PENN Returns to Profit on a Record Retail Quarter and Says It Is Ready for Texas

PENN Entertainment earned $32.6 million in the third quarter, a year after an $825 million digital write-down, as its casinos set a revenue record. Two days after Texas elected a Democratic governor, Jay Snowden said PENN was "ready to play offense" there.

• PENN Entertainment reported third-quarter revenue of $1.84 billion, up 7.1%, and net income of $32.6 million on 5 November, against a $865.1 million loss a year earlier
• Retail revenue set a third-quarter record of $1.5 billion, Segment Adjusted EBITDAR rose 7.7% to $501.8 million, and PENN raised its full-year retail guidance
• The Interactive segment, rebuilt around theScore Bet after Disney ended the ESPN Bet deal, cut its Adjusted EBITDA loss to $18.3 million from $76.6 million despite a $20 million Alberta launch
• Chief Executive Jay Snowden said PENN, which runs two Texas racetracks, would spend more time in the state after the 3 November elections
• Snowden ranked paying down debt first and share buybacks second for 2027, with acquisitions "not a high priority"

Record Retail Revenue Carries PENN Back Into Profit

PENN reported revenue of $1,840.0 million for the quarter to 30 September, up from $1,717.3 million. Net income was $32.6 million, or $0.24 per diluted share. A year earlier PENN lost $865.1 million after $825.0 million of impairment charges in its Interactive segment. Consolidated Adjusted EBITDA, which is stated after rent to its real estate landlords, rose to $284.0 million from $194.9 million.

The four retail segments produced $1.49 billion, up 5%, which PENN called a third-quarter record. Midwest led, with revenue up 14.6% to $341.9 million and Segment Adjusted EBITDAR up 12.9% to $134.5 million as Hollywood Casino Aurora and Joliet ramped up. Northeast reached $208.1 million and South $108.3 million, while West was flat at $50.9 million, which Snowden blamed on the call on weak table hold at the M Resort and a Las Vegas market that was "a little soft". Margins also absorbed higher Illinois tax tiers for Aurora and Joliet.

PENN raised full-year retail guidance by $16 million to $5.89 billion in revenue and by $10 million to $1.973 billion in Adjusted EBITDA, Chief Financial Officer Felicia Hendrix said. Snowden said October was PENN's strongest month of 2026 for year-over-year gaming revenue growth in Pennsylvania, after the state's skill game ban took effect on 14 October.

theScore Bet and Hollywood iCasino Narrow the Digital Loss

Interactive revenue was $348.4 million, but $191.4 million was a gross-up for gaming taxes on partner skins. Excluding it, revenue was $157.0 million, against $158.2 million a year earlier. Hendrix said growth in US iCasino and Canada was offset by lower US sports betting and integrated iCasino volumes, still normalising after the theScore Bet rebrand, and by customer-friendly results.

PENN guided fourth-quarter Interactive revenue of $445 million, including a $242 million gross-up, and Adjusted EBITDA of $18.7 million. That would leave a full-year loss of $20 million, equal to the Alberta investment. "2027 will be profitable for the year," Snowden said.

Texas, the Midterms and the Order of Spending

Asked about the 3 November midterms, Snowden said PENN holds two of Texas' three Class 1 thoroughbred tracks, Sam Houston in Houston and Retama Park near San Antonio; the release lists Retama under a management contract. "We're ready to play offense," he said, while adding that the outcome was hard to predict.

Democrat Gina Hinojosa defeated Governor Greg Abbott in a race called by the Associated Press, according to The Texas Newsroom, which said she will likely face a Republican-led legislature. Fox 4 reported that Democrat Vikki Goodwin unseated Lieutenant Governor Dan Patrick and that the AP projects Republicans will keep the state Senate. Snowden also said most pro skill game lawmakers in Pennsylvania and Missouri "either lost outright or lost a lot of influence".

PENN held $2.0 billion of liquidity and traditional net debt of $1,761.8 million, for traditional net leverage of 2.3x and lease-adjusted leverage of 5.6x. Snowden ranked debt reduction first, then buybacks, citing a free cash flow yield over 20%, then projects in Council Bluffs and New Orleans, with M&A last. The release gives no repurchase figure for the quarter.

The Casinos Are Paying for the Digital Repair

Retail EBITDAR rose $36.0 million and the Interactive loss shrank by $58.3 million, but underlying online revenue was flat. Snowden credited more targeted promotions, a richer iCasino mix and lower costs. Chief Technology and Product Officer Aaron LaBerge said PENN is steering spending away from US sports acquisition and has seen no material effect from prediction markets. The fourth-quarter guidance needs $203 million of underlying revenue, against $157.0 million in the third quarter, a sharp step-up.

Texas Is an Option, Not a Plan

A governor cannot legalise casinos. Casino gaming in Texas needs a constitutional amendment passed by two-thirds of both chambers and then by voters, and the Senate is projected to stay Republican. Patrick's defeat removes a Senate presiding officer who opposed legalisation, but PENN has put no figure on any Texas opportunity.

PENN's quarter shows a regional casino group being carried by its buildings while the digital business is cut back to profit. Texas is real optionality, but the numbers that matter in 2027 are leverage and whether Interactive keeps its profit promise.