Penn Entertainment has recorded an increase in revenue to $1.65bn (£1.46bn/€1.69bn) for its third quarter 2022 results, while the business revealed its online arm turned a profit in October.
Jay Snowden, chief executive officer and president of Penn Entertainment, said that the quarter had been “solid” and cited Penn’s acquisition of theScore as a particular positive.
“We are pleased to report another solid quarter despite operating in an uncertain economic environment,” he said. “Our strong retail results were highlighted by ongoing database growth and stable margin performance, which continued through October.”
“In Ontario, we are enjoying early success during our first football season while benefitting from theScore Bet’s seamless transition to our own fully-integrated, proprietary tech stack.”
Revenue rose by 7.5% year-on-year. Penn’s northeast segment made up $685.4m of the total, up by 1.9%. The south segment generated $329.8m, ticking up by 3.6%, while revenue from the midwest segment rose by 1.2% to $289.4m. The remaining revenue was made up of the west segment, interactive, and other revenue from Penn’s stand-alone racing operations.
Snowden spoke highly of the interactive segment, which brought in $158.7m. This was 70.6% higher than in Q3 2021. He said that Penn’s benefitted particularly from a focus on omnichannel growth, as well as multiple launches.
“Our interactive segment experienced strong year-over-year revenue and user growth in the quarter and was profitable in October,” continued Snowden. “Results for the quarter included costs associated with the launch of Kansas, our first football season in Ontario and Louisiana, the $12.5 million lobbying expense for the California sports betting initiative and a payment processing fee adjustment of $7.9 million.”
“Our omnichannel approach to marketing enabled us to deliver one of our most successful sportsbook launches to date in Kansas. We are also seeing tangible benefits of our integrated media ecosystem approach in Ontario, with media users contributing over 80% more gross gaming revenue on theScore Bet than non-media users.”
“Given our strong revenue growth and disciplined approach to marketing, we remain confident in our ability to deliver profitability in 2023.”
Gaming accounted for a majority of Penn’s $1.61bn in revenue, standing at $1.31bn – 4.8% more than in Q3 2021.
The rest of the revenue came from food, beverage hotel and other revenue, which totaled at $307.5m.
Total operating expenses came to $1.48bn, 16.9% higher year-on-year. Most of this consisted of gaming expenses, which totaled $757.9m, a rise of 16.1%. General and administrative costs fell considerably by 26.1% to $277.9m, while food, beverage, hotel and other costs grew by 24.4% to $199.2m.
Depreciation and amortization costs were $148.7m, and impairment loss costs added up to $104.6m.
The operating expenses left the operating income at $136.7m, 42.8% less yearly. Interest expense totaling at $193.3m, along with other income expense at $8.8m, affected the total further. However, income from unconsolidated affiliates at $6.6m provided a small boost, leaving the loss before income taxes at $58.8m.
Following net income tax benefit of $182.0m, the total net income came to $123.3m, a rise of 43.0% year-on-year.
For the first nine months of the year, revenue stands at $4.81bn, 11.1% higher than the same period last year. Operating expenses stand at $4.08bn, a rise of 16.7% year-on-year. Following other expenses, taxes and interest, the net income for the first nine months is $200.9m, down by 45.5%.