PENN Entertainment, Inc.

Greetings and welcome to the Penn Entertainment's third quarter 2024 earnings call. I would like to turn the conference over to Mr. Joe Giaffone, Investor Relations. Please go ahead.

Thank you, Cindy. Good morning and thanks everyone for joining Penn Entertainment's 2024 third quarter conference call. We'll get to management's presentation and comments momentarily as well as your questions and answers. During the Q&A session, we ask that everyone please limit themselves to one question and one follow-up. I'll now read the safe harbor disclosure, and then we'll get into the call. Please note that today's discussion contains forward-looking statements. Forward-looking statements involve risks, assumptions, and uncertainties that could cause actual results to differ materially. For more information, please see our press release for details on specific risk factors. With that, it's now my pleasure to turn the call over to the company's CEO, Jay Snowden. Jay, please go ahead.

Thanks, Joe. Good morning, everyone. I'm happy to be here and while missing with our CFO, Felicia Hendricks, head of operations, Todd George, and our CTO, Aaron LaBerge, as well as other members of our senior management team. It was great to see many of you at our investor event on October 7th at the M Resort in Las Vegas. Some of you may have missed it. We highlighted some of the significant product enhancements we recently implemented for ESPN Bet, as well as some early KPIs related to those feature upgrades. We also provided a hands-on demonstration of our industry-leading 3Cs technology, and attendees got to see some of our new property automations in action, along with several key three business updates that we will review or highlight again with all of you here today. Turning to the results of the third quarter, Strong year-over-year market share growth in Ohio, Massachusetts, and Kansas helped offset unfavorable hold in our northeast segment and volume declines in our south segment, largely as a result of severe weather disruptions and our accelerated hotel remodeling at the Burge Casino in Lake Charles. We are roughly halfway through the planned room renovations there, which have been driving higher gaming spend per customer. We look forward to completing this project by the end of January 2025. Meanwhile, we are continuing to mitigate pressure from no new supply in Nebraska, Louisiana, and Chicagoland through our ongoing efforts to reimagine our properties to improve the customer experience and drive loyalty. Overall, we are seeing stable consumer demand and are performing well in those markets not impacted by new competition, profitably gaining market share in several of them thanks to our best-in-class operators across the country. We saw sequential month-over-month improvement throughout the third quarter and continuing into the month of October. The first several days of November showed improved volumes as well with a strong first weekend. Finally, as noted on slide four, we have seen 3.6% year-over-year slot volume growth through the first five full weeks in Q4 compared to flat year-over-year slot volumes in the third quarter led by our properties in Michigan, Ohio, and St. Louis. The trends we are seeing around the country provide us with continued optimism about our four new growth projects, which are highlighted on slide five. These projects remain on budget and on schedule with Hollywood Joliet expected to open ahead of schedule during the second half of 2025. Turning to slide six, we unveiled seven new ESPN BET branded retail sports books during the quarter as we continue to implement our rebranding strategy across our portfolio. On the interactive side, as I referenced earlier, prior to the start of football season, we released several product enhancements and ESPN integrations to our ESPN BET offering. These product improvements helped contribute to a higher parlay mix and higher structural hold during the quarter. Slide seven highlights the meaningful growth ESPN BET has generated for both our digital database and active user base, providing a strong foundation for future growth as we introduce additional product improvements. We are now approaching 4 million members in our digital database, and we saw a 127% year-over-year growth in monthly active users in Q3 24 versus Q3 23. As noted on slide 9, our interactive segment saw year-over-year OSB NGR growth of more than 200% in Q3, driven by a combination of higher parlay mix from our improving products and lower promotional expenses. While we saw an increase in promotional spend at the beginning of football season from the competition, we have remained disciplined as we primarily focus on reactivation and retention efforts given our deep digital database. As noted on slide 11, we have seen momentum from September into October, and we are seeing encouraging trends in volumes and handle per user. The September launch of ESPN Bet in New York expanded our online betting footprint to 19 U.S. states. representing approximately 46% of the U.S. population. Average daily handle per user in New York is 228% higher than the average in our existing states, and our average deposits there are over 87% larger. And with over 10 million average monthly visitors on ESPN, New York provides a significantly greater scale as we leverage ESPN's vast media reach and integrations for efficient customer acquisition. Turning to slide 13, as of October 30th, account linking between ESPN Bet and ESPN is now available for customers. By linking accounts, fans now have the ability to seamlessly track upcoming live and settled bets within the ESPN app and on ESPN.com. Bringing this new feature to market is an important step towards creating an industry-leading personalized sports betting experience across the ESPN ecosystem. This will help to further drive monetization through enhanced engagement, retention, and reactivation. This was a tremendous achievement for the talented Penn and ESPN technology teams and really speaks to the depth of our partnership with ESPN. We have some exciting additional product enhancements coming soon as we accelerate our product roadmap. These include an improved same-game parlay experience, enhanced branding and IP, and upgraded in-play betting. Finally, on the iCasino side, as you'll see on slide 15, Hollywood Casino experienced solid growth in the quarter as well. That momentum has continued into October and will be helped by our recently introduced PennPlay promo credit redemption offering. We're excited for the launch of our Hollywood Casino app in Pennsylvania in early Q1, subject to final regulatory approvals, of course, with additional jurisdictions to follow. I'll now turn it over to Felicia for additional financial details for the quarter.