted its new and improved Barstool Sportsbook wagering app after transitioning to its own in-house proprietary platform. PENN had previously powered the platform using gambling software provider Kambi.
New endeavors
PENN purchased a 36% stake in Barstool Sports in 2020 for $163 million, and in February, the company acquired the remaining 64% of Barstool in a deal valued at $388 million. The two entities have now decided to part ways amid PENN securing a deal with one of the world’s largest entertainment brands.
On Tuesday, PENN agreed to a long-term deal with ESPN to launch online sports betting sites across the United States. As part of the pact, PENN will rebrand Barstool Sportsbook as ESPN Bet in the fall of 2023. The deal will require PENN to pay the “Worldwide Leader in Sports” $1.5 billion in cash. ESPN will also have the opportunity to purchase 31.8 million shares of PENN stock with $500 million of warrants.
The new agreement will see PENN sell Barstool back to its founder David Portnoy. PENN will maintain operations in Ontario under theScore Bet, which it acquired for $2 billion in 2021.
The company’s Interactive segment, which includes online sports betting operations, generated $88.5 million in revenue in Q2 2023 as compared to $55.4 million for the same period last year.
