Quarterly results are fickle things. One small change can lead to drastically different results, share prices and even business partnerships months down the line. Penn Entertainment knows this better than most, especially considering its very public spat with majority stakeholder HG Vora last year.
Not only did each press release between the two cause stocks to fluctuate, but Penn’s entire operations were called into question in relation to its performance. This debacle started when Penn refused to hire all of HG Vora’s recommended Board candidates.
Fast forward to the start of 2026, and Penn capitulated to bring on three new Independent Board Directors as part of a mutual agreement with HG Vora. Well, not only did Penn Entertainment’s share price jump up following the announcement, but it has continued to grow – along with the company’s net revenue.
But is this a direct result of HG Vora’s recommendations, or is there more going on behind the scenes?
How did Penn Entertainment fare in its Q1 results?
In the middle of April, Penn Entertainment released its full financial results for Q1 2026.
The highlight of the report was undoubtedly the overall revenue rise of 6.2% to $1.78bn for the period, with the retail sector accounting for $1.4bn.
When looking at specific regions, Penn’s Northeast and Midwest segments – encompassing its Chicago and Kansas locations – dominated retail revenues, generating $687.1m and $305.9m, respectively.
Penn’s online sector saw 14.9% growth in its online casino, bringing the total to $70.9m, while the sportsbook increased 5.2% to $65.2m. This represented a 6.5% increase in revenue overall to $172.5m, before tax gross-ups.
Adjusted EBITDA did see a loss of $10.8m, but this is likely due to recent investments from the company, such as its theScore Bet rebrand and imminent entry into the Alberta online gambling market – and this was still an improvement from last year’s loss of $89m.
However, the operator’s net loss of $2.8m for Q1 was a drastic fall from the net income figure of $111.5m during Q1 2025.
This begs the question: Did Penn push for greater performance in its retail casino portfolio after HG Vora retaliated, or did these properties thrive despite Penn’s best efforts to focus on its online sector?
What changed at Penn Entertainment?
Looking at Penn’s Q1 report, the operator is seeing results from a few longer-term projects that were put into motion long before these HG Vora recommendations joined the Board.
Particularly, Hollywood Joliet reopened on August 11, 2025, after a long relocation process that saw it leave the Des Plaines River and open its doors to a new 200,000 sq ft facility on land.
Following this, the new Hollywood Joliet venue saw record net revenue for Q1 and March 2026 compared to its former operations dating as far back as 2015.
The property also saw record slot volume during this time, which was 1.6x times higher compared to 2025’s figures and record table volumes that were 2.6x higher.
Similarly, the M Resort Hotel Tower that opened on December 1, 2025 is also seeing steady growth in slot and table volume, as well as increasing net revenue.
Why is this important?
It seems Penn may have learned its very expensive lesson, regarding its online interactive segment, and finally shifted its focus to its much more stable vertical: land-based gaming.
This would be particularly interesting if so, because there is no doubt Penn’s land-based portfolio is its strongest asset. After all, retail accounted for $1.4bn of the company’s overall revenue figure, while the interactive segment brought in $172.5m.
The initial dispute between Penn and HG Vora was because Penn refused to appoint William Clifford to its Board. The explanation was that Clifford lacked “digital gaming and online sports betting experience – areas essential to the future of Penn’s business and the industry.”
Since then, Penn’s land-based portfolio has continued to thrive. Under its updated 2026 guidance, retail should see an adjusted EBITDAR figure of $1.9bn, while the interactive segment is predicted to have a negative adjusted EBITDA of $20m.
What is Penn Entertainment planning?
Penn seems fairly confident that its retail casino sector will continue to deliver results for the business. After all, it has 42 retail properties and five development projects in the works. These were responsible for the largest quarterly increase in the company in three years.
The slide discussing Hollywood Joliet’s recent successes was even titled “Development Projects Driving Growth,” compared to the more ominous “Interactive Segment Strategic Priorities” slide that covered the latest developments in its online sector.
Penn has not abandoned its interactive sector just yet, though, and is even planning a day-one launch into the upcoming Alberta market. It is also pushing for creator synergy between its media and iGaming brands, as well as investing in an organic user base for the products.
But was HG Vora right all along?
It seems that, while Penn initially refused HG Vora’s push for more land-based real estate expertise on the Board, the company is still crediting its recent successes to this vertical within the business.
This begs the question: did Penn push for greater performance in its retail casino portfolio after HG Vora retaliated, or did these properties thrive despite Penn’s best efforts to focus on its online sector?
There are still issues at Penn. The operator saw a net loss of $845.3m for FY25, with an operating loss of $673.6m. As for this quarter, the year started off on unsteady feet with a net loss of $2.8m. It will be up to the Board of Directors, including HG Vora’s recommendations, to steer Penn back to profitability in the coming months.
While its interactive business is bringing in some level of revenue, this controversial product is still causing questions to be asked regarding Penn’s operations. It might not be the right time to keep expanding to open new properties or push new services, but instead to nurture the parts of the business that are making the healthiest profit.
Just look at Las Vegas Sands. It tried to go online, saw that it couldn’t compete – and has instead doubled down on land-based operations that are seeing it maintain a $30bn+ market capitalization.
After all, a pen that writes too much will eventually run out of ink.
Penn Entertainment’s net debt figure has risen to $2.2bn
