Regional strengthening predicted for Penn, according to Jefferies analyst
Penn Entertainment's Regional Casinos Thrive Amidst Growing Gaming Market
Penn Entertainment's regional casinos are experiencing growth in a generally expanding commercial gaming market. The company's focus on investing in modernized properties, such as the Hollywood Casino Joliet, is paying off, as it aims to enhance their competitive position and overall performance.
The Hollywood Casino Joliet is undergoing a significant transformation, closing its riverboat operations in late July 2025 and reopening as a land-based, $185 million modernized facility on August 11, 2025. The new venue will feature expanded gaming options, including 1,000 slot machines, 43 live table games, an ESPN BET sportsbook, and upgraded dining experiences.
Penn's regional market exposure remains strong, with approximately 85% of its 2024 sales generated outside of Las Vegas. This aligns well with the broader US regional gaming growth trends, where non-Vegas markets have shown robust expansion.
Commercial gaming revenue has risen 7.1% year-over-year to $31.89 billion through May 2025, driven by slot machine and table game revenue increases in expanding markets like Illinois (up 22.7%)—home to Penn’s Joliet casino—and Virginia (up 36.1%).
While some traditional gaming hubs like Nevada reported slight declines in revenue, states with Penn Entertainment operations such as Illinois have shown strong growth, suggesting Penn’s regional casinos benefit from these favorable market dynamics. Commercial sportsbook revenue, a segment where Penn has a presence (15% of its 2024 sales), increased by 24.3% in May 2025, indicating an important growth area complementing traditional revenue streams.
Jefferies Equity Research analyst David Katz maintains a "Hold" rating on Penn Entertainment stock and has a price target of $20 per share. Katz expects modest growth in land-based operations and a reversal of losses in digital for Penn.
However, Katz notes that Penn may not be increasing promotions to drive growth, as discussed by peers. He also has questions for Penn leadership regarding the sustainability of regional-gambling trends, Penn's perspective on recent increases in sports-betting taxes, continuation of stock repurchases, and a path to lowering the company's debt load.
As of trading, Penn Entertainment stock is at $17. The growth in regional gross gaming revenue appears to have benefited Penn less than its peers, with the company only seeing a 1.6% increase compared to the industry average of 3.2%.
Katz is optimistic about the ESPN Bet product, which is integrated with ESPN's fantasy-sports application and direct-to-customer products. He believes it is in its best position before the start of the NFL season. However, the Street requires evidence of market share gains to ascribe value for the business.
In terms of specific casinos, Plainridge Park's revenue rose 9.2% in April, 15.6% in May, and 5.9% in June. River City's revenue was up 6.2% in April, 12% in May, and 2.5% in June. Unfortunately, Hollywood Greektown in Detroit and Margaritaville casino in Bossier City, Louisiana, have seen decreases in revenue.
Katz did not report any new revenue figures for these specific casinos or any new highlights about revenue boosts at other Penn Entertainment casinos. He also did not report any new information about Penn Entertainment stock price, price target, trading status, or industry average growth.
- Penn Entertainment's strategic investments in modernizing its properties, such as the Hollywood Casino Joliet, are aimed at Financial growth by expanding their Business operations and enhancing their competitive position in the industry.
- The commercial gaming revenue, which includes segments like sportsbook where Penn Entertainment has a presence, has shown robust growth across the United States, with states like Illinois, home to Penn’s Joliet casino, experiencing significant growth.
