PENN Entertainment Reports $26.8 Million Loss in Q2, ESPN BET New York Launch this Month

Jan 5, 2020; Boulder, Colorado, USA; General view of a ESPN broadcast microphone before the start of the game between the Oregon State Beavers against the Colorado Buffaloes at the CU Events Center. Mandatory Credit: Ron Chenoy-USA TODAY SportsPENN Entertainment reported $1.66 billion in revenues, but a net income loss of $26.8 million in the second quarterThe company revealed ESPN BET will launch in New York this month prior to the football seasonPENN Interactive, which includes ESPN BET, reported revenues of $232.6 million and adjusted EBITDA loss of $102.8 million

PENN Entertainment reported net income losses of $26.8 million for the second quarter of 2024, with its PENN Interactive division reporting adjusted EBITDA loss of $102.8 million, but will be launching ESPN BET in New York this month prior to the football season.

The company announced the ESPN BET New York launch during this morning’s second-quarter report. ESPN BET will also undergo several product updates and be integrated into ESPN’s fantasy football app prior to the NFL season.

One direction the company will not be going in? There was no mention of any plan to institute a tax surcharge on winning online sports bets, similar to what DraftKings announced last week.

No Plans for Sports Betting Tax Surcharge

The company reported $1.9 billion in total liquidity, inclusive of $877.6 million cash and cash equivalents.

PENN Entertainment CEO Jay Snowden briefly touched on DraftKings’ plan to institute a tax surcharge on winning online sports bets in early 2025. He described the plan as unexpected, but did say it was “interesting.”

PENN Entertainment will not be instituting a tax surcharge of its own anytime soon, Snowden noted. He did not, however, say that PENN would never consider a surcharge in the future.

“Expect us to be observers. A tax surcharge in early 2025 isn’t even on our radar. However, I hesitate to say never.”

DraftKings announced its new “gaming tax surcharge” on winning bets in New York, Illinois, Vermont, and Pennsylvania during it’s second-quarter report last week. The surcharge will vary from state to state, but was described by DraftKings representatives as “nominal.”

The surcharge will be implemented in “high tax  online sports betting states that have multiple operators (Illinois, New York, Pennsylvania, and Vermont) to ensure an operational effective tax rate of approximately 20%,” according to the company’s Q2 earnings report.

ESPN BET Coming to New York, Plus New Integrations

One piece of big news for the company is a planned New York launch of ESPN BET this month prior to the start of football season. While a date has yet to be announced, PENN representatives reported it will likely be live prior to the first week of college football.

College football begins on Saturday, Aug. 24, at noon.

It’s a long-time coming for ESPN BET in the Empire State, as PENN Entertainment secured access into the country’s largest sports betting market this past February. The company acquired WSI US, LLC, from Wynn Interactive Holdings for $25 million, which included its New York online sports betting license.

However, Snowden seemed to tamp down possibilities for New York launch promos and bonuses for its customers, saying the company would take a different approach compared with its other state launches.

“We will maintain our disciplined approach to customer engagement when we launch ESPN BET in New York in late August,” Snowden revealed in a press release.

Additionally, ESPN BET will undergo several key integrations with other ESPN properties. Snowden announced the sports betting app would be fully integrated with the ESPN Fantasy app prior to the start of the football season and will be integrated with the ESPN app as well.

PENN representatives noted that users will be able to track ESPN BET parlays in the ESPN app much like they would keep track of a game in the app’s gamecast feature.