Financial Data and Key Metrics Changes - The retail segment generated revenues of $1.4 billion with adjusted EBITDA of $465.8 million, resulting in segment-adjusted EBITDA margins of 32.8% [13] - The interactive segment reported revenues of $297.7 million, including a tax gross-up of $139.5 million, and an adjusted EBITDA loss of $76.6 million [14] - Total liquidity at the end of Q3 was $1.1 billion, including $660 million in cash and cash equivalents [16] Business Line Data and Key Metrics Changes - The North America iCasino business achieved its highest quarterly gaming revenue to date, with a nearly 40% year-over-year improvement driven by record cross-sell from OSB of 62% [6][7] - iCasino monthly active users (MAUs) increased by 79% during Q3, with new all-time records for MAUs, gross gaming revenue (GGR), and net gaming revenue (NGR) set in October [7] - The transition to theScore Bet is expected to enhance digital business efficiency and profitability, with a focus on high-margin markets [5][8] Market Data and Key Metrics Changes - The company noted stable demand across gaming and non-gaming amenities, particularly in regions not impacted by new supply and increased competitor promotional activity [9] - The new Hollywood Casino in Joliet has driven impressive volumes and database growth, with a 42% increase in the active database since opening [10] Company Strategy and Development Direction - The company is realigning its interactive focus to prioritize digital assets in Canada and the Hollywood iCasino product, leveraging cross-sell opportunities across its ecosystem [4][5] - The early termination of the ESPN agreement will cease cash payments and marketing obligations, allowing for a more flexible marketing strategy focused on high-return markets [12][23] - The company plans to continue investing in growth capital while managing share repurchases as a key component of its capital allocation strategy [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate increased competition and promotional activity, emphasizing the importance of maintaining a strong value proposition [36] - The company is focused on achieving profitability in its digital segment by 2026, with a clear plan for retention and marketing strategies post-rebranding [8][43] - Management highlighted the importance of controlling the business's cost structure and marketing budget to enhance profitability moving forward [8][23] Other Important Information - The company repurchased $154.1 million of shares at an average price of $19.34 per share in Q3, with a total of $354 million repurchased as of November 5 [17] - The total CapEx for 2025 is now projected at $685 million, reflecting a shift of some project costs into the next year [20] Q&A Session Summary Question: Impact of ESPN exit on near-term and long-term profitability - Management discussed the strategic investments made in digital business and the importance of cross-selling to the retail segment, emphasizing the younger customer demographic acquired through digital channels [27][30] Question: Increased competition and promotional activity - Management acknowledged the impact of new competition and promotional activity on operations, noting that while there may be temporary increases in costs, the company remains committed to delivering best-in-market offerings [34][36] Question: Customer retention strategies post-rebranding - Management expressed confidence in retaining customers during the transition to theScore Bet, highlighting improvements in product quality and user experience [70][71] Question: Future growth opportunities in Canada - Management indicated that while there are limited retail property options in Canada, they remain open to opportunistic acquisitions that align with their omnichannel strategy [61] Question: Leverage targets for the business - Management stated that the optimal leverage level is below five times, with a focus on balancing share repurchases, growth investments, and debt reduction [62]

Financial Data and Key Metrics Changes - The Retail segment generated revenues of $1.4 billion with adjusted EBITDAR of $465.8 million, resulting in segment adjusted EBITDAR margins of 32.8% [16] - The Interactive segment reported revenues of $297.7 million, including a tax gross-up of $139.5 million, and an adjusted EBITDA loss of $76.6 million [18] - Total liquidity at the end of 2025 was $1.1 billion, including $660 million in cash and cash equivalents [20] Business Line Data and Key Metrics Changes - The North America iCasino business achieved its highest quarterly gaming revenue to date, improving nearly 40% year over year, driven by record cross-sell from OSB of 62% [8] - The introduction of a standalone app and improved cross-sell from online sports betting led to a 79% increase in iCasino monthly active users (MAUs) during the third quarter [9] - The company expects fourth quarter 2025 revenues for the Retail segment to range from $1.41 billion to $1.43 billion, with adjusted EBITDAR ranging from $455 million to $475 million [18] Market Data and Key Metrics Changes - The company noted stable demand across gaming and non-gaming amenities, particularly in markets not impacted by new supply and increased competitor promotional activity [11] - The new Hollywood Casino in Joliet has seen a 42% increase in its active database since opening, with over 50% of that growth coming from previously inactive customers [12] Company Strategy and Development Direction - The company is shifting its interactive focus to prioritize digital assets in Canada and Hollywood iCasino products, emphasizing cross-sell opportunities across its ecosystem [5] - The transition to the Score Bet brand is expected to optimize the digital business and operate more efficiently, including replacing fixed media spends with performance-based marketing [7] - The company plans to continue investing in growth capital while also focusing on share repurchases and deleveraging [22][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning to compete effectively in the evolving industry landscape, highlighting the importance of an omnichannel strategy [28] - The company aims to achieve breakeven or better in its interactive segment by 2026, with a focus on profitability and operational efficiency [10][96] - Management acknowledged the challenges posed by increased competition and promotional activity but remains optimistic about the company's ability to maintain its market position [41][44] Other Important Information - The company announced an early termination of its exclusive online sports betting marketing agreement with ESPN, ceasing cash payments at the end of 2025 [15] - A total of $38.1 million will be paid to ESPN for marketing services incurred through December 1, with an additional $5 million for traditional media support [15] - The company has repurchased $354 million of shares as of November 5, with a new three-year $750 million share repurchase authorization commencing on January 1, 2026 [21] Q&A Session Summary Question: Can you talk about the near-term and long-term profitability for interactive following the ESPN exit? - Management highlighted that the digital investments aimed to attract younger customers and cross-sell to retail businesses, with a focus on profitability moving forward [32][34][38] Question: How has increased competition and promotional activity impacted operations? - Management noted that while new competition has led to increased marketing costs, properties not impacted by new supply are performing well [41][44] Question: Can you clarify the expected marketing costs post-ESPN? - Management indicated that marketing costs will be significantly lower than those previously paid to ESPN, allowing for more targeted spending in high-return markets [48][49] Question: What are the strategies for customer retention during the rebranding to Score Bet? - Management expressed confidence in retaining customers due to improved user experience and a comprehensive marketing plan, emphasizing that the app experience will remain unchanged [84][90] Question: What is the company's leverage target moving forward? - Management stated that the optimal lease-adjusted leverage level is below five times, with a focus on deleveraging while remaining opportunistic in capital allocation [76][78]

Digital Focus Realignment - The company is realigning its digital focus to leverage the strength of U.S iCasino and Canadian operations, emphasizing omnichannel benefits[7, 9] - The company will rebrand U S OSB product to theScore Bet on December 1, 2025, retaining a database of 2.9 million digital users[8] - The company's iCasino business achieved its highest quarterly gaming revenue to date, driven by record cross-sell from OSB and growth from standalone apps[7] Share Repurchase and Capital Allocation - The company repurchased $354 million of shares through November 5, 2025, and the board authorized a new three-year $750 million share repurchase program effective January 1, 2026[7] Omnichannel Strategy and Database Growth - 37% of digitally acquired customers are within 50 miles of one or more retail properties[13] - 64% of PENN Play database growth since 2019 is from digital customers[15] - Omnichannel customers have 6x the value and 3x the retention compared to single-channel customers[15] iCasino Growth and Retail Customer Engagement - Q3 2025 iCasino NGR growth was +41% year-over-year, with MAU growth of +79% year-over-year[18] - In Q3 2025, the record cross-sell percentage in iCasino was 62%[18] - The percentage of the active retail database also active online in states with retail, OSB, and iCasino (PA, MI, WV) reached 14.4% in September 2025[20] Canadian Market Opportunity - Ontario OSB & iCasino growth was +7% year-over-year (September 2025 YTD)[22] - The company expects to launch in Alberta in 2026 for OSB & iCasino, covering approximately 12% of the Canadian population[10, 23] Product Improvements and Retention - Enhanced OSB product features led to a +410 bps increase in SGP % Mix of Handle and a +800 bps increase in % of MAUs Live Betting (Y/Y in Oct-25)[25] - Improved retention efforts resulted in a +32% increase in M/M Retained Users (Y/Y in Oct-25) and a +1,000 bps increase in M/M Retention % (Y/Y in Sep-Oct 2025)[25] Retail Business Stability - The total retail portfolio saw revenue growth of +1.5% and EBITDAR growth of +3.5% year-over-year in Q3[28] - Excluding certain properties, revenue grew by +1.2% and EBITDAR grew by +2.3%[28] Hollywood Casino Joliet Performance - Hollywood Casino Joliet saw a +42% growth in active database (Q3-25 vs Q2-25)[35]