Penn Entertainment “grows ever closer to introducing ESPN Bet enhancements to the market as [management] makes strides toward realizing the full vision for what the ESPN partnership could bring.” So wrote Truist Securities analyst Barry Jonas after meeting with top Penn executives.

Attending the New York City meeting were CEO Jay Snowden, CFO Felicia Hendrix, Treasurer Mike Nieves, and newly arrived Chief Technology Officer Aaron LaBerge. Despite his enthusiasm for Penn, Jonas kept his price target at $25 per share, with a Buy rating.

Jonas hailed “real unrecognized value” at Penn, along with “largely steady” brick-and-mortar trends and projects debuting in early 2026. These include new casinos in Aurora and Joliet, Illinois.

The analyst came away from the meeting particularly impressed with LaBerge, a quarter-century veteran of Disney, corporate parent of ESPN. “Though he hasn’t worked in the gaming space before, we believe the benefits of his prior experience far outweigh any OSB-specific intricacies (which can be learned), especially with strong support at PENN,” opined Jonas.

At Disney, LaBerge oversaw all non-theme-park consumer-brand technology, including online applications for both ESPN and ESPN Fantasy. LaBerge told Jonas that the Penn/ESPN Bet partnership remains a critical priority, which includes transforming it into a lifestyle brand and “America’s Sports Book,” not a “logo slap.”

In terms of trying to bridge the chasm between ESPN Bet and its main rivals, DraftKings and FanDuel, LaBerge was drawing on his experience chasing Netflix at Disney. The former, Jonas wrote, “had a 10-year and many-million-subscribers head start, though DIS was able to compete in time as its product became increasingly sophisticated.”

As the functionality of the ESPN Bet product improves, LaBerge opined, the online sports betting (OSB) market would be differentiated on the basis of personalization, merchandising, and content. Penn, furthermore, expected to grow market share over the course of the 2024-25 National Football League season, cautioning that growth will “likely be more gradual, rather than a hockey stick.”

An OSB launch in New York is imminent, pending regulatory assent, and Penn hopes it will be in time for NFL season. However, Jonas didn’t anticipate major ESPN Bet investments in the Empire State.

“ESPN Bet looks to cater to the masses and [management] is taking player education seriously,” Jonas wrote. To that end, it’s stressing simplicity of functionality, catering to new sports bettors. Wagering on ESPN Bet by women also remains above average.

Snowden’s team “was also clear to highlight the importance of capturing VIP play and it doesn’t see having both VIP and casual players as mutually exclusive,” Jonas reported.

Elsewhere in online gambling, Penn was looking toward an early 2025 debut of its Hollywood-branded igaming platform, which it expected would improve selling of OSB to icasino bettors. “Market share has been challenged by inconsistent branding and the difficulty of having a casino player enter through the OSB product,” Jonas observed.

He noted that Penn found online players five to seven times more valuable than terrestrial ones. Management, he said, “is laser-focused on execution here.”

Nor were land-based casinos neglected. Penn management reported them to be stable despite weakness in other sectors of the U.S. economy.

Early returns for July were described as “soft,” down two percent. “Management noted regional gaming’s low-end consumer has been under some form of modest pressure for a few years now and other parts of the consumer seem to be catching up,” Jonas noted, adding that reduced travel expenditures might find their way into the coffers of regional casinos like Penn’s.

Indeed, Penn bosses were “excited” about the growth prospects hinted at by casino openings like Boyd Gaming’s Treasure Chest in Louisiana, which doubled its revenue out of the gate. Penn projects in Aurora, Joliet, Las Vegas (M Resort expansion), and Columbus, Ohio (a new hotel), are both on schedule and on budget.

As for mergers or acquisitions, they were described as off the table while ESPN Bet is being optimized. Given that priority, Penn “could re-evaluate its needs when it has more confidence in its offering.”

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