The following discussion and analysis of financial condition, results of operations, liquidity and capital resources should be read in conjunction with, and is qualified in its entirety by, the unaudited Consolidated Financial Statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the Consolidated Financial Statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2025.
EXECUTIVE OVERVIEW
Our Business
PENN Entertainment, Inc., together with its subsidiaries (“PENN,” or the “Company,” “we,” “our,” or “us”), operates in 28 jurisdictions throughout North America, with a broadly diversified portfolio of casinos, racetracks, and online sports betting (“OSB”) and iCasino offerings. PENN’s focus is on organic cross-sell opportunities, reinforced by its market-leading retail casinos, sports media assets and technology, including a proprietary state-of-the-art, fully integrated digital sports betting and iCasino platform, and an in-house iCasino content studio. The Company’s portfolio is further bolstered by its industry-leading PENN PlayTM customer loyalty program, offering its over 34 million members a unique set of rewards and experiences.
The majority of the real estate assets (i.e., land and buildings) used in our operations are subject to triple net master leases; the most significant of which are with Gaming and Leisure Properties, Inc. (Nasdaq: GLPI) (“GLPI”), a real estate investment trust (“REIT”), and include the AR PENN Master Lease, 2023 Master Lease, and Pinnacle Master Lease (as such terms are defined in Note 6, “Leases” in the notes to the unaudited Consolidated Financial Statements and collectively referred to as the “Master Leases”).
Strategic Overview
We believe that our portfolio of assets provides us with the benefit of geographically diversified cash flow from operations. We expect to continue to expand our gaming operations through the implementation and execution of a disciplined capital expenditure program at our existing properties, the pursuit of strategic acquisitions and investments, and the development of new gaming properties. Our sports media assets and proprietary OSB and iCasino technology reinforce our strategy to continue evolving from the nation’s largest regional gaming operator to a best-in-class omni-channel provider of retail gaming, iCasino, and sports betting entertainment. Additionally, our iCasino forward strategy with long-term alignment to our core business will focus on cross-sell opportunities across our ecosystem and enhanced connectivity to our PENN Play loyalty program.
Realignment of Digital Strategy
We have realigned our digital strategy to prioritize our U.S. iCasino and Canadian operations, with OSB, now offered in the U.S. under theScore Bet brand, and serving as a top-of-funnel customer acquisition and cross-sell channel. Our iCasino strategy is aligned with our core business, which emphasizes cross-sell opportunities across our ecosystem and enhanced connectivity with our PENN Play loyalty program. Our Hollywood-branded iCasino will remain integrated into our OSB product in jurisdictions where permitted, in addition to serving as a standalone iCasino app.
Recent Development Projects
On October 10, 2022, the Company announced its intent to pursue four new development projects, including the land-based relocations of Hollywood Casino Joliet (“Joliet”) and Hollywood Casino Aurora (“Aurora”), a second hotel tower at M Resort Spa Casino (“M Resort”), and a new hotel at Hollywood Casino Columbus (“Columbus”).
Subsequently, on February 21, 2023, as described in Note 6, “Leases” in the notes to the unaudited Consolidated Financial Statements, the Company and GLPI entered into a master development agreement (the “Master Development Agreement”) related to these development projects.
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The Master Development Agreement provided that GLPI would fund (i) up to $225.0 million for the relocation of our riverboat casino and related developments with respect to Aurora (the “Aurora Project”); and (ii) upon our request, up to $130.0 million for the relocation of our riverboat casino and related developments with respect to Joliet (the “Joliet Project”), up to $150.0 million for the second hotel tower at M Resort (the “M Resort Project”), up to $70.0 million for the new hotel tower at Columbus (the “Columbus Project” and together with the Joliet Project and M Resort Project, the “Other Development Projects,” and together with the Aurora Project, referred to as the “PENN Development Projects”), all in accordance with certain terms and conditions set forth in the Master Development Agreement. GLPI had committed up to $225.0 million in funding for the Aurora Project at a 7.75% cap rate, which we were required to draw and the funding was structured as rent under the 2023 Master Lease (as described in Note 6, “Leases” in the notes to the unaudited Consolidated Financial Statements). Rent within the 2023 Master Lease increased by a percentage, based on the then-current GLPI stock price, of the project funding received by PENN from GLPI for the Other Development Projects.
The Aurora Project to relocate its riverboat casino operations to a new, land-based facility opened on June 24, 2026. The facility features approximately 1,200 gaming positions, including high-limit slots and table games, a baccarat room and a sportsbook. The property also includes a premium hotel with 226 rooms and suites, outdoor entertainment area, full-service spa, high-quality bars and restaurants including Sorella by Giada and Boulevard Food & Drink Hall, an approximately 12,000 square-foot event center with meeting areas and roughly 1,700 parking spaces. The Aurora Project included the transfer of certain parcels of land from the City of Aurora, and up to $50.0 million of the project will be funded by the city through a new bond issuance. As of August 5, 2026, we have received $216.3 million in funding from GLPI (representing the $225.0 million commitment of GLPI less costs incurred by GLPI with respect to certain land parcels associated with the Aurora Project), resulting in a $17.4 million increase in annual rent, subject to annual escalation pursuant to the 2023 Master Lease. Additionally, the Company has received $35.9 million from the City of Aurora as of August 5, 2026.
The new hotel tower at Columbus opened on June 12, 2026. The 203-room hotel represents a major expansion, offering guests modern, upscale accommodations at the city’s premier gaming, dining and entertainment experience. The 150,000 square-foot tower features 183 standard rooms and 20 luxury suites, a full service bar and restaurant, conference rooms, fitness center and an outdoor seating terrace. We did not request or receive any funding from GLPI for the Columbus Project, and GLPI’s funding commitment expired on December 31, 2025.
The second hotel tower at M Resort opened on December 1, 2025. The M Resort Project added 375 rooms to the Company’s property south of the Las Vegas Strip, bringing its total to 765 rooms and suites. Along with the rooms, the project includes expanded meeting space, updated amenities, and additional local partnerships. On November 3, 2025, the Company received the full $150.0 million in committed funding from GLPI for the M Resort Project, resulting in an $11.7 million increase in annual rent, subject to annual escalation pursuant to the 2023 Master Lease.
The Joliet Project to relocate its riverboat casino operations to a new, state-of-the-art land-based facility opened on August 11, 2025. The best-in-class property features approximately 1,000 slots and 43 live table games, including high-limit slots and table games, a baccarat room, and a retail sportsbook. Its unique bars and restaurants include Sorellina by Giada De Laurentiis and Boulevard Food & Drink Hall. Additional features of the new property include an approximately 10,000 square foot, all-ages event center with meeting areas, and approximately 1,330 parking spaces. On August 1, 2025, the Company received the full $130.0 million in committed funding from GLPI for the Joliet Project, resulting in a $10.1 million increase in annual rent, subject to annual escalation pursuant to the 2023 Master Lease.
On April 24, 2025, the Company announced a development project to relocate its Ameristar Council Bluffs riverboat casino operations to a new, land-based property to be rebranded as Hollywood Casino Council Bluffs (“HCCB”). Under the proposed plan, the new HCCB is expected to include roughly 125,000 square feet of new development with approximately 58,000 square feet of gaming space and more than 1,000 positions on a single level. The new facility will complement the existing retail sportsbook, 160-room hotel, and dining options in the landside portion of the current infrastructure. The project is anticipated to cost between $180.0 million and $200.0 million and is expected to open in 2028. GLPI has committed to finance, at PENN’s request, up to $150.0 million of the project at a 7.1% cap rate, which may be structured at PENN’s option as either rent or a 5-year term loan that is prepayable at any time without penalty.
Operating and Competitive Environment
Most of our properties operate in mature, competitive markets. We expect the majority of our future growth to come from our OSB and iCasino businesses; improvements, expansions, or relocations of our existing properties; entrance into new jurisdictions or verticals; expansions of gaming in existing jurisdictions; strategic investments and acquisitions; and cross-sell opportunities between our retail gaming, OSB, and iCasino businesses. Our portfolio is comprised largely of well-maintained regional gaming facilities, which has allowed us to develop what we believe to be a solid base for future growth opportunities.
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We continuously adjust operations, offerings, and cost structures to reflect changing economic conditions, as well as consumer demand and behaviors. We also continue to focus on technology enhancements, and providing customers with additional gaming and entertainment experiences through our differentiated omni-channel strategy. We seek to grow our customer database and PENN Play loyalty program through our iCasino and OSB businesses, the development of new properties, the expansion of existing properties and other business lines, and through partnerships with third-party partners, such as Shake Shack Inc., Ticketmaster Entertainment, LLC, Norwegian Cruise Line Holdings Ltd., Live Nation Entertainment, Inc., and Choice Hotels International, Inc. In addition, we believe that our online gaming offerings, combined with other strategic relationships we have, or may develop in the future, should enable us to acquire new customers, expand our player database, and provide additional revenue streams that enhance our omni-channel strategy.
The gaming, media, and entertainment industries are characterized by an increasingly high degree of competition among a large number of participants. We compete with a variety of gaming operations, including casinos and hotel casinos of varying quality and size and other gaming options such as state and province-sponsored internet lotteries, sweepstakes, charitable gaming, video gaming terminals at bars, restaurants, taverns and truck stops, historical horse racing gaming terminals, illegal slot machines and skill games, fantasy sports and third-party internet or mobile-based gaming platforms, including both legal and illegal iCasino and sports betting operations, and emerging prediction markets. See the “Segment Comparison of the Three and Six Months Ended June 30, 2026 and 2025” section below for discussions on our results of operations by reportable segment.
Key Performance Indicators
In our business, revenue is driven by discretionary consumer spending. We have no certain mechanism for determining why consumers choose to spend more or less money at our properties or on our online offerings from period-to-period; therefore, we are unable to quantify a dollar amount for each factor that impacts our customers’ spending behaviors. However, based on our experience, we can generally offer some insight into the factors that we believe are likely to account for such changes and which factors may have a greater impact than others. For example, decreases in discretionary consumer spending have historically been brought about by actual or perceived weakened general economic conditions, such as recessions, inflation, rising interest rate environments, tight credit conditions, high unemployment levels, higher income taxes, low levels of consumer confidence, weakness in the housing market, high fuel or other transportation costs, global hostilities, political or social unrest, and the effects of pandemics. In addition, visitation and the volume of play have historically been negatively impacted by significant construction surrounding our properties, adverse regional weather conditions, and natural disasters. In all instances, such insights are based solely on our judgment and professional experience, and no assurance can be given as to the accuracy of our judgments.
The majority of our revenues is gaming revenue, which is highly dependent upon the volume and spending levels of customers at our properties. Our gaming revenue is derived primarily from slot machines (which represented approximately 86% of our gaming revenue for the six months ended June 30, 2026 and 2025, respectively) and, to a lesser extent, table games, OSB, and iCasino. Aside from gaming revenue, our revenues are primarily derived from our hotel, dining, retail, commissions, program sales, admissions, concessions and certain other ancillary activities, and our racing operations.
Key performance indicators related to gaming revenue are slot handle and table game drop, which are volume indicators, and “win” or “hold” percentage. Our typical property slot win percentage is in the range of approximately 5% to 11% of slot handle, and our typical table game hold percentage is in the range of approximately 12% to 30% of table game drop.
Slot handle is the gross amount wagered during a given period. The win or hold percentage is the net amount of gaming wins and losses, with liabilities recognized for accruals related to the anticipated payout of progressive jackpots. Given the stability in our slot hold percentages on a historical basis, we have not experienced significant impacts to net income from changes in these percentages. For table games, customers usually purchase chips at the tables. The cash and markers (extensions of credit granted to certain credit-worthy customers) are deposited in the gaming table’s drop box. Table game hold is the amount of drop that is retained and recorded as gaming revenue, with liabilities recognized for funds deposited by customers before gaming play occurs and for unredeemed gaming chips. As we are primarily focused on regional gaming markets, our table game hold percentages are fairly stable as the majority of these markets do not regularly experience high-value play, which can lead to volatility in hold percentages. Therefore, changes in table game hold percentages do not typically have a material impact to our results of operations and cash flows.
Key performance indicators related to online gaming revenue, including OSB and iCasino, are handle, which is a volume indicator, and “win” or “hold” percentage. Our OSB win percentage is in the range of approximately 4.6% to 9.8% of online handle and our iCasino win percentage is in the range of approximately 1.6% to 5.8% of online handle.
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For online gaming, customers deposit cash into their online accounts for use in OSB and iCasino play. Liabilities are recognized for online player account funds that have not been withdrawn and for wagers that have been placed on events that have not yet occurred. Online sportsbook handle is the gross amount wagered during a given period. The win or hold percentage is the net amount of gaming wins and losses, with liabilities recognized for any bonus funds deposited into player accounts. Given that OSB wagers are made based on the outcomes of future sporting events, the win or hold percentage can vary based on the bet type (i.e., straight wagers vs. parlay wagers). Online slot handle is the gross amount wagered during a given period. The win or hold percentage is the net amount of gaming wins and losses, with liabilities recognized for accruals related to the anticipated payout of online progressive jackpots. Given the stability in our online slot hold percentages on a historical basis, we have not experienced significant impacts to the results of our operations or cash flows from changes in these percentages. Online table game hold is the amount of handle that is retained and recorded as gaming revenue. Our online table game hold percentages are fairly stable as we do not regularly experience high-value online play, which can lead to volatility in hold percentages. Given the stability in our online table game hold percentages on a historical basis, we have not experienced significant impacts to the results of our operations or cash flows from changes in these percentages.
Under normal operating conditions, our properties generate significant operating cash flow since most of our revenue is cash-based from slot machines and table games. Our business is capital intensive and we rely on cash flow from our properties to generate sufficient cash to satisfy our obligations under the Triple Net Leases (as defined in “Liquidity and Capital Resources”), repay debt, fund maintenance capital expenditures, repurchase our common stock, fund new capital projects at existing properties, and provide excess cash for future development and acquisitions. Additional information regarding our capital projects is discussed in “Liquidity and Capital Resources” below.
Reportable Segments
We have five reportable segments: Northeast, South, West, Midwest, and Interactive. The Northeast, South, West, and Midwest segments (referred to as our “retail segments”) primarily generate revenue from gaming operations (such as slot machines and table games), food and beverage offerings, and hotel visitation. The Interactive segment includes all of our OSB, online casino/iCasino, and social gaming (collectively referred to as “online gaming”) operations, management of retail sports betting, and media operations.
Our gaming and racing properties are grouped by geographic location, and each is viewed as an operating segment with the exception of our two properties in Jackpot, Nevada, which are viewed as one operating segment. We consider our combined Video Gaming Terminal (“VGT”) operations, by state, to be separate operating segments. For a listing of our gaming properties and VGT operations included in each reportable segment, see Note 2, “Significant Accounting Policies and Basis of Presentation” in the notes to the unaudited Consolidated Financial Statements.
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RESULTS OF OPERATIONS
The following table highlights our revenues, reportable segment revenues, net income (loss), Consolidated Adjusted EBITDA, and Segment Adjusted EBITDAR. Such segment reporting is consistent with how we measure our business and allocate resources internally. We consider net income (loss) to be the most directly comparable financial measure calculated in accordance with generally accepted accounting principles in the United States (“GAAP”) to Consolidated Adjusted EBITDA, which is a non-GAAP financial measure. Refer to “Reportable Segment Measures” below for the definition of Segment Adjusted EBITDAR. Refer to “Non-GAAP Financial Measure” below for the definition of Consolidated Adjusted EBITDA as well as a reconciliation of net income (loss) to Consolidated Adjusted EBITDA.
For the three months ended June 30, For the six months ended June 30,
(in millions) 2026 2025 2026 2025
Revenues:
Northeast segment $ 731.6 $ 711.6 $ 1,418.7 $ 1,392.5
South segment 301.9 302.2 583.1 590.5
West segment 151.5 137.7 297.2 267.4
Midwest segment 320.6 297.0 626.5 579.9
Interactive segment 349.4 316.1 707.7 606.2
Other (1) 5.6 5.7 10.9 11.0
Intersegment eliminations (2) (3.2) (5.3) (7.7) (10.0)
Total $ 1,857.4 $ 1,765.0 $ 3,636.4 $ 3,437.5
Net income (loss) $ 32.6 $ (18.3) $ 29.8 $ 93.2
Segment Adjusted EBITDAR (3):
Northeast segment $ 220.2 $ 209.5 $ 414.7 $ 403.7
South segment 109.0 104.8 213.2 208.1
West segment 55.0 53.5 109.0 99.2
Midwest segment 133.0 121.8 251.7 235.6
Interactive segment (9.5) (62.0) (20.4) (151.0)
Other (1) (31.8) (35.5) (63.2) (74.3)
Rent expense associated with triple net operating leases (4) (163.3) (156.0) (326.6) (311.9)
Consolidated Adjusted EBITDA (5) $ 312.6 $ 236.1 $ 578.4 $ 409.4
(1)The Other category, included in the tables to reconcile the segment information to the consolidated information, consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club, Sam Houston and Valley Race Park, and our management contract for Retama Park Racetrack. Expenses incurred for corporate and shared services activities that are directly attributable to a property or are otherwise incurred to support a property are allocated to each property. The Other category also includes corporate overhead, which consists of certain expenses, such as: payroll, professional fees, travel expenses, and other general and administrative expenses that do not directly relate to or have not otherwise been allocated. Corporate overhead was $29.5 million and $38.7 million for the three months ended June 30, 2026 and 2025, respectively, and $57.7 million and $74.7 million for the six months ended June 30, 2026 and 2025, respectively. Corporate overhead for the three and six months ended June 30, 2025 included $9.4 million and $17.1 million, respectively, of legal and advisory costs related to activist activity in connection with our 2025 annual meeting of shareholders.
(2)Primarily represents the elimination of intersegment revenues associated with our retail sportsbooks, which are operated by PENN Interactive.
(3)See definition of “Segment Adjusted EBITDAR” within the “Reportable Segment Measures” section below.
(4)Pertains to the following operating leases: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease (for the period January 1, 2025 to June 30, 2025); (iv) Greektown Lease (for the period January 1, 2025 to June 30, 2025); and (v) VICI Master Lease (for the period January 1, 2026 to June 30, 2026).
(5)See definition of Consolidated Adjusted EBITDA within the “Non-GAAP Financial Measure” section below.
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Consolidated Comparison of the Three and Six Months Ended June 30, 2026 and 2025
Revenues
The following table presents our consolidated revenues:
For the three months ended June 30, Change For the six months ended June 30, Change
(dollars in millions) 2026 2025 $ % 2026 2025 $ %
Revenues
Gaming $ 1,396.6 $ 1,367.7 $ 28.9 2.1 % $ 2,730.9 $ 2,666.0 $ 64.9 2.4 %
Food, beverage, hotel, and other 460.8 397.3 63.5 16.0 % 905.5 771.5 134.0 17.4 %
Total revenues $ 1,857.4 $ 1,765.0 $ 92.4 5.2 % $ 3,636.4 $ 3,437.5 $ 198.9 5.8 %
Gaming revenues for the three and six months ended June 30, 2026 increased by $28.9 million and $64.9 million, respectively, compared to the corresponding prior year periods. Increased spend per visit contributed to the growth in gaming revenues at our retail segments. Strong performance across our portfolio and incremental contributions from our four recently completed development projects delivered record revenues at nine of our retail properties. The opening of our new land-based Joliet facility on August 11, 2025, second hotel tower at M Resort on December 1, 2025, and new hotel tower at Hollywood Casino Columbus on June 12, 2026 contributed to increases in gaming revenues during the current year periods. Increases in gaming revenues within our retail segments were partially offset by decreases in online gaming revenues, particularly online sports revenues, within our Interactive segment due to lower handle compared to the corresponding prior year periods. For the six months ended June 30, 2026, increases in gaming revenues at our Northeast, West, and Midwest segments were also offset by a decrease in gaming revenues within our South segment as new supply continues to impact visitation and weather events negatively impacted revenues during the first quarter of 2026.
Food, beverage, hotel, and other revenues for the three and six months ended June 30, 2026 increased by $63.5 million and $134.0 million, respectively, compared to the corresponding prior year periods. The increases were primarily due to increases in gaming tax reimbursement amounts related to third-party OSB and/or iCasino partners for OSB and iCasino market access of $47.6 million and $105.2 million, respectively, compared to the corresponding prior year periods. Additionally, the recent openings of the second hotel tower at M Resort and our new land-based Joliet facility contributed to increases in hotel and food and beverage revenues within our West and Midwest segments, respectively, as discussed above.
See “Segment Comparison of the Three and Six Months Ended June 30, 2026 and 2025” below for more detailed explanations of the fluctuations in revenues.
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Operating expenses
The following table presents our consolidated operating expenses:
For the three months ended June 30, Change For the six months ended June 30, Change
(dollars in millions) 2026 2025 $ % 2026 2025 $ %
Operating expenses
Gaming $ 833.2 $ 869.7 $ (36.5) (4.2) % $ 1,641.1 $ 1,723.5 $ (82.4) (4.8) %
Food, beverage, hotel, and other 333.7 282.0 51.7 18.3 % 663.1 546.9 116.2 21.2 %
General and administrative 441.0 410.3 30.7 7.5 % 868.7 813.3 55.4 6.8 %
Depreciation and amortization 117.8 110.5 7.3 6.6 % 234.8 218.5 16.3 7.5 %
Impairment loss — 15.0 (15.0) N/M — 15.0 (15.0) N/M
Total operating expenses $ 1,725.7 $ 1,687.5 $ 38.2 2.3 % $ 3,407.7 $ 3,317.2 $ 90.5 2.7 %
Gaming expenses primarily consist of gaming taxes, payroll, marketing and promotional expenses, and other expenses associated with our gaming operations. Gaming expenses for the three and six months ended June 30, 2026 decreased by $36.5 million and $82.4 million, respectively, compared to the corresponding prior year periods, due primarily to decreases in marketing expenses at our Interactive segment. During the corresponding prior year periods, we incurred additional marketing expenses to support our promotion of ESPN BET within our Interactive segment. The decrease in gaming expenses was partially offset by increases in gaming taxes at our Northeast, Midwest, and West segments related to increased gaming revenues as discussed above.
Food, beverage, hotel, and other expenses consist primarily of payroll expenses, costs of goods sold, and other costs associated with our food, beverage, hotel, retail, racing, and Interactive operations. Food, beverage, hotel, and other expenses for the three and six months ended June 30, 2026 increased by $51.7 million and $116.2 million, respectively, compared to the corresponding prior year periods, primarily due to increases in gaming tax reimbursement amounts related to third-party OSB and/or iCasino partners for OSB and iCasino market access.
General and administrative expenses include items such as compliance, facility maintenance, utilities, property and liability insurance, surveillance and security, and lobbying expenses, as well as all expenses for administrative departments such as accounting, purchasing, human resources, legal and internal audit. General and administrative expenses also include stock-based compensation expense; pre-opening expenses; acquisition and transaction costs; gains and losses on disposal of assets; insurance recoveries, net of deductible charges; changes in the fair value of our contingent purchase price obligations; expense associated with cash-settled stock-based awards (including changes in fair value thereto); and rent expense associated with our triple net operating leases.
For the three and six months ended June 30, 2026, general and administrative expenses increased by $30.7 million and $55.4 million, respectively, compared to the corresponding prior year periods, primarily due to transaction costs and pre-opening expenses related to the Aurora Project and the Columbus Project, as well as increases in rent expense due to the 2023 Master Lease modifications associated with the PENN Development Projects, as discussed above in the “Executive Overview.” For the six months ended June 30, 2026, general and administrative expenses also included settlement costs and related legal and advisory fees associated with the Cooperation Agreement with HG Vora Capital Management, LLC and related parties, as well as non-recurring restructuring charges (primarily severance) related to the Company’s new corporate organizational structure. For the three and six months ended June 30, 2025, general and administrative expenses also included legal and advisory costs related to activist activity incurred in connection with our 2025 annual meeting of shareholders of $9.4 million and $17.1 million, respectively.
Depreciation and amortization for the three and six months ended June 30, 2026 increased $7.3 million and $16.3 million, respectively, compared to the corresponding prior year periods, primarily due to the opening of our new land-based Joliet facility on August 11, 2025 and the opening of the second hotel tower at M Resort on December 1, 2025.
Impairment loss for both the three and six months ended June 30, 2025 related to an impairment charge of $15.0 million at our Ameristar Council Bluffs property on its trademark as a result of the strategic decision to rebrand Ameristar Council Bluffs to Hollywood Casino Council Bluffs.
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Other income (expenses)
The following table presents our consolidated other income (expenses):
For the three months ended June 30, Change For the six months ended June 30, Change
(in millions) 2026 2025 $ % 2026 2025 $ %
Other income (expenses)
Interest expense, net $ (100.9) $ (95.9) $ (5.0) 5.2 % $ (201.8) $ (206.7) $ 4.9 (2.4) %
Interest income $ 2.0 $ 2.1 $ (0.1) (4.8) % $ 3.8 $ 5.3 $ (1.5) (28.3) %
Income from unconsolidated affiliates $ 8.6 $ 13.3 $ (4.7) (35.3) % $ 16.9 $ 20.9 $ (4.0) (19.1) %
Gain on financing arrangement $ — $ — $ — N/M $ — $ 215.1 $ (215.1) N/M
Loss on early extinguishment of debt $ (1.8) $ (11.8) $ 10.0 (84.7) % $ (1.8) $ (11.8) $ 10.0 (84.7) %
Other $ 0.1 $ 2.9 $ (2.8) (96.6) % $ (0.2) $ 4.2 $ (4.4) N/M
Income tax expense $ (7.1) $ (6.4) $ (0.7) 10.9 % $ (15.8) $ (54.1) $ 38.3 (70.8) %
N/M - Not meaningful
Interest expense, net increased by $5.0 million for the three months ended June 30, 2026, compared to the corresponding prior year period, primarily due to the Company completing an offering of $600.0 million aggregate principal amount of 6.75% senior unsecured notes in the first quarter of 2026 and a reduction in capitalized interest upon completion of the PENN Development Projects. The increase was partially offset by a 50 basis point reduction in interest rates on our Amended Term Loan B Facility stemming from the execution of the Fourth Amendment Agreement to the Second Amended and Restated Credit Agreement. See Note 5, “Long-Term Debt” to the unaudited Consolidated Financial Statements for additional details.
Interest expense, net decreased by $4.9 million for the six months ended June 30, 2026, compared to the corresponding prior year period, due to the first quarter of 2025 including interest expense related to the Company’s financing arrangement, which upon derecognition, resulted in the “Gain on financing arrangement” described below. The year-to-date decrease was partially offset by the increase in interest expense, net during the three months ended June 30, 2026 as described above.
Interest income decreased by $0.1 million and $1.5 million for the three and six months ended June 30, 2026, respectively, compared to the corresponding prior year periods, primarily due to decreases in the amount invested in money market funds, which we use for short term investing.
Income from unconsolidated affiliates relates primarily to our investment in Kansas Entertainment joint venture. The change in income from the corresponding prior year period is due to fluctuations in earnings from our investments in these unconsolidated affiliates. Additionally, the prior year periods included our share of income from our Freehold Raceway joint venture.
Gain on financing arrangement relates to a $215.1 million non-cash gain on a financing arrangement during the three months ended March 31, 2025. See Note 5, “Long-Term Debt” to the unaudited Consolidated Financial Statements for additional details.
Loss on early extinguishment of debt for the current periods relates to the refinancing transactions of the Company’s Amended Revolving Credit Facility, Amended Term Loan A Facility, and Amended Term Loan B Facility in the second quarter of 2026. The loss on early extinguishment of debt for the corresponding prior year periods relates to the repurchase of the 2.75% convertible notes due 2026 (the “Convertible Notes”). For further discussion on the refinancing and repurchase transactions, see Note 5, “Long-Term Debt,” to our unaudited Consolidated Financial Statements.
Other primarily consisted of foreign currency revaluation for the three and six months ended June 30, 2026. The corresponding prior year period primarily consisted of realized and unrealized gains and losses on equity securities held by PENN Interactive, as well as miscellaneous income and expense items. The equity securities were sold during the second quarter of 2025.
Income tax expense was $7.1 million and $6.4 million for the three months ended June 30, 2026 and 2025, respectively, and $15.8 million and $54.1 million for the six months ended June 30, 2026 and 2025, respectively. The effective tax rate (income taxes as a percentage of income from operations before income taxes), including discrete items was 11.3% and 18.4% for the three and six months ended June 30, 2026, respectively.
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We excluded certain foreign losses from our worldwide effective tax rate calculation due to a year-to-date ordinary loss for which no benefit may be recognized. The change in the effective tax rate for the three and six months ended June 30, 2026, as compared to the corresponding prior periods was primarily due to: (i) excluding certain foreign losses for which no tax benefit can be recognized in our worldwide effective tax rate calculation; (ii) non-deductible permanent items; (iii) state taxes; and (iv) changes in uncertain tax positions. See Note 8, “Income Taxes” to the unaudited Consolidated Financial Statements for additional details.
Our effective income tax rate may vary each reporting period depending on, among other factors, the geographic and business mix of our earnings, changes to our valuation allowances, and the level of our tax credits. These and other factors, including our history and projections of pre-tax earnings, are considered in assessing the realizability of our net deferred tax assets.
On June 29, 2026, the Indiana Supreme Court ruled in the Company’s favor with respect to its Indiana wagering tax add-back position for the 2015 through 2017 tax years, reversing a prior decision of the Indiana Tax Court. As a result, the Company reversed the previously recorded unrecognized tax benefits and corresponding accrued interest, which was recognized as a discrete benefit during the quarter. The Company continues to maintain reserves associated with subsequent tax years pending resolution of those periods.
Segment Comparison of the Three and Six Months Ended June 30, 2026 and 2025
Northeast Segment
For the three months ended June 30, Change For the six months ended June 30, Change
(dollars in millions) 2026 2025 $ % 2026 2025 $ %
Revenues
Gaming $ 654.8 $ 635.7 $ 19.1 3.0 % $ 1,270.2 $ 1,246.3 $ 23.9 1.9 %
Food, beverage, hotel, and other 76.8 75.9 0.9 1.2 % 148.5 146.2 2.3 1.6 %
Total revenues $ 731.6 $ 711.6 $ 20.0 2.8 % $ 1,418.7 $ 1,392.5 $ 26.2 1.9 %
Adjusted EBITDAR $ 220.2 $ 209.5 $ 10.7 5.1 % $ 414.7 $ 403.7 $ 11.0 2.7 %
Adjusted EBITDAR margin 30.1 % 29.4 % 70 bps 29.2 % 29.0 % 20 bps
The Northeast segment’s revenues for the three and six months ended June 30, 2026 increased by $20.0 million and $26.2 million, respectively, compared to the corresponding prior year periods, primarily due to increases in gaming revenues, particularly slots revenues, as well as increases in hotel revenue. The current year periods benefited from the opening of the new hotel tower at Hollywood Casino Columbus on June 12, 2026, which, along with four of our other Northeast segment properties, had record revenues during the second quarter of 2026.
For the three and six months ended June 30, 2026, the Northeast segment’s Adjusted EBITDAR increased $10.7 million and $11.0 million, respectively, and Adjusted EBITDAR margin increased to 30.1% and 29.2%, respectively, primarily due to increases in gaming revenues discussed above.
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South Segment
For the three months ended June 30, Change For the six months ended June 30, Change
(dollars in millions) 2026 2025 $ % 2026 2025 $ %
Revenues
Gaming $ 225.6 $ 224.9 $ 0.7 0.3 % $ 437.7 $ 445.6 $ (7.9) (1.8) %
Food, beverage, hotel, and other 76.3 77.3 (1.0) (1.3) % 145.4 144.9 0.5 0.3 %
Total revenues $ 301.9 $ 302.2 $ (0.3) (0.1) % $ 583.1 $ 590.5 $ (7.4) (1.3) %
Adjusted EBITDAR $ 109.0 $ 104.8 $ 4.2 4.0 % $ 213.2 $ 208.1 $ 5.1 2.5 %
Adjusted EBITDAR margin 36.1 % 34.7 % 140 bps 36.6 % 35.2 % 140 bps
The South segment’s revenues for the three months ended June 30, 2026 decreased by $0.3 million, compared to the prior year period, primarily due to a decrease in food and beverage revenues, partially offset by an increase in gaming revenues.
The South segment’s revenues for the six months ended June 30, 2026 decreased by $7.4 million, compared to the prior year period, primarily due to a decrease in gaming revenues as increased competition and severe weather events negatively impacted several of our properties during the first quarter of 2026, partially offset by an increase in food and beverage revenues.
For the three months ended June 30, 2026, the South segment’s Adjusted EBITDAR increased by $4.2 million and Adjusted EBITDAR margin increased to 36.1%, primarily due to decreases in labor costs and general and administrative expenses.
For the six months ended June 30, 2026, the South segment’s Adjusted EBITDAR increased by $5.1 million and Adjusted EBITDAR margin increased to 36.6%, primarily due to a one-time favorable adjustment related to a legal accrual in the first quarter of 2026.
West Segment
For the three months ended June 30, Change For the six months ended June 30, Change
(dollars in millions) 2026 2025 $ % 2026 2025 $ %
Revenues
Gaming $ 102.2 $ 97.8 $ 4.4 4.5 % $ 200.3 $ 188.8 $ 11.5 6.1 %
Food, beverage, hotel, and other 49.3 39.9 9.4 23.6 % 96.9 78.6 18.3 23.3 %
Total revenues $ 151.5 $ 137.7 $ 13.8 10.0 % $ 297.2 $ 267.4 $ 29.8 11.1 %
Adjusted EBITDAR $ 55.0 $ 53.5 $ 1.5 2.8 % $ 109.0 $ 99.2 $ 9.8 9.9 %
Adjusted EBITDAR margin 36.3 % 38.9 % (260) bps 36.7 % 37.1 % (40) bps
The West segment’s revenues for the three and six months ended June 30, 2026 increased by $13.8 million and $29.8 million, respectively, compared to the corresponding prior year periods, due to increases in both gaming revenues and food, beverage, hotel, and other revenues. Increases during the three and six months ended June 30, 2026 were driven primarily by the opening of the second hotel tower at M Resort on December 1, 2025, which, along with one of our other West segment properties, had record revenues during the second quarter of 2026.
For the three and six months ended June 30, 2026, the West segment’s Adjusted EBITDAR increased by $1.5 million and $9.8 million, respectively, primarily due to the increases in revenues discussed above.
For the three and six months ended June 30, 2026, the West segment’s Adjusted EBITDAR margin decreased to 36.3% and 36.7%, respectively, primarily due to a one-time favorable adjustment in the prior year period coupled with a one-time unfavorable legal settlement in the current year period.
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Midwest Segment
For the three months ended June 30, Change For the six months ended June 30, Change
(dollars in millions) 2026 2025 $ % 2026 2025 $ %
Revenues
Gaming $ 284.7 $ 263.9 $ 20.8 7.9 % $ 557.3 $ 516.2 $ 41.1 8.0 %
Food, beverage, hotel, and other 35.9 33.1 2.8 8.5 % 69.2 63.7 5.5 8.6 %
Total revenues $ 320.6 $ 297.0 $ 23.6 7.9 % $ 626.5 $ 579.9 $ 46.6 8.0 %
Adjusted EBITDAR $ 133.0 $ 121.8 $ 11.2 9.2 % $ 251.7 $ 235.6 $ 16.1 6.8 %
Adjusted EBITDAR margin 41.5 % 41.0 % 50 bps 40.2 % 40.6 % (40) bps
The Midwest segment’s revenues for the three and six months ended June 30, 2026 increased by $23.6 million and $46.6 million, respectively, compared to the corresponding prior year periods, primarily due to increases in gaming revenues driven by the relocation of Joliet from a riverboat casino operation to a new land-based facility that opened on August 11, 2025. Additionally, two of our other Midwest segment properties had record revenues during the second quarter of 2026.
For the three and six months ended June 30, 2026, the Midwest segment’s Adjusted EBITDAR increased by $11.2 million and $16.1 million, respectively, due to the increase in revenues discussed above.
For the three months ended June 30, 2026, Adjusted EBITDAR margin increased to 41.5% primarily due to the increases in gaming revenues discussed above and a one-time favorable property tax adjustment. For the six months ended June 30, 2026, Adjusted EBITDAR margin decreased to 40.2%, primarily due to increases in marketing expenses, labor costs, and gaming taxes, partially offset by the increases in revenue and the property tax adjustment, both as discussed above.
Interactive Segment
For the three months ended June 30, Change For the six months ended June 30, Change
(dollars in millions) 2026 2025 $ % 2026 2025 $ %
Revenues
Gaming $ 129.3 $ 145.4 $ (16.1) (11.1) % $ 265.4 $ 269.1 $ (3.7) (1.4) %
Food, beverage, hotel, and other (1) 220.1 170.7 49.4 28.9 % 442.3 337.1 105.2 31.2 %
Total revenues $ 349.4 $ 316.1 $ 33.3 10.5 % $ 707.7 $ 606.2 $ 101.5 16.7 %
Adjusted EBITDA $ (9.5) $ (62.0) $ 52.5 (84.7) % $ (20.4) $ (151.0) $ 130.6 (86.5) %
Adjusted EBITDA margin (2.7) % (19.6) % N/M (2.9) % (24.9) % N/M
(1) - “Food, beverage, hotel, and other” only includes “other” revenue.
N/M - Not meaningful
The Interactive segment’s revenues for the three and six months ended June 30, 2026 increased by $33.3 million and $101.5 million, respectively, compared to the corresponding prior year periods, primarily due to increases in other revenues. Other revenues include gaming tax amounts related to third-party OSB and/or iCasino partners for OSB and iCasino market access of $185.5 million and $137.9 million for the three months ended June 30, 2026 and 2025, respectively, and $371.3 million and $266.1 million for the six months ended June 30, 2026 and 2025, respectively. Increases to other revenue were partially offset by decreases to gaming revenues, particularly online sports revenues, due to lower handle compared to the corresponding prior year periods.
For the three and six months ended June 30, 2026, the Interactive segment’s Adjusted EBITDA and Adjusted EBITDA margin increased primarily due to decreases in marketing expense and labor costs.
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Other
For the three months ended June 30, Change For the six months ended June 30, Change
(dollars in millions) 2026 2025 $ % 2026 2025 $ %
Revenues
Food, beverage, hotel, and other $ 5.6 $ 5.7 $ (0.1) (1.8) % $ 10.9 $ 11.0 $ (0.1) (0.9) %
Total revenues $ 5.6 $ 5.7 $ (0.1) (1.8) % $ 10.9 $ 11.0 $ (0.1) (0.9) %
Adjusted EBITDAR $ (31.8) $ (35.5) $ 3.7 (10.4) % $ (63.2) $ (74.3) $ 11.1 (14.9) %
Other consists of the Company’s stand-alone racing operations, as well as corporate overhead expenses, which primarily include certain expenses such as payroll, professional fees, travel expenses, and other general and administrative expenses that do not directly relate to or have not otherwise been allocated. Revenues for the three and six months ended June 30, 2026 remained relatively flat compared to the prior year periods.
Corporate overhead expenses were $29.5 million and $38.7 million for the three months ended June 30, 2026 and 2025, respectively, and $57.7 million and $74.7 million for the six months ended June 30, 2026 and 2025, respectively. Corporate overhead expenses for the three and six months ended June 30, 2025 included $9.4 million and $17.1 million, respectively, of legal and advisory costs related to activist activity in connection with our 2025 annual meeting of shareholders.
Changes in Adjusted EBITDAR for the three and six months ended June 30, 2026 primarily relate to the prior year periods including $9.4 million and $17.1 million, respectively, of legal and advisory costs as described above.
Reportable Segment Measures
Segment Adjusted EBITDAR is our measure of profit or loss for our reportable segments and underlying operating segments. We define Segment Adjusted EBITDAR as earnings before interest expense, net, interest income, income taxes, depreciation and amortization, stock-based compensation, debt extinguishment charges, impairment losses, insurance recoveries, net of deductible charges, changes in the estimated fair value of our contingent purchase price obligations, gain or loss on disposal of assets, the difference between budget and actual expense for cash-settled stock-based awards, pre-opening expenses, loss on disposal of a business, non-cash gains/losses associated with REIT transactions, and other. Segment Adjusted EBITDAR excludes rent expense associated with triple net operating leases (which is a normal, recurring cash operating expense necessary to operate our business). Segment Adjusted EBITDAR is inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (such as interest expense, net and depreciation and amortization) added back for our Kansas Entertainment, LLC joint venture. Segment Adjusted EBITDAR margin is Segment Adjusted EBITDAR divided by related segment revenues.
Non-GAAP Financial Measure
Use and Definitions
In addition to GAAP financial measures, management uses Consolidated Adjusted EBITDA as a non-GAAP financial measure. This non-GAAP financial measure should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP. This non-GAAP financial measure is not calculated in the same manner by all companies and, accordingly, may not be an appropriate measure of comparing performance among different companies.
We define Consolidated Adjusted EBITDA as earnings before interest expense, net, interest income, income taxes, depreciation and amortization, stock-based compensation, debt extinguishment charges, impairment losses, insurance recoveries, net of deductible charges, changes in the estimated fair value of our contingent purchase price obligations, gain or loss on disposal of assets, the difference between budget and actual expense for cash-settled stock-based awards, pre-opening expenses, loss on disposal of business, non-cash gains/losses associated with REIT transactions, and other. Consolidated Adjusted EBITDA is inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (such as interest expense, net and depreciation and amortization) added back for our Kansas Entertainment, LLC joint venture. Consolidated Adjusted EBITDA is inclusive of rent expense associated with our triple net operating leases with our REIT landlords. Although Consolidated Adjusted EBITDA includes rent expense associated with our triple net operating leases, we believe Consolidated Adjusted EBITDA is useful as a supplemental measure in evaluating the performance of our consolidated results of operations.
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Consolidated Adjusted EBITDA has economic substance because it is used by management as a performance measure to analyze the performance of our business, and is especially relevant in evaluating large, long-lived casino-hotel projects because it provides a perspective on the current effects of operating decisions separated from the substantial non-operational depreciation charges and financing costs of such projects. We present Consolidated Adjusted EBITDA because it is used by some investors and creditors as an indicator of the strength and performance of ongoing business operations, including our ability to service debt, and to fund capital expenditures, acquisitions and operations. These calculations are commonly used as a basis for investors, analysts, and credit rating agencies to evaluate and compare operating performance and value companies within our industry. In order to view the operations of their casinos on a more stand-alone basis, gaming companies, including us, have historically excluded from their Consolidated Adjusted EBITDA calculations certain corporate expenses that do not relate to the management of specific casino properties. However, Consolidated Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with GAAP. Consolidated Adjusted EBITDA information is presented as a supplemental disclosure, as management believes that it is a commonly used measure of performance in the gaming industry and that it is considered by many to be a key indicator of the Company’s operating results.
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measure
The following table includes a reconciliation of net income (loss), which is determined in accordance with GAAP, to Consolidated Adjusted EBITDA, which is a non-GAAP financial measure:
For the three months ended June 30, For the six months ended June 30,
(in millions) 2026 2025 2026 2025
Net income (loss) $ 32.6 $ (18.3) $ 29.8 $ 93.2
Income tax expense 7.1 6.4 15.8 54.1
Interest expense, net 100.9 95.9 201.8 206.7
Interest income (2.0) (2.1) (3.8) (5.3)
Income from unconsolidated affiliates (8.6) (13.3) (16.9) (20.9)
Gain on financing arrangement — — — (215.1)
Loss on early extinguishment of debt 1.8 11.8 1.8 11.8
Other (income) expenses (0.1) (2.9) 0.2 (4.2)
Operating income 131.7 77.5 228.7 120.3
Stock-based compensation (1) 17.4 16.1 31.5 31.7
Cash-settled stock-based award variance (1)(2) (2.6) (3.1) (6.0) (6.3)
Pre-opening expenses (1) 23.0 4.4 27.2 4.9
Depreciation and amortization 117.8 110.5 234.8 218.5
Impairment loss (3) — 15.0 — 15.0
Income from unconsolidated affiliates 8.6 13.3 16.9 20.9
Non-operating items of equity method investments (4) 1.1 1.1 2.3 2.2
Other expenses (1)(5) 15.6 1.3 43.0 2.2
Consolidated Adjusted EBITDA $ 312.6 $ 236.1 $ 578.4 $ 409.4
(1)These items are included in “General and administrative” within the unaudited Consolidated Statements of Operations.
(2)Our cash-settled stock-based awards are adjusted to fair value each reporting period based primarily on the price of the Company’s common stock. As such, significant fluctuations in the price of the Company’s common stock during any reporting period could cause significant variances to budget on cash-settled stock-based awards.
(3)Related to an impairment charge in our Midwest segment.
(4)Consists primarily of depreciation expense associated with our Kansas Entertainment joint venture.
(5)For the three and six months ended June 30, 2026, other expenses primarily consisted of transaction costs and non-recurring restructuring charges, primarily severance, related to the Company’s new corporate organizational structure. For the six months ended June 30, 2026, other expenses also included settlement costs and related legal and advisory fees associated with the Cooperation Agreement with HG Vora Capital Management, LLC and related parties.
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LIQUIDITY AND CAPITAL RESOURCES
Our primary sources of liquidity and capital resources have been and are expected to be cash flow from operations, borrowings from banks, and proceeds from the issuance of debt and equity securities. Our ongoing liquidity will depend on a number of factors, including available cash resources, cash flow from operations, acquisitions or investments, funding of construction for development projects, and our compliance with covenants contained under our debt agreements. We currently believe that our operating cash flow and other sources of liquidity, as described herein, will be sufficient to meet our liquidity needs on a short and long-term basis.
For the six months ended June 30, Change
(dollars in millions) 2026 2025 $ %
Net cash provided by operating activities $ 363.1 $ 220.1 $ 143.0 65.0 %
Net cash provided by (used in) investing activities $ 27.4 $ (272.5) $ 299.9 N/M
Net cash provided by (used in) financing activities $ (186.1) $ 28.3 $ (214.4) N/M
Operating Cash Flow
Trends in our operating cash flows tend to follow trends in operating income, excluding non-cash charges, but can be affected by changes in working capital, the timing of significant interest payments, tax payments or refunds, and distributions from unconsolidated affiliates. Net cash provided by operating activities increased by $143.0 million for the six months ended June 30, 2026, primarily due to increased earnings from our retail and Interactive reportable segments. Additionally, operating cash flows benefited from favorable working capital changes driven by the timing of deposits, as well as the reversal of previously recognized tax liabilities following the favorable resolution of the Indiana tax matter, discussed further within the “Consolidated Comparison of the Three and Six Months Ended June 30, 2026 and 2025” section above.
Investing Cash Flow
Cash provided by investing activities during the six months ended June 30, 2026 was $27.4 million, primarily related to the proceeds of $216.3 million from the sale-and-lease back of real estate assets for the new Aurora facility, offset by capital expenditures of $192.0 million. Cash used in investing activities during the six months ended June 30, 2025 was $272.5 million and primarily related to capital expenditures of $284.6 million.
Capital Expenditures
Capital expenditures are accounted for as either project capital (new facilities or expansions) or maintenance capital (replacement) which is inclusive of projects such as our retail sportsbooks and hotel renovations. Cash provided by operating activities, as well as cash available under our Amended Revolving Credit Facility, was available to fund our capital expenditures for the six months ended June 30, 2026 and 2025, as applicable.
For the year ending December 31, 2026, our anticipated maintenance capital expenditures are approximately $220.0 million, inclusive of capital expenditures required under our Triple Net Leases, which require us to spend a specified percentage of total revenues. Maintenance capital expenditures of $69.1 million were incurred during the six months ended June 30, 2026. Additionally, for the year ending December 31, 2026, we anticipate project capital expenditures of $180.0 million, inclusive of $122.9 million incurred during the six months ended June 30, 2026. Project capital expenditures primarily are in connection with the PENN Development Projects pursuant to our Master Development Agreement with GLPI (as described in Note 6, “Leases” in the notes to the unaudited Consolidated Financial Statements). The Master Development Agreement provided that GLPI would fund up to $225.0 million for the Aurora Project and, upon PENN’s request, up to $350.0 million in aggregate for the Other Development Projects, in accordance with certain terms and conditions set forth in the Master Development Agreement. On August 1, 2025, the Company received the full $130.0 million in committed funding from GLPI for the Joliet Project which opened on August 11, 2025. On November 3, 2025, the Company received the full $150.0 million in committed funding from GLPI for the M Resort Project which opened on December 1, 2025. On June 24, 2026, the company received $216.3 million in funding from GLPI (representing the full $225.0 commitment of GLPI less costs incurred by GLPI with respect to certain land parcels associated with the Aurora Project) which opened on June 24, 2026, as described in Note 6, “Leases” in the notes to the unaudited Consolidated Financial Statements.
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Financing Cash Flow
For the six months ended June 30, 2026, net cash used in financing activities totaled $186.1 million, primarily related to repayments on our credit facilities of $1.4 billion, net payments of $570.0 million on our revolving credit facility, repayment of $106.7 million of our Convertible Notes, principal payments of $50.2 million on our finance leases and financing obligations, $17.1 million in payments on insurance financing, as well as $11.9 million in principal payments on long-term debt, offset by proceeds from issuance of term loans of $1.4 billion and proceeds from issuance of bonds of $600.0 million.
For the six months ended June 30, 2025, net cash provided by financing activities totaled $28.3 million, primarily related to net proceeds from our revolving credit facility of $467.5 million, offset by repurchases of $223.8 million of our Convertible Notes, repurchases of $115.3 million of our common stock, principal payments of $48.2 million on our finance leases and finance obligations, $16.8 million in payments on insurance financing, as well as $18.8 million in principal payments on long-term debt.
Debt Issuance and Other Long-Term Obligations
As of June 30, 2026, we had $2.8 billion in aggregate principal amount of indebtedness, including $1.4 billion outstanding under our Amended Credit Facilities, $400.0 million outstanding under our 5.625% Notes, $400.0 million outstanding under our 4.125% Notes, $600.0 million outstanding under our 6.75% Notes, and $7.8 million outstanding in other long-term obligations. As of June 30, 2026, the Company had conditional obligations under letters of credit issued pursuant to the Amended Credit Facilities with face amounts aggregating to $23.9 million, resulting in $976.1 million of available borrowing capacity under the Amended Revolving Credit Facility.
See definitions for (i) Amended Credit Facilities; (ii) 5.625% Notes; (iii) 4.125% Notes; (iv) 6.75% Notes; and (v) Amended Revolving Credit Facility in Note 5, “Long-Term Debt” in the notes to the unaudited Consolidated Financial Statements.
On March 16, 2026, the Company completed an offering of $600.0 million aggregate principal amount of 6.75% senior unsecured notes that mature on April 1, 2031. The 6.75% Notes were issued at par and interest is payable semi-annually on April 1st and October 1st of each year. The 6.75% Notes are not guaranteed by any of the Company’s subsidiaries except in the event that the Company, in the future, issues certain subsidiary-guaranteed debt securities. Net proceeds of the 6.75% Notes were used to repay borrowings under the Amended Revolving Credit Facility.
On April 16, 2026, PENN entered into a Third Amendment (the “Third Amendment Agreement”) to its Second Amended and Restated Credit Agreement (as defined in Note 5, “Long-Term Debt” in the notes to the unaudited Consolidated Financial Statements). The Third Amendment Agreement, among other things, refinanced and extended the term of the Company’s $1.0 billion Amended Revolving Credit Facility and $446.9 million Amended Term Loan A Facility. The Amended Revolving Credit Facility and Amended Term Loan A Facility, as amended, will mature in April 2031, subject to an earlier springing maturity 91 days prior to the maturity of certain of the Company’s existing debt obligations if such debt remains outstanding and has not been refinanced, unless certain liquidity conditions are satisfied. The interest rate margins applicable to the Amended Revolving Credit Facility and Amended Term Loan A Facility were unchanged by the Third Amendment Agreement, except that the Third Amendment Agreement eliminated the credit spread adjustment applicable to SOFR borrowings under the Amended Revolving Credit Facility and Amended Term Loan A Facility.
On May 28, 2026, PENN entered into a Fourth Amendment (the “Fourth Amendment Agreement”) to its Second Amended and Restated Credit Agreement (as defined in Note 5, “Long-Term Debt” in the notes to the unaudited Consolidated Financial Statements) with its various lenders, which reduced the interest rate margins applicable to the Company’s $962.5 million in existing Amended Term Loan B Facility loans from 2.50% to 2.00% for Term SOFR loans and from 1.50% to 1.00% for base rate loans, and extended the maturity date of such loans to May 2033.
In May 2026, the Company repaid the remaining $106.7 million principal balance of the Convertible Notes. As of June 30, 2026, the Company had no outstanding balance on the Convertible Notes. None of the Convertible Notes were converted into shares of the Company’s common stock while they were outstanding.
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Covenants
Our Amended Credit Facilities, 5.625% Notes, 4.125% Notes, and 6.75% Notes require us, among other obligations, to maintain specified financial ratios and to satisfy certain financial tests. In addition, our Amended Credit Facilities, 5.625% Notes, 4.125% Notes, and 6.75% Notes restrict, among other things, our ability to incur additional indebtedness, incur guarantee obligations, amend debt instruments, pay dividends, create liens on assets, make investments, engage in mergers or consolidations, and otherwise restrict corporate activities. Our debt agreements also contain customary events of default, including cross-default provisions that require us to meet certain requirements under the Master Leases. If we are unable to meet our financial covenants or in the event of a cross-default, it could trigger an acceleration of payment terms.
As of June 30, 2026, the Company was in compliance with all required financial covenants. The Company believes that it will remain in compliance with all of its required financial covenants for at least the next twelve months following the date of filing this Quarterly Report on Form 10-Q with the SEC.
See Note 5, “Long-Term Debt” in the notes to the unaudited Consolidated Financial Statements for additional information of the Company’s debt and other long-term obligations.
Share Repurchase Authorization
On October 30, 2025, the Board of Directors approved a new $750.0 million share repurchase program (the “October 2025 Authorization”), which commenced on January 1, 2026 and expires on December 31, 2028.
Repurchases by the Company are subject to available liquidity, general market and economic conditions, alternate uses for capital, and other factors. Share repurchases may be made from time to time through a Rule 10b5-1 trading plan, open market transactions, block trades or in private transactions in accordance with applicable securities laws and regulations and other legal requirements. There is no minimum number of shares that the Company is required to repurchase and the repurchase authorization may be suspended or discontinued at any time without prior notice.
No shares of the Company’s common stock were repurchased during the three and six months ended June 30, 2026.
The cost of all repurchased shares is recorded as “Treasury stock” within the unaudited Consolidated Balance Sheets.
Other Factors Affecting Liquidity
Triple Net Leases
The majority of the real estate assets (i.e., land and buildings) used in our operations are subject to triple net master leases; the most significant of which are the AR PENN Master Lease, 2023 Master Lease, and Pinnacle Master Lease (as such terms are defined in Note 6, “Leases” in the notes to our unaudited Consolidated Financial Statements, and collectively referred to as the “Master Leases”) with GLPI. We refer to the Master Leases, VICI Master Lease, Margaritaville Lease (prior to December 4, 2025), Greektown Lease (prior to December 4, 2025), and Morgantown Lease, collectively, as our “Triple Net Leases.” The Company’s Triple Net Leases are accounted for as either operating leases, finance leases, or financing obligations.
Under our Triple Net Leases, in addition to lease payments for the real estate assets, we are required to pay the following, among other things: (i) all facility maintenance; (ii) all insurance required in connection with the leased properties and the business conducted on the leased properties; (iii) taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor); (iv) all tenant capital improvements; and (v) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties. Additionally, our Triple Net Leases are subject to annual escalators and periodic percentage rent resets, as applicable. See Note 6, “Leases” in the notes to the unaudited Consolidated Financial Statements for further discussion and disclosure related to the Company’s leases.
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Payments to our REIT Landlords under Triple Net Leases
Total payments made to our REIT Landlords, GLPI and VICI, were as follows:
For the three months ended June 30, For the six months ended June 30,
(in millions) 2026 2025 2026 2025
AR PENN Master Lease $ 73.1 $ 72.0 $ 146.2 $ 144.1
2023 Master Lease 66.1 59.8 132.3 119.6
Pinnacle Master Lease 86.9 87.4 174.3 174.8
VICI Master Lease (1) 20.2 — 40.4 —
Margaritaville Lease (1) — 6.7 — 13.4
Greektown Lease (1) — 13.3 — 26.5
Morgantown Lease 0.8 0.8 1.6 1.6
Total $ 247.1 $ 240.0 $ 494.8 $ 480.0
(1)As discussed in Note 6, “Leases,” prior to December 4, 2025, lease payments made to VICI related to the Margaritaville and Greektown individual triple net leases; effective December 4, 2025, lease payments made to VICI relate to the VICI Master Lease.
Outlook
Based on our current level of operations, we believe that cash generated from operations and cash on hand, together with amounts available under our Amended Credit Facilities, will be adequate to meet our anticipated obligations under our Triple Net Leases, debt service requirements, capital expenditures and working capital needs for the foreseeable future. However, our ability to generate sufficient cash flow from operations will depend on a range of economic, competitive and business factors, many of which are outside our control. We cannot be certain: (i) of the impact of price inflation, changes in interest rates on the U.S. economy, economic uncertainty, and geopolitical uncertainty; (ii) that our anticipated earnings projections will be realized; (iii) that we will realize the anticipated benefits of our realigned digital strategy; and (iv) that future borrowings will be available under our Amended Credit Facilities or otherwise will be available in the credit markets to enable us to service our indebtedness or to make anticipated capital expenditures. We caution that the performance and trends seen across our portfolio may not continue. In addition, while we anticipate that a significant amount of our future growth would come through the pursuit of opportunities within other distribution channels, such as media, retail, and online gaming; from acquisitions of gaming properties at reasonable valuations; Greenfield projects; development projects; and jurisdictional expansions and property expansion in under-penetrated markets; there can be no assurance that this will be the case. If we consummate significant acquisitions in the future or undertake any significant property expansions, our cash requirements may increase significantly, and we may need to make additional borrowings or complete equity or debt financings to meet these requirements. See Part I, Item 1A. “Risk Factors” of the Company’s Form 10-K for the year ended December 31, 2025 for a discussion of additional risks, including risks related to the Company’s capital structure.
We have historically maintained a capital structure comprised of a mix of equity and debt financing. We vary our leverage to pursue opportunities in the marketplace in an effort to maximize our enterprise value for our shareholders. We expect to meet our debt obligations as they come due through internally-generated funds from operations and/or refinancing them through the debt or equity markets prior to their maturity.
CRITICAL ACCOUNTING ESTIMATES
A complete discussion of our critical accounting estimates is included in our Form 10-K for the year ended December 31, 2025. There have been no significant changes in our critical accounting estimates during the six months ended June 30, 2026.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
For information with respect to new accounting pronouncements and the impact of these pronouncements on the unaudited Consolidated Financial Statements, see Note 3, “New Accounting Pronouncements” in the notes to the unaudited Consolidated Financial Statements.
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IMPORTANT FACTORS REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology such as “expects,” “believes,” “estimates,” “projects,” “intends,” “plans,” “goal,” “seeks,” “may,” “will,” “should,” “look forward to,” or “anticipates” or the negative or other variations of these or similar words, or by discussions of future events, strategies or risks and uncertainties. Specifically, forward-looking statements include, but are not limited to, statements regarding: the Company’s expectations of future results of operations and financial condition, including, but not limited to, projections of revenue, Segment Adjusted EBITDAR, Consolidated Adjusted EBITDA, and other financial measures; the assumptions provided regarding the guidance, including the anticipated benefits and timing of the Company’s development projects, other expected internal drivers and external tailwinds; the Company’s expectations regarding cash flow generation and near-term deleveraging; the Company’s expectations regarding results and customer growth and the impact of competition in retail/mobile/online sportsbooks (including prediction markets), iCasino, social gaming, and retail operations; the Company’s development and launch of its Interactive segment’s products in new jurisdictions and enhancements to existing Interactive segment products; the future success of theScore Bet, theScore Casino, Hollywood iCasino and its other digital offerings; the Company’s expectations with respect to share repurchases; the Company’s expectations that its portfolio of assets provides a benefit of geographically-diversified cash flows from operations; management’s plans and strategies for future operations, including statements relating to the Company’s plan to expand gaming operations through the implementation and execution of a disciplined capital expenditure program at our existing properties, the pursuit of strategic acquisitions and investments, and the development of new gaming properties, including the development projects and the anticipated benefits; improvements, expansions, or relocations of our existing properties; entrance into new jurisdictions; expansion of gaming in existing jurisdictions; strategic investments and acquisitions; cross-sell opportunities between our retail gaming, online sports betting, and iCasino businesses; our ability to obtain financing for our development projects on attractive terms; the timing, cost and expected impact of planned capital expenditures on the Company’s results of operations; and the actions of regulatory, legislative, executive, or judicial decisions at the federal, state, provincial, or local level with regard to our business and the impact of any such actions.
Such statements are all subject to risks, uncertainties and changes in circumstances that could significantly affect the Company’s future financial results and business. Accordingly, the Company cautions that the forward-looking statements contained herein are qualified by important factors that could cause actual results to differ materially from those reflected by such statements. Such factors include: the effects of economic and market conditions in the markets in which the Company operates or otherwise, including the impact of global supply chain disruptions, price inflation, changes in interest rates, economic downturns, changes in trade policies, and geopolitical and regulatory uncertainty; competition with other retail and online gaming and sports betting, entertainment and sports content experiences; the timing, cost and expected impact of product and technology investments; risks relating to operations, permits, licenses, financings, approvals and other contingencies in connection with growth in new or existing jurisdictions; our ability to successfully acquire and integrate new properties and operations and achieve expected synergies from acquisitions; the availability of future borrowings under our Amended Credit Facilities or other sources of capital to enable us to service our indebtedness, make anticipated capital expenditures or pay off or refinance our indebtedness prior to maturity; the impact of indemnification obligations under the Barstool SPA; our ability to realize the anticipated benefits of our realigned digital strategy; our ability to attract and retain user adoption of theScore Bet, theScore Casino, and Hollywood iCasino apps in a rapidly evolving and highly competitive market; the outcome of any legal proceedings that may be instituted against the Company, or its respective directors, officers or employees; the ability of the Company to retain and hire key personnel; the impact of new or changes in current laws, regulations, rules or other industry standards; adverse outcomes of litigation involving the Company; our ability to maintain our gaming licenses and concessions and comply with applicable gaming law, changes in current laws, regulations, rules or other industry standards, and additional factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the U.S. Securities and Exchange Commission. The Company does not intend to update publicly any forward-looking statements except as required by law. Considering these risks, uncertainties and assumptions, the forward-looking events discussed in this Quarterly Report on Form 10-Q may not occur.
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