In this photo illustration, the Penn Entertainment logo is displayed on a smartphone’s mobile screen.
Rafael Henrique |: SOPA Pictures |: Light missile |: Getty Images:
Penn Entertainment On Thursday, it became the first US gambling company to post a profit in its sports betting business in the last three months of the year.
Typically, it is more difficult to make a profit for a sportsbook during the third and fourth quarters because companies spend more on marketing and promotions during the football season.
Penn’s interactive business, which also includes online casino games, posted a profit of $5.2 million on revenue of $208 million in the fourth quarter of 2022. This performance helped lift the company’s total revenue for the period by about 1% to $1.6 billion.
Profits in sports betting came even as Jim “Mattress Mac” McIngvale placed a $10 million bet on the World Series-winning Houston Astros in November.
Caesars also took a hit from Mattress Mack’s baseball bet, which blocked its own ability to turn a profit in sports betting in the fourth quarter, according to pre-release results from the debt refinancing.
FanDuel, the US online sports betting market leader, reported quarterly earnings in the second quarter of last year and said it expects to be profitable for the full year. Its parent company, VibrateHe has not reported his income yet.
DraftKingsAnother competitor has said it will be profitable by 2024. Its shares recovered more than 50% in January after a punishing 2022 as investors focused on a lack of profits despite huge spending on promotions and marketing.
Penn attributes its profitability in the interactive sector to a different marketing approach than its competitors. It builds on the cross-platform advancement of Barstool, the sports media company Penn will take full ownership of later this month, and the strength of Canadian media brand theScore.
Penn said Ontario, where theScore was founded, has become the top market for sports betting and its iCasino business in North America, despite fierce competition.
The company’s interactive business also had its most successful start, based on the first time deposits, when Ohio began operating sports betting on January 1. Penn credited the strength of the Barstool brand and said more than half of the money wagered came from them. reward base of its MyChoice customers.
Still, stocks fell on Thursday after CEO Jay Snowden, on an earnings call, blamed overall lackluster fourth-quarter earnings on bad weather in December. The company issued guidance for 2023 that Deutsche Bank gaming analyst Carlo Santarelli called “realistic, though perhaps uninspiring.”
Snowden said the guidance was conservative, based on the broader economic outlook. “We took a haircut for what we expected to see in 2023, just to create some level of recessionary concerns,” he said.
But, he added, January has been very strong for both its brick-and-mortar casinos and its online platform. He said that if the current trend continues, the midpoint of the guidance will likely be lower.