Penn Entertainment's Chief Executive, Jay Snowden, has expressed interest in potentially expanding into the Las Vegas Strip, contingent on finding the right opportunity. This comes as the regional casino operator reported a return to profitability in the second quarter and upgraded its full-year projections for its land-based operations.
The company, which manages 42 casino properties throughout the U.S. and Canada, posted a net income of $32.6 million, equating to 24 cents per share, for the quarter ending June 30. In contrast, the same period last year saw a net loss of $18.3 million, or 12 cents per share. Revenue for the quarter increased by 5.7%, reaching $1.86 billion compared to $1.76 billion in the previous year.
Penn's potential move into the Las Vegas Strip would strategically enhance its regional casino portfolio, bolstered by recent investments such as a $360 million redevelopment of the Hollywood Casino Aurora and the transition of Hollywood Casino Joliet from a riverboat to a land-based venue.
In June, the company also inaugurated a $100 million hotel tower at Hollywood Casino Columbus in Ohio.
Snowden emphasized that they are not looking to acquire a property requiring a significant investment of $400 to $700 million for deferred maintenance. He stated that any potential acquisition would need to meet several criteria.
While expressing a desire to be on the Las Vegas Strip at the right moment, he reiterated that it must be at the right price and involve the right asset.
Penn's regional operations generated $1.5 billion in revenue, with an adjusted EBITDAR of $517.4 million and a margin of 34.4%. Retail operations outperformed expectations in three of the four regions, prompting the company to raise its full-year 2026 retail adjusted EBITDAR guidance by $31 million.
The West Segment, which includes the M Resort in Henderson, Nevada, reported a 10% revenue increase, benefiting from a $206 million hotel expansion that added 375 rooms and nearly doubled the property's capacity.
Jefferies gaming analyst David Katz noted that the results exceeded expectations, with retail outperforming in three out of four regions and a cash flow guidance range that surpassed the anticipated figures.
Katz also highlighted continued operational progress in the Interactive division, which reported revenue of $349.4 million and an adjusted EBITDA loss of $9.4 million, a narrower loss than analysts had predicted. The company has shifted its focus toward iGaming following earlier challenges in sports betting.
Snowden remarked that the Interactive segment demonstrated significant year-over-year Adjusted EBITDA improvement, with Hollywood iCasino achieving record revenues.
Penn's online sportsbook also saw increased activity during the World Cup, with heightened user engagement after rebranding from ESPN Bet to ScoreBet. Snowden indicated plans for growth in the sportsbook segment through the year's end.
He noted strong user loyalty to the Score brand in the U.S., despite its relatively small size, and highlighted the World Cup's role in boosting engagement, which they aim to maintain during the football season.
Snowden reported that about 70 of their sportsbook users placed World Cup bets, with approximately 45 of those bettors wagering on soccer for the first time.
As investors analyze the company's future in online gambling, they are particularly focused on the early performance of its Alberta launch, capital investment strategies, and potential industry consolidation.