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What changed in PENN Entertainment, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of PENN Entertainment, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+499 added−537 removedSource: 10-K (2024-02-22) vs 10-K (2023-02-23)

Top changes in PENN Entertainment, Inc.'s 2023 10-K

499 paragraphs added · 537 removed · 342 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

72 edited+28 added−28 removed23 unchanged
Biggest changeSome of the key programs and initiatives developed to attract, develop, engage and retain diverse and high-quality talent include: • Executive and High Potential Talent Review Process, expanded to include all salaried team members • Learning Central, a catalogue of self-paced development opportunities covering a wide range of topics • Diversity and Veteran Recruitment Initiatives • AwardCo Recognition Program and Property Engagement Committees • Emerging Leaders Program Through the dedicated efforts of our Corporate and property leadership teams, our charitable Foundation and the PENN Diversity Committee, we launched or expanded a number of major new initiatives in 2022 that will help to improve the lives of our team members, their families and those in need in our communities.
Biggest changeSome of the key programs and initiatives developed to attract, develop, engage, and retain diverse and high-quality talent include: • Executive and High Potential Talent Review Process to include team members who completed an internal development program • LEAP Program (Leadership Excellence at PENN, intern program) • Emerging Leader Program • Early Career Leadership Academy (0 to 2 years experience leading others) and Mid-Career Leadership Academy (over 3 years experience leading others) • Cohort Programs (Gaming, Hospitality, Human Resources) • PENN Women • Learning Central, a catalog of self-paced development opportunities covering a wide range of topics • Diversity and Veteran Recruitment Initiatives • AwardCo Recognition Program and Property Engagement Committees Through the dedicated efforts of our corporate, interactive, and property leadership teams, our charitable Foundation and the PENN Diversity Council, we launched or expanded a number of initiatives in 2023 focused on improving the lives of our team members, their families, and those in need in our communities.
The property features a 12-story hotel, slots, table games, poker, a Barstool Sportsbook for live sports betting, a variety of dining choices, and 13,000 square feet of meeting and event space. L’Auberge Lake Charles offers one of the closest full-scale casino hotel facilities to Houston, Texas, as well as to the Austin, Texas and San Antonio, Texas metropolitan areas.
The property features a 12-story hotel, slots, table games, poker, a sportsbook for live sports betting, a variety of dining choices, and 13,000 square feet of meeting and event space. L’Auberge Lake Charles offers one of the closest full-scale casino hotel facilities to Houston, Texas, as well as to the Austin, Texas and San Antonio, Texas metropolitan areas.
The location is approximately 140 miles from Houston and approximately 300 miles and 335 miles from Austin and San Antonio, respectively. In addition to gaming amenities and a Barstool Sportsbook for live sports betting, the property features several dining outlets, a golf course, a full-service spa, and more than 26,000 square feet of meeting and event space.
The location is approximately 140 miles from Houston and approximately 300 miles and 335 miles from Austin and San Antonio, respectively. In addition to gaming amenities and a sportsbook for live sports betting, the property features several dining outlets, a golf course, a full-service spa, and more than 26,000 square feet of meeting and event space.
Hollywood Casino at Charles Town Races is located within approximately an hour drive of the Baltimore, Maryland and Washington, D.C. markets. In addition to a hotel, slot machines, table games and poker tables, the property includes a Barstool Sportsbook for live sports betting, as well as a variety of dining options.
Hollywood Casino at Charles Town Races is located within approximately an hour drive of the Baltimore, Maryland and Washington, D.C. markets. In addition to a hotel, slot machines, table games, and poker tables, the property includes a sportsbook for live sports betting, as well as a variety of dining options.
The property features a half-mile standardbred racetrack and a 118,000 square foot grandstand. In addition, through our Pennwood joint venture, we own 50% of a leased off-track wagering (“OTW”) facility in Toms River, New Jersey, and operate another OTW facility, which we constructed, in Gloucester Township, New Jersey. Retama Park Racetrack.
The property features a one-half mile standardbred racetrack and a 118,000 square foot grandstand. In addition, through our Pennwood joint venture, we own 50% of a leased off-track wagering (“OTW”) facility in Toms River, New Jersey, and operate another OTW facility, which we constructed, in Gloucester Township, New Jersey. Retama Park Racetrack.
Hollywood Casino York is a casino located within the York Galleria Mall, approximately an hour drive north of Baltimore, Maryland. It features slot machines, table games, and a Barstool Sportsbook for live sports betting, as well as casual dining options. Hollywood Gaming at Dayton Raceway is a Hollywood-themed casino and raceway located in Dayton, Ohio.
Hollywood Casino York is a casino located within the York Galleria Mall, approximately an hour drive north of Baltimore, Maryland. It features slot machines, table games, and a sportsbook for live sports betting, as well as casual dining options. Hollywood Gaming at Dayton Raceway is a Hollywood-themed casino and raceway located in Dayton, Ohio.
In addition to slot machines, table games, poker tables and a Barstool Sportsbook for live sports betting, the property features a 30-story hotel, several food and beverage options from casual to fine dining, as well as 10,000 square feet of convention and banquet space.
In addition to slot machines, table games, poker tables, and a sportsbook for live sports betting, the property features a 30-story hotel, several food and beverage options from casual to fine dining, as well as 10,000 square feet of convention and banquet space.
Hollywood Casino Lawrenceburg is a Hollywood-themed casino riverboat located along the Ohio River in Lawrenceburg, Indiana, approximately 15 miles west of Cincinnati, Ohio. In addition to slot machines, table games, and poker tables, the riverboat features a Barstool Sportsbook for live sports betting, as well as a variety of dining options.
Hollywood Casino Lawrenceburg is a Hollywood-themed casino riverboat located along the Ohio River in Lawrenceburg, Indiana, approximately 15 miles west of Cincinnati, Ohio. In addition to slot machines, table games, and poker tables, the riverboat features a sportsbook for live sports betting, as well as a variety of dining options.
Hollywood Casino at Kansas Speedway , our 50% joint venture with NASCAR, is located in Kansas City, Kansas. It features slot machines, table games, poker tables and a Barstool Sportsbook for live sports betting, and offers a variety of dining and entertainment facilities and a meeting room. Hollywood Casino St.
Hollywood Casino at Kansas Speedway , our 50% joint venture with NASCAR, is located in Kansas City, Kansas. It features slot machines, table games, poker tables, and a sportsbook for live sports betting, and offers a variety of dining and entertainment facilities and a meeting room. Hollywood Casino St.
The property features an outdoor gaming and entertainment area, a Barstool Sportsbook for live sports betting, slot machines, table games, and multiple food and beverage outlets. Hollywood Casino at PENN National Race Course is located 15 miles northeast of Harrisburg, Pennsylvania.
The property features an outdoor gaming and entertainment area, a sportsbook for live sports betting, slot machines, table games, and multiple food and beverage outlets. Hollywood Casino at PENN National Race Course is located 15 miles northeast of Harrisburg, Pennsylvania.
Hollywood Casino Perryville is a Hollywood-themed casino located near the Susquehanna River in Perryville, Maryland, approximately 45 miles east of Baltimore, Maryland. It features slot machines, table games and poker tables, and a Barstool Sportsbook for live sports betting, as well as a variety of dining options.
Hollywood Casino Perryville is a Hollywood-themed casino located near the Susquehanna River in Perryville, Maryland, approximately 45 miles east of Baltimore, Maryland. It features slot machines, table games, poker tables, and a sportsbook for live sports betting, as well as a variety of dining options.
West Segment Ameristar Black Hawk is located in the center of the Black Hawk gaming district, approximately 40 miles west of Denver, Colorado. The resort features slot machines, table games and a Barstool Sportsbook for live sports betting.
West Segment Ameristar Black Hawk is located in the center of the Black Hawk gaming district, approximately 40 miles west of Denver, Colorado. The resort features slot machines, table games, and a sportsbook for live sports betting.
(2) Property offers a sportsbook for live sports betting. (3) Property transferred to 2023 Master Lease (as defined in Note 12, “ Leases ” , in the notes to our Consolidated Financial Statements), effective January 1, 2023. (4) Includes 168 rooms at our hotel and event center located less than a mile from the gaming facility.
(2) Property offers a sportsbook for live sports betting. (3) Property transferred to 2023 Master Lease (as defined in Note 12, “Leases,” in the notes to our Consolidated Financial Statements), effective January 1, 2023. (4) Includes 168 rooms at our hotel and event center located less than a mile from the gaming facility.
Prairie State Gaming is our licensed VGT route operator in Illinois across a network of over 420 bar and/or retail gaming establishments in seven distinct geographic areas throughout Illinois. River City Casino is located in the St. Louis, Missouri metropolitan area, just south of the confluence of the Mississippi River and the River des Peres in the south St.
Prairie State Gaming is our licensed VGT route operator in Illinois across a network of over 423 bar and/or retail gaming establishments in seven distinct geographic areas throughout Illinois. River City Casino is located in the St. Louis, Missouri metropolitan area, just south of the confluence of the Mississippi River and the River des Peres in the south St.
Under triple net leases, in addition to lease payments for the real estate assets, the Company is 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 6 Table of Contents improvements; and (v) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.
Under triple net leases, in addition to lease payments for the real estate assets, the Company is 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.
In addition to gaming amenities, the resort features a hotel, a full-service day spa, several dining outlets, a live entertainment bar, and 15,000 square feet of meeting and event space. Cactus Petes and Horseshu (collectively, “the Jackpot Properties”) are located just south of the Idaho border in Jackpot, Nevada.
In addition to gaming 4 Table of Contents amenities, the resort features a hotel, a full-service day spa, several dining outlets, a live entertainment bar, and 15,000 square feet of meeting and event space. Cactus Petes and Horseshu (collectively, “the Jackpot Properties”) are located just south of the Idaho border in Jackpot, Nevada.
The PENN Master Lease has an initial term of 15 years with four subsequent, five-year renewal periods on the same terms and conditions, exercisable at the Company’s option.
The PENN Master Lease had an initial term of 15 years with four subsequent five-year renewal periods on the same terms and conditions, exercisable at the Company’s option.
The Jackpot Properties collectively feature two hotels, several dining options, a 4,000 seat amphitheater, a showroom, a live entertainment lounge, a sportsbook for live sportsbetting, and meeting and event facilities. 4 Table of Contents M Resort Spa Casino , located approximately ten miles from the Las Vegas strip in Henderson, Nevada, is situated at the southeast corner of Las Vegas Boulevard and St.
The Jackpot Properties collectively feature two hotels, several dining options, a 4,000 seat amphitheater, a showroom, a live entertainment lounge, a sportsbook for live sports betting, and meeting and event facilities. M Resort Spa Casino , located approximately ten miles from the Las Vegas strip in Henderson, Nevada, is situated at the southeast corner of Las Vegas Boulevard and St.
Hollywood Casino at The Meadows is located in Washington, Pennsylvania, approximately 25 miles south of Pittsburgh, Pennsylvania. In addition to gaming amenities, the property offers a Barstool Sportsbook for live sports betting, several dining options, as well as an event and banquet center, a simulcast betting parlor, a 5/8th mile harness racetrack and a bowling alley.
Hollywood Casino at The Meadows is located in Washington, Pennsylvania, approximately 25 miles south of Pittsburgh, Pennsylvania. In addition to gaming amenities, the property offers a sportsbook for live sports betting, several dining options, as well as an event and banquet center, a simulcast betting parlor, a five-eighths mile harness racetrack and a bowling alley.
(5) Upon termination of the Morgantown Lease, ownership of the constructed building and all tenant improvements will transfer from the Company to GLPI. (6) VGT route operations. (7) Includes 284 rooms operated by a third-party and located on land leased by us and subleased to such third-party.
(5) Upon termination of the Morgantown Lease, ownership of the constructed building and all tenant improvements will transfer from the Company to Gaming & Leisure Properties, Inc. (6) VGT route operations. (7) Includes 284 rooms operated by a third-party and located on land leased by us and subleased to such third-party.
Hollywood Casino Toledo is a Hollywood-themed casino, located on the bank of the Maumee River in Toledo, Ohio. The property features slot machines, table games and poker tables, as well as multiple food and beverage outlets and an entertainment lounge. On January 1, 2023, Hollywood Casino Toledo opened a Barstool Sportsbook for live sports betting.
Hollywood Casino Toledo is a Hollywood-themed casino, located on the bank of the Maumee River in Toledo, Ohio. The property features slot machines, table games, poker tables, and a sportsbook for live sports betting, as well as multiple food and beverage outlets and an entertainment lounge.
Risk Factors,” of this Annual Report on Form 10-K and a discussion of the impact of competition on our results of operations, and cash flows is included within “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of this Annual Report on Form 10-K.
Risk Factors” of this Annual Report on Form 10-K and a discussion of the impact of competition on our results of operations, and cash flows is included within “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K.
In addition to gaming amenities, the property features a full-service hotel, a Barstool Sportsbook for live sports betting, a fitness center, dining venues, and a lounge. 2 Table of Contents Hollywood Casino Bangor is located less than five miles from the Bangor airport in Maine.
In addition to gaming amenities, the property features a full-service hotel, a sportsbook for live sports betting, a fitness center, dining venues, and a lounge. Hollywood Casino Bangor is located less than five miles from the Bangor airport in Maine.
This gaming facility also includes a variety of dining and entertainment options, as well as a Barstool Sportsbook for live sports betting and a viewing area for live racing. The property includes a one-mile all-weather lighted thoroughbred racetrack and a 7/8-mile turf track.
This gaming facility also includes a variety of dining and entertainment options, as well as a sportsbook for live sports betting and a viewing area for live racing. The property includes a one-mile all-weather lighted thoroughbred racetrack and a seven-eighths mile turf track.
The complex also features live thoroughbred racing at a 3/4-mile all-weather lighted thoroughbred racetrack with a 3,000-seat grandstand and simulcast wagering. Hollywood Casino Columbus is a Hollywood-themed casino located in Columbus, Ohio. It features slot machines, table games and poker tables as well as multiple food and beverage outlets, and an entertainment lounge.
The complex also features live thoroughbred racing at a three-quarters mile all-weather lighted thoroughbred racetrack with a 3,000-seat grandstand and simulcast wagering. Hollywood Casino Columbus is a Hollywood-themed casino located in Columbus, Ohio. It features slot machines, table games, poker tables, and a sportsbook for live sports betting, as well as multiple food and beverage outlets, and an entertainment lounge.
PENN’s highly differentiated strategy, which is focused on organic cross-sell opportunities, is reinforced by its investments in market-leading retail casinos, sports media assets, technology, including a state-of-the-art, fully integrated digital sports and iCasino betting platform, and an in-house iCasino content studio.
This highly differentiated strategy, which is focused on organic cross-sell opportunities, is reinforced by our market-leading retail casinos, sports media assets, and technology, including a proprietary state-of-the-art, fully integrated digital sports and iCasino betting platform and an in-house iCasino content studio.
The following summaries of the Master Leases are qualified in their entirety by reference to either the PENN Master Lease or the Pinnacle Master Lease, as applicable, all of which are incorporated by reference in the exhibits to this Annual Report on Form 10-K.
The following summaries of the Master Leases are qualified in their entirety by reference to either the AR PENN Master Lease, the 2023 Master Lease, PENN Master Lease (prior to January 1, 2023), or the Pinnacle Master Lease, as applicable, all of which are incorporated by reference in the exhibits to this Annual Report on Form 10-K.
Our retail gaming and racing properties are grouped into reportable segments by geographic region 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 also consider our combined Video Gaming Terminal (“VGT”) operations, by state, to be separate operating segments.
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.
If we are able to extend or enter into replacement agreements, there can be no assurance as to whether the terms will be on comparable terms to the existing agreements. 9 Table of Contents
If we are able to extend or enter into replacement agreements, there can be no assurance as to whether the terms will be on comparable terms to the existing agreements.
(8) The riverboat is owned by us and not subject to the PENN Master Lease. (9) Pursuant to a joint venture with NASCAR. (10) Pursuant to a joint venture with Greenwood Limited Jersey, Inc., a subsidiary of Greenwood Racing, Inc. (11) Pursuant to a management contract with Retama Development Corporation.
(8) The riverboat is owned by us and not subject to the AR PENN Master Lease. (9) Pursuant to a joint venture with NASCAR Holdings LLC. (10) Pursuant to a joint venture with Greenwood Limited Jersey, Inc., a subsidiary of Greenwood Racing, Inc. (11) Pursuant to a management contract with Retama Development Corporation. (12) Simulcast racing operations.
Upon assumption of the Pinnacle Master Lease, as amended, there were 7.5 years remaining of the initial ten-year term, with five subsequent, five-year renewal periods exercisable at the Company’s option.
Upon assumption of the Pinnacle Master Lease, as amended, there were 7.5 years remaining of the initial ten-year term, with five subsequent, five-year renewal periods, on the same terms and conditions, exercisable at the Company’s option.
Under this strategic relationship, Barstool exclusively promotes the Company’s iCasinos and sports betting products, including the Barstool Sportsbook and Casino mobile app, as well as our retail gaming and racing properties to its national audience, and granted us the sole right to utilize the Barstool brand for all of our online and retail sports betting and iCasino products.
Under this strategic relationship, Barstool exclusively promoted the Company’s sports betting and iCasino products, including the Barstool Sportsbook website and mobile application, as well as our retail gaming and racing properties to its national audience, and granted us the sole right to utilize the Barstool brand for all of our online and retail sports betting and iCasino products.
As of December 31, 2022, PENN operated 43 properties in 20 states, online sports betting in 15 jurisdictions and iCasino in five jurisdictions, under a portfolio of well-recognized brands including Hollywood Casino ® , L’Auberge ® , Barstool Sportsbook ® , and theScore Bet Sportsbook and Casino ® .
As of December 31, 2023, PENN operated 43 properties in 20 states, online sports betting in 18 jurisdictions and iCasino in five jurisdictions, under a portfolio of well-recognized brands including Hollywood Casino ® , L’Auberge ® , ESPN BET™, and theScore Bet Sportsbook and Casino ® .
ITEM 1. BUSINESS Overview On August 4, 2022, Penn National Gaming, Inc. was renamed PENN Entertainment, Inc. PENN Entertainment, Inc., together with its subsidiaries (“PENN,” the “Company,” “we,” “our,” or “us”), is North America’s leading provider of integrated entertainment, sports content, and casino gaming experiences.
ITEM 1. BUSINESS Overview PENN Entertainment, Inc., together with its subsidiaries (“PENN,” the “Company,” “we,” “our,” or “us”), is North America’s leading provider of integrated entertainment, sports content, and casino gaming experiences.
Louis Maryland Heights, MO PENN Master Lease Dockside gaming 120,000 1,646 48 502 Prairie State Gaming (6) Illinois N/A Land-based gaming N/A 2,346 — — River City Casino St.
Louis Maryland Heights, MO AR PENN Master Lease Dockside gaming 120,000 1,546 45 502 Prairie State Gaming (6) Illinois N/A Land-based gaming N/A 2,338 — — River City Casino St.
Louis, MO Pinnacle Master Lease Dockside gaming 90,000 1,741 39 200 Other Freehold Raceway (10) Freehold, NJ Owned - joint venture Standardbred racing — — — — Retama Park Racetrack (11) Selma, TX None - Managed Thoroughbred racing — — — — Sam Houston Race Park Houston, TX Owned Thoroughbred racing — — — — Sanford-Orlando Kennel Club (12) Longwood, FL Owned Simulcasting/restaurant — — — — Valley Race Park (13) Harlingen, TX Owned Greyhound racing — — — — 2,540,450 43,966 1,190 7,321 (1) Excludes poker tables.
Louis, MO Pinnacle Master Lease Dockside gaming 90,000 1,620 44 200 Other Freehold Raceway (10) Freehold, NJ Owned - joint venture Standardbred racing — — — — Retama Park Racetrack (11) Selma, TX None - Managed Thoroughbred racing — — — — Sam Houston Race Park Houston, TX Owned Thoroughbred racing — — — — Sanford-Orlando Kennel Club (12) Longwood, FL Owned Simulcasting/restaurant — — — — Valley Race Park (13) Harlingen, TX Owned Greyhound racing — — — — 2,546,207 42,794 1,172 7,321 (1) Excludes poker tables.
Pinnacle Master Lease In connection with the acquisition of Pinnacle Entertainment, Inc. (“Pinnacle”) in 2018, the Company assumed a triple net master lease with GLPI (“Pinnacle Master Lease”), originally effective April 28, 2016. Pursuant to the Pinnacle Master Lease, the Company leases real estate assets associated with 12 of the gaming facilities used in its operations from GLPI.
(“Pinnacle”), on October 15, 2018, the Company assumed a triple net master lease with GLPI (the “Pinnacle Master Lease”), originally effective April 28, 2016, pursuant to which the Company leases real estate assets associated with 12 of the gaming facilities used in its operations.
Louis, MS PENN Master Lease Land-based gaming 51,000 777 20 291 Hollywood Casino Tunica (2) Tunica, MS PENN Master Lease Dockside gaming 54,000 783 11 494 L’Auberge Baton Rouge (2) Baton Rouge, LA Pinnacle Master Lease Dockside gaming 71,500 1,019 47 205 L’Auberge Lake Charles (2) Lake Charles, LA Pinnacle Master Lease Dockside gaming 71,200 1,391 80 995 Margaritaville Resort Casino (2) Bossier City, LA Margaritaville Lease Dockside gaming 30,000 991 49 395 West segment Ameristar Black Hawk (2) Black Hawk, CO Pinnacle Master Lease Land-based gaming 56,000 914 37 536 Cactus Petes and Horseshu (2) Jackpot, NV Pinnacle Master Lease Land-based gaming 29,000 688 14 416 M Resort Spa Casino (2)(3) Henderson, NV PENN Master Lease Land-based gaming 96,000 1,024 37 390 Zia Park Casino Hobbs, NM PENN Master Lease Land-based gaming/racing 18,000 718 — 154 Midwest segment Ameristar Council Bluffs (2)(7) Council Bluffs, IA Pinnacle Master Lease Dockside gaming 35,000 1,304 20 444 Argosy Casino Alton (2)(8) Alton, IL PENN Master Lease Dockside gaming 23,000 425 9 — Argosy Casino Riverside Riverside, MO PENN Master Lease Dockside gaming 56,000 1,098 37 258 Hollywood Casino Aurora (2)(3) Aurora, IL PENN Master Lease Dockside gaming 53,000 831 27 — Hollywood Casino Joliet (2)(3) Joliet, IL PENN Master Lease Dockside gaming 50,000 952 26 100 Hollywood Casino at Kansas Speedway (2)(9) Kansas City, KS Owned - joint venture Land-based gaming 95,000 1,645 28 — Hollywood Casino St.
Louis, MS AR PENN Master Lease Land-based gaming 51,000 766 28 291 Hollywood Casino Tunica (2) Tunica, MS AR PENN Master Lease Dockside gaming 54,000 781 10 494 L’Auberge Baton Rouge (2) Baton Rouge, LA Pinnacle Master Lease Dockside gaming 71,500 962 54 205 L’Auberge Lake Charles (2) Lake Charles, LA Pinnacle Master Lease Dockside gaming 71,200 1,250 85 995 Margaritaville Resort Casino (2) Bossier City, LA Margaritaville Lease Dockside gaming 30,000 956 50 395 West segment Ameristar Black Hawk (2) Black Hawk, CO Pinnacle Master Lease Land-based gaming 56,000 883 39 536 Cactus Petes and Horseshu (2) Jackpot, NV Pinnacle Master Lease Land-based gaming 29,000 642 14 416 M Resort Spa Casino (2)(3) Henderson, NV 2023 Master Lease Land-based gaming 96,000 959 37 390 Zia Park Casino Hobbs, NM AR PENN Master Lease Land-based gaming/racing 18,000 713 — 154 Midwest segment Ameristar Council Bluffs (2)(7) Council Bluffs, IA Pinnacle Master Lease Dockside gaming 35,000 1,295 20 444 Argosy Casino Alton (2)(8) Alton, IL AR PENN Master Lease Dockside gaming 23,000 503 9 — Argosy Casino Riverside Riverside, MO AR PENN Master Lease Dockside gaming 56,000 1,098 37 258 Hollywood Casino Aurora (2)(3) Aurora, IL 2023 Master Lease Dockside gaming 53,000 831 27 — Hollywood Casino Joliet (2)(3) Joliet, IL 2023 Master Lease Dockside gaming 50,000 952 26 100 Hollywood Casino at Kansas Speedway (2)(9) Kansas City, KS Owned - joint venture Land-based gaming 95,000 1,553 35 — Hollywood Casino St.
South Segment 1 st Jackpot Casino is the closest Tunica-area casino to downtown Memphis, Tennessee. It features slot machines, table games, a café, a sportsbook for live betting and a live entertainment venue. Ameristar Vicksburg, which is the largest dockside casino in central Mississippi, is located along the Mississippi River approximately 45 miles west of Mississippi’s largest city, Jackson.
It features slot machines, table games, a café, a sportsbook for live betting, and a live entertainment venue. Ameristar Vicksburg, which is the largest dockside casino in central Mississippi, is located along the Mississippi River approximately 45 miles west of Mississippi’s largest city, Jackson.
We also have a number of trademark applications pending with the USPTO. Among others, we have a licensing agreement with a third-party to use the “Margaritaville ® ” trademark in connection with the operations of Margaritaville in Bossier City, Louisiana.
We also have a number of trademark applications pending with the USPTO, CIP, and the World Intellectual Property Organization. Among others, we have a licensing agreement with a third-party to use the “Margaritaville” trademark in connection with the operations of Margaritaville in Bossier City, Louisiana.
Valley Race Park has not been open since March 2020. We acquired the remaining 50% of these properties, as well as a license for a racetrack in Manor, Texas, just outside of Austin, on August 1, 2021. Sanford-Orlando Kennel Club. The former greyhound racetrack and related property was sold to a land developer during the fourth quarter of 2020.
Valley Race Park has not been open since March 2020. We acquired the remaining 50% of these properties, as well as a license for a racetrack in Manor, Texas, just outside of Austin, on August 1, 2021. Sanford-Orlando Kennel Club.
PENN Master Lease Pursuant to a triple net master lease with GLPI (the “PENN Master Lease”), which became effective November 1, 2013, the Company leases real estate assets associated with 19 of the gaming facilities used in its operations.
AR PENN Master Lease Prior to the effective date of the AR PENN Master Lease (as defined and discussed below), the Company leased real estate assets associated with 19 of the gaming facilities used in its operations via a triple net master lease with GLPI (the “PENN Master Lease”), which became effective November 1, 2013.
The acquisition provides us with the technology, resources and audience reach to accelerate our media and sports betting strategy across North America. For additional information on our acquisitions, see Note 6, “Acquisitions and Dispositions.” Barstool. PENN Entertainment, Inc., through a wholly-owned subsidiary, held a 36% equity interest in Barstool.
The acquisition provided us with the technology, resources, and audience reach to accelerate our media and sports betting strategy across North America. Barstool . PENN Entertainment, Inc., through a wholly-owned subsidiary, held a 36% equity interest in Barstool.
Operating Properties The table below summarizes certain features of the properties owned, operated or managed by us as of December 31, 2022, by reportable segment (all area and capacity metrics are approximate): Location Real Estate Assets Lease or Ownership Structure Type of Facility Gaming Square Footage Gaming Machines Table Games (1) Hotel Rooms Northeast segment Ameristar East Chicago (2) East Chicago, IN Pinnacle Master Lease Dockside gaming 58,500 1,273 46 288 Hollywood Casino Bangor Bangor, ME PENN Master Lease Land-based gaming/racing 31,750 681 14 152 Hollywood Casino at Charles Town Races (2) Charles Town, WV PENN Master Lease Land-based gaming/racing 115,000 1,900 66 153 Hollywood Casino Columbus (3) Columbus, OH PENN Master Lease Land-based gaming 180,500 1,612 54 — Hollywood Casino at Greektown (2) Detroit, MI Greektown Lease Land-based gaming 100,000 2,145 63 400 Hollywood Casino Lawrenceburg (2)(4) Lawrenceburg, IN PENN Master Lease Dockside gaming 149,500 1,350 61 463 Hollywood Casino Morgantown (2)(5) Morgantown, PA Morgantown Lease Land-based gaming 81,000 736 30 — Hollywood Casino at PENN National Race Course (2) Grantville, PA PENN Master Lease Land-based gaming/racing 99,500 1,803 55 — Hollywood Casino Perryville (2)(3) Perryville, MD Perryville Lease Land-based gaming 34,500 766 13 — Hollywood Casino at The Meadows (2)(3) Washington, PA Meadows Lease Land-based gaming/racing 125,000 2,006 96 — Hollywood Casino Toledo (3) Toledo, OH PENN Master Lease Land-based gaming 135,000 1,725 47 — Hollywood Casino York (2) York, PA Operating Lease (not with REIT Landlord) Land-based gaming 80,000 570 26 — Hollywood Gaming at Dayton Raceway Dayton, OH PENN Master Lease Land-based gaming/racing 43,000 996 — — Hollywood Gaming at Mahoning Valley Race Course Youngstown, OH PENN Master Lease Land-based gaming/racing 54,000 1,019 — — Marquee by PENN (6) Pennsylvania N/A Land-based gaming N/A 140 — — Plainridge Park Casino Plainville, MA Pinnacle Master Lease Land-based gaming/racing 50,000 939 — — 1 Table of Contents South segment 1 st Jackpot Casino (2) Tunica, MS PENN Master Lease Dockside gaming 40,000 758 11 — Ameristar Vicksburg (2) Vicksburg, MS Pinnacle Master Lease Dockside gaming 70,000 976 19 148 Boomtown Biloxi (2) Biloxi, MS PENN Master Lease Dockside gaming 34,500 563 22 — Boomtown Bossier City (2) Bossier City, LA Pinnacle Master Lease Dockside gaming 30,000 765 12 187 Boomtown New Orleans (2) New Orleans, LA Pinnacle Master Lease Dockside gaming 30,000 950 26 150 Hollywood Casino Gulf Coast (2) Bay St.
Operating Properties The table below summarizes certain features of the properties owned, operated, or managed by us as of December 31, 2023, by reportable segment (all area and capacity metrics are approximate): Location Real Estate Assets Lease or Ownership Structure Type of Facility Gaming Square Footage Gaming Machines Table Games (1) Hotel Rooms Northeast segment Ameristar East Chicago (2) East Chicago, IN Pinnacle Master Lease Dockside gaming 64,000 1,101 43 288 Hollywood Casino Bangor Bangor, ME AR PENN Master Lease Land-based gaming/racing 31,750 666 14 152 Hollywood Casino at Charles Town Races (2) Charles Town, WV AR PENN Master Lease Land-based gaming/racing 115,000 1,913 64 153 Hollywood Casino Columbus (2)(3) Columbus, OH 2023 Master Lease Land-based gaming 180,500 1,676 20 — Hollywood Casino at Greektown (2) Detroit, MI Greektown Lease Land-based gaming 100,000 2,162 63 400 Hollywood Casino Lawrenceburg (2)(4) Lawrenceburg, IN AR PENN Master Lease Dockside gaming 149,500 1,295 47 463 Hollywood Casino Morgantown (2)(5) Morgantown, PA Morgantown Lease Land-based gaming 81,000 717 26 — Hollywood Casino at PENN National Race Course (2) Grantville, PA AR PENN Master Lease Land-based gaming/racing 94,371 1,750 54 — Hollywood Casino Perryville (2)(3) Perryville, MD 2023 Master Lease Land-based gaming 34,500 754 17 — Hollywood Casino at The Meadows (2)(3) Washington, PA 2023 Master Lease Land-based gaming/racing 125,000 1,962 91 — Hollywood Casino Toledo (2)(3) Toledo, OH 2023 Master Lease Land-based gaming 135,000 1,760 46 — Hollywood Casino York (2) York, PA Operating Lease (not with REIT Landlord) Land-based gaming 80,000 608 33 — Hollywood Gaming at Dayton Raceway (2) Dayton, OH AR PENN Master Lease Land-based gaming/racing 40,700 1,033 — — 1 Table of Contents Hollywood Gaming at Mahoning Valley Race Course (2) Youngstown, OH AR PENN Master Lease Land-based gaming/racing 54,000 1,032 — — Marquee by PENN (6) Pennsylvania N/A Land-based gaming N/A 150 — — Plainridge Park Casino (2) Plainville, MA Pinnacle Master Lease Land-based gaming/racing 50,225 934 — — South segment 1 st Jackpot Casino (2) Tunica, MS AR PENN Master Lease Dockside gaming 46,535 687 9 — Ameristar Vicksburg (2) Vicksburg, MS Pinnacle Master Lease Dockside gaming 70,926 937 25 148 Boomtown Biloxi (2) Biloxi, MS AR PENN Master Lease Dockside gaming 34,500 562 22 — Boomtown Bossier City (2) Bossier City, LA Pinnacle Master Lease Dockside gaming 30,000 644 12 187 Boomtown New Orleans (2) New Orleans, LA Pinnacle Master Lease Dockside gaming 30,000 803 26 150 Hollywood Casino Gulf Coast (2) Bay St.
The Company’s portfolio is further bolstered by its industry-leading my choice ® customer loyalty program (the “my choice program”), which offers our approximately 26 million members a unique set of rewards and experiences across business channels. Reportable Segments We have five reportable segments: Northeast, South, West, Midwest, and Interactive.
PENN’s portfolio is further bolstered by our industry-leading PENN Play TM customer loyalty program, which offers our over 29 million members a unique set of rewards and experiences across business channels. Reportable Segments We have five reportable segments: Northeast, South, West, Midwest, and Interactive.
In addition, PENN Interactive operates retail sportsbooks across the Company’s portfolio, including, as of December 31, 2022, 25 internally-branded or Barstool-branded retail sportsbooks located at the Company’s properties in Colorado, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Michigan, Mississippi, Pennsylvania and West Virginia.
In addition, PENN Interactive supports operations for retail sportsbooks across the Company’s portfolio of casinos, including, as of December 31, 2023, 30 retail sportsbooks located at the Company’s properties in Colorado, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Ohio, Pennsylvania, and West Virginia.
S ee Note 12 , “ Leases ” , in the notes to our Consolidated Financial Statements for further discussion. 2023 Master Lease As part of the Term Sheet and concurrent with the execution of the Amended and Restated PENN Master Lease described above, the Company and GLPI agreed to enter into a new master lease (the “2023 Master Lease”), effective January 1, 2023, specific to the properties associated with Aurora, Joliet, Columbus, Toledo, M Resort, Meadows, and Perryville, and a master development agreement (the “Master Development Agreement”).
S ee Note 12, “Leases” in the notes to our Consolidated Financial Statements for further discussion. 2023 Master Lease Concurrent with the execution of the AR PENN Master Lease, the Company and GLPI entered into a new triple net master lease (the “2023 Master Lease”), effective January 1, 2023, specific to the property associated with Aurora, Joliet, Columbus, Toledo, M Resort, Hollywood Casino at The Meadows (“Meadows”), and Hollywood Casino Perryville (“Perryville”) and a master development agreement (the “Master Development Agreement”).
Marquee by PENN is our licensed VGT route operator with a network of 28 truck stop establishments in Pennsylvania. 3 Table of Contents Plainridge Park Casino is located 20 miles southwest of the Boston beltway just off interstate 95 in Plainville, Massachusetts.
The property also includes a sportsbook for live sports betting, various restaurants, and bars amongst other amenities. Marquee by PENN is our licensed VGT route operator with a network of 28 truck stop establishments in Pennsylvania. Plainridge Park Casino is located 20 miles southwest of the Boston beltway just off interstate 95 in Plainville, Massachusetts.
Pursuant to the Term Sheet, the Company and GLPI agreed to amend and restate the PENN Master Lease (the “Amended and Restated PENN Master Lease”) to (i) remove the land and buildings for Hollywood Casino Aurora (“Aurora”), Hollywood Casino Joliet (“Joliet”), Hollywood Casino Columbus (“Columbus”), Hollywood Casino Toledo (“Toledo”) and the M Resort Spa Casino (“M Resort”); (ii) make associated adjustments to the rent after which the initial rent in the Amended and Restated PENN Master Lease will be $284.1 million, consisting of $208.2 million of Building Base Rent, $43.0 million of Land Base Rent and $32.9 million of Percentage Rent (as such terms are defined in the Amended and Restated PENN Master Lease); and (iii) terminate the existing leases associated with Hollywood Casino at The Meadows (“Meadows”) and Hollywood Casino Perryville (“Perryville”).
On February 21, 2023, the Company and GLPI entered into an agreement to amend and restate the PENN Master Lease (the “AR PENN Master Lease”), effective January 1, 2023, to (i) remove the land and buildings for Hollywood Casino Aurora (“Aurora”), Hollywood Casino Joliet (“Joliet”), Hollywood Casino Columbus (“Columbus”), Hollywood Casino Toledo (“Toledo”) and the M Resort Spa Casino (“M Resort”), and (ii) make associated adjustments to the rent after which the initial rent in the AR PENN Master Lease was reset to $284.1 million, consisting of $208.2 million of building base rent, $43.0 million of land base rent and $32.9 million of percentage rent (as such terms are defined in the AR PENN Master Lease).
Hollywood Gaming at Mahoning Valley Race Course is a Hollywood-themed casino and raceway located in Youngstown, Ohio featuring video lottery terminals and a one-mile thoroughbred racetrack. The property also includes various restaurants, and bars, amongst other amenities. On January 1, 2023, Hollywood Gaming at Mahoning Valley opened a Barstool Sportsbook for live sports betting.
It features video lottery terminals, a five-eighths mile standardbred racetrack, a sportsbook for live sports betting, as well as various restaurants and bars, amongst other amenities. 3 Table of Contents Hollywood Gaming at Mahoning Valley Race Course is a Hollywood-themed casino and raceway located in Youngstown, Ohio featuring video lottery terminals and a one-mile thoroughbred racetrack.
These laws and regulations include, but are not limited to, restrictions and conditions concerning alcoholic beverages, environmental matters, employees, health care, currency transactions, taxation, zoning and building codes, data privacy, anti-money laundering, and marketing and advertising. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted.
Our businesses are subject to various international, federal, state, provincial, and local laws and regulations in addition to gaming regulations. These laws and regulations include, but are not limited to, restrictions and conditions concerning alcoholic beverages, environmental matters, employees, health care, currency transactions, taxation, zoning and building codes, data privacy, anti-money laundering, and marketing and advertising.
(Nasdaq: GLPI) (“GLPI”), a real estate investment trust (“REIT”). As of December 31, 2022, in addition to the Master Leases, five individual gaming facilities used in our operations are subject to individual triple net leases.
As of December 31, 2023 , in addition to the Master Leases, three individual gaming facilities used in our operations are subject to individual triple net leases.
Our commitment to an equal-opportunity and respectful workplace characterized by both diversity and inclusion, in which everyone feels valued, respected and supported, is a factor driving our success.
Employees and Human Capital Resources The Company’s key human capital management objectives are to attract, retain, and develop diverse and high-quality talent. Our commitment to an equal-opportunity and respectful workplace characterized by both diversity and inclusion, in which everyone feels valued, respected, and supported, is a factor driving our success.
In addition to gaming offerings, Plainridge Park Casino features various restaurants and bars, along with a 5/8-mile live harness racing facility with a two-story clubhouse for simulcast operations, special events, and live racing viewing. On January 31, 2023, Plainridge Park Casino opened a Barstool Sportsbook for live sports betting.
In addition to gaming offerings and a sportsbook for live sports betting, Plainridge Park Casino features various restaurants and bars along with a five-eighths mile live harness racing facility with a two-story clubhouse for simulcast operations, special events, and live racing viewing. South Segment 1 st Jackpot Casino is the closest Tunica-area casino to downtown Memphis, Tennessee.
For a more detailed description of the statutes and regulations to which we are subject, see Exhibit 99.1, “Description of Government Regulations,” to this Annual Report on Form 10-K, which is incorporated herein by reference. Our businesses are subject to various international, federal, state, provincial and local laws and regulations in addition to gaming regulations.
Violations of laws or regulations in one jurisdiction could result in disciplinary action in other jurisdictions. For a 8 Table of Contents more detailed description of the statutes and regulations to which we are subject, see Exhibit 99.1, “Description of Government Regulations” to this Annual Report on Form 10-K, which is incorporated herein by reference.
Northeast Segment Ameristar East Chicago is located less than 25 miles from downtown Chicago, Illinois and offers guests a gaming and entertainment experience in the Chicago metropolitan area.
(13) In March 2020 Valley Race Park closed due to COVID-19 and remains non-operational. 2 Table of Contents Northeast Segment Ameristar East Chicago is located less than 25 miles from downtown Chicago, Illinois and offers guests a gaming and entertainment experience in the Chicago metropolitan area.
On January 1, 2023, Hollywood Casino Columbus opened a Barstool Sportsbook for live sports betting. Hollywood Casino at Greektown is located in the Greektown district of Detroit, Michigan, and is one of four casino hotels in the Detroit-Windsor area.
Hollywood Casino at Greektown is located in the Greektown district of Detroit, Michigan, and is one of four casino hotels in the Detroit-Windsor area.
Eight collective bargaining agreements are scheduled to expire in 2023. Although we believe that we have good employee relations, there can be no assurance that we will be able to extend or enter into replacement agreements.
As of December 31, 2023, we had approximately 23,333 full-time and part-time employees. We had 35 collective bargaining agreements covering approximately 4,180 active employees. Twelve collective bargaining agreements are scheduled to expire in 2024. Although we believe that we have good employee relations, there can be no assurance that we will be able to extend or enter into replacement agreements.
The 2023 Master Lease has an initial term through October 31, 2033 with three subsequent five-year renewal periods on the same terms and conditions, exercisable at the Company’s option. The 2023 Master Lease will be cross-defaulted, cross-collateralized, and coterminous with the Amended and Restated PENN Master Lease and subject to a parent guarantee.
The 2023 Master Lease has an initial term through October 31, 2033 with three subsequent five-year renewal periods on the same terms and conditions, exercisable at the Company’s option. The 2023 Master Lease terminated the individual triple net leases associated with Meadows and Perryville.
Highlights from last year’s efforts include the expansion of our $4 million STEM Scholarship Fund and internship program which now has six Historically Black Colleges and Universities (“HBCU”s) in the program.
Survey results were strong with an average of 97% replying favorably to applying new knowledge and 9.3/10 would recommend the training. Highlights from last year’s efforts include the expansion of our $4 million STEM Scholarship Fund and internship program which now has six Historically Black Colleges and Universities (HBCUs) in the program.
Patent and Trademark Office (“USPTO”), including but not limited to, “Ameristar ® ,” “Argosy ® ,” “Boomtown ® ,” “Greektown ® ,” “Hollywood Casino ® ,” “Hollywood Gaming ® ,” “L’Auberge ® ,” “M Resort ® ,” and “MyChoice ® ” among other trademarks.
Patent and Trademark Office (“USPTO”), the Canadian Intellectual Property Office (“CIPO”), and/or other intellectual property organizations in the European Union, the United Kingdom, and other countries around the world, including but not limited to, “Ameristar ® ,” “Argosy ® ,” “Boomtown ® ,” “Hollywood Casino ® ,” “Hollywood Gaming ® ,” “L’Auberge ® ,” “M Resort ® ,” and “PENN Play TM ” among other trademarks.
Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our financial condition, results of operations and cash flows. Employees and Human Capital Resources The Company’s key human capital management objectives are to attract, retain and develop diverse and high-quality talent.
Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our financial condition, results of operations and cash flows.
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 PENN Master Lease and the Pinnacle Master Lease (as such terms are defined below and collectively referred to as the “Master Leases”), with Gaming and Leisure Properties, Inc.
The facility and parking lot area is owned by the Company and operates a restaurant and offers year-round simulcast operations. 6 Table of Contents 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 with Gaming and Leisure Properties, Inc.
Louis community of Lemay, Missouri. River City Casino features a hotel, multiple dining outlets, an entertainment lounge, and over 10,000 square feet of conference space. Interactive Operations PENN Interactive operates our online sports betting and casino app called Barstool Sportsbook and Casino, which, as of December 31, 2022, is live in 14 states, four of which also offer iCasino.
Louis community of Lemay, Missouri. River City Casino features a hotel, multiple dining outlets, an entertainment lounge, and over 10,000 square feet of conference space.
Competition The gaming, media and entertainment industries are characterized by an increasingly high degree of competition among a large number of participants. In a broad sense, both our retail and interactive gaming operations face competition from all manner of leisure and entertainment activities, including shopping, athletic events, television and movies, concerts and travel.
More generally, both our retail and interactive gaming operations face competition from all manner of leisure and entertainment activities, including shopping, athletic events, television and movies, concerts, and travel. Competition is discussed in further detail within “Item 1A.
Subsequent to year end, on February 17, 2023, we completed the acquisition of all of the outstanding shares of common stock of Barstool not already owned by us for approximately $388 million, excluding transaction expenses, repayment of Barstool indebtedness and other purchase price adjustments (the “Barstool Acquisition”).
On February 17, 2023, we completed the acquisition of all of the outstanding shares of common stock of Barstool not already owned by us for a cash consideration of approximately $315.3 million and the issuance of 2,442,809 shares of our common stock to certain former stockholders of Barstool.
Government Regulation and Gaming Issues The gaming and racing industries are highly regulated, and we must maintain our licenses and pay gaming taxes to continue our operations. Our online gaming operations and each of our properties are subject to extensive regulation under the laws, rules and regulations of the jurisdictions where we operate.
Our online gaming operations and each of our properties are subject to extensive regulation under the laws, rules, and regulations of the jurisdictions where we operate. These laws, rules, and regulations generally concern the responsibility, financial stability, and character of the owners, managers, and persons with financial interests in the gaming operations.
Retail Operations As of December 31, 2022, we owned, managed, or had ownership interests in 43 gaming and racing properties in 20 states. In addition, we offer live sports betting at our properties in twelve states.
See Note 18, “Segment Information” and Note 12, “Leases” in the notes to our Consolidated Financial Statements for further segment and lease structure information, respectively. Retail Operations As of December 31, 2023, we owned, managed, or had ownership interests in 43 gaming and racing properties in 20 states.
Interactive includes all of our online sports betting, iCasino and online social gaming operations, management of retail sports betting, media, and our proportionate share of earnings attributable to our equity method investment in Barstool Sports, Inc. (“Barstool”). See Note 18, “Segment Information,” for further information.
Interactive includes all of our online sports betting, online casino/iCasino, and social gaming (collectively referred to as “online gaming”) operations, management of retail sports betting, media, and the operating results of Barstool Sports, Inc.
Further, PENN Interactive has entered into multi-year agreements with leading sports betting operators for online sports betting and iCasino market access across our portfolio of properties. Pursuant to these agreements, as of December 31, 2022, 5 Table of Contents such sports betting and iCasino operators have commenced operations in Indiana, Louisiana, Pennsylvania, and West Virginia.
As of January 2023, PENN Interactive also began providing retail sportsbook management services to select casino operators outside our Company’s portfolio. Further, through PENN’s portfolio of properties, PENN Interactive has entered into multi-year agreements with other gaming operators for online sports betting and iCasino market access in several states.
Upon assumption of the Meadows Lease, there were eight years remaining of the initial ten-year term, with three subsequent, five-year renewal options followed by one four-year renewal option on the same terms and conditions, exercisable at the Company’s option.
The current term of the AR PENN Master Lease expires on October 31, 2033 and thereafter contains three renewal terms of five years each on the same terms and conditions, exercisable at the Company’s option.
As of the closing of the Barstool Acquisition, Barstool became an indirect wholly owned subsidiary of PENN. See Note 7, “Investments in and Advances to Unconsolidated Affiliates” for additional detail on our acquisition of the remaining Barstool shares. Other Freehold Raceway. Through our joint venture in Pennwood Racing, Inc. (“Pennwood”), we own 50% of Freehold Raceway.
Pursuant to the Barstool SPA, PENN sold 100% of the outstanding shares of Barstool to David Portnoy in exchange for nominal cash consideration (one dollar) and certain non-compete and other restrictive covenants. Other Freehold Raceway. Through our joint venture in Pennwood Racing, Inc. (“Pennwood”), we own 50% of Freehold Raceway.
Removed
As of the issuance date of this report, PENN operates online sports betting in 16 jurisdictions upon the addition of Ohio in January 2023.
Added
In August 2023, PENN entered into a transformative, exclusive long-term strategic alliance with ESPN, Inc. and ESPN Enterprises, Inc. (together, “ESPN”) relating to online sports betting within the United States.
Removed
(12) In the fourth quarter of 2020, we sold the land underlying the Sanford-Orlando Kennel Club racetrack which discontinued our live racing operations. We continue to operate our simulcast racing business. (13) In March 2020 Valley Race Park closed due to COVID-19 and remains non-operational.
Added
PENN’s ability to leverage the leading sports media brands in the United States (ESPN) and Canada (theScore) will position us to significantly expand our digital footprint and efficiently grow our customer ecosystem.
Removed
It features video lottery terminals, a 5/8-mile standardbred racetrack, as well as various restaurants and bars, amongst other amenities. On January 1, 2023, Hollywood Gaming at Dayton Raceway opened a Barstool Sportsbook for live sports betting.
Added
(“Barstool” or “Barstool Sports”) subsequent to the Barstool Acquisition on February 17, 2023 and prior to the Barstool divestiture on August 8, 2023 (as defined and discussed in Note 6, “Acquisitions and Dispositions” in the notes to our Consolidated Financial Statements).
Removed
As of the issuance date of this report, PENN Interactive operates online sports betting in 15 states and 30 internally-branded or Barstool-branded retail sportsbooks within the Company’s portfolio upon the addition of Ohio and Massachusetts in January 2023. Additionally, as of January 2023, PENN Interactive provides sportsbook management services outside of our Company’s portfolio.
Added
In addition, we offer live sports betting at our properties in 13 states.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

141 edited+47 added−88 removed113 unchanged
Biggest changeRisks Related to Our Operations • We have certain properties that generate a significant percentage of our revenues and our ability to meet our operating and debt service requirements is dependent, in part, upon the continued success of these properties. • We are required to utilize a significant portion of our cash flow from operations to make our rent payments under our Triple Net Leases, which could adversely affect our ability to fund our operations and growth and limit our ability to react to competitive and economic changes. • Most of our facilities are leased and could experience risks associated with leased property. • Our operations could be disrupted if management agreements and/or leases with third parties and local governments are not renewed. • There can be no assurance that we will be able to compete effectively or generate sufficient returns on our recently expanded sports betting and online gaming operations, including our acquisition of Barstool and theScore. • Our operations and their success are largely dependent on the skill and experience of management and key personnel. • Our business could suffer if we cannot attract and retain talented team members. • Collective bargaining activity and strikes could disrupt our operations, increase our labor costs, and interfere with the ability of our management to focus on executing our business strategies. • If we fail to detect fraud or theft, including by our users and employees, our reputation may suffer which could harm our brand and reputation and negatively impact our business, financial condition and results of operations and can subject us to investigations and litigation. • We rely on, among other things, copyrights, trademarks, trade secrets, confidentiality procedures, and contractual provisions to protect our intellectual property rights and we may be unable to protect or may not be successful in protecting our intellectual property rights. • Our commercial success depends upon us avoiding the infringement of intellectual property rights owned by others and any such infringements, including those that are inadvertent, may have a material adverse effect on our business. • Our technology contains third-party open source software components, and failure to comply with the terms of the underlying open source software licenses could restrict our ability to provide our offerings. • We may face disruption and other difficulties in integrating and managing properties or other initiatives we have recently acquired, may develop, or may acquire in the future. • We lease facilities that are located in areas that experience extreme weather conditions. • We rely on third-party payment processors to process deposits and withdrawals made by our online sports betting and iCasino users, and if we cannot manage our relationships with such third parties and other payment-related risks, our business, financial condition and results of operations could be adversely affected. 10 Table of Contents • If our third-party mobile application distribution platforms or service providers do not perform adequately or terminate their relationships with us, our costs may increase and our business, financial condition, and results of operations could be adversely affected. • If internet and other technology-based service providers experience service interruptions, our ability to conduct our business may be impaired and our business, financial condition and results of operations could be adversely affected. • We rely on third party cloud infrastructure services to deliver our offerings to users.
Biggest changeRisks Related to Our Operations • We have certain retail properties that generate a significant percentage of our revenues and our ability to meet our operating and debt service requirements is dependent, in part, upon the continued success of these properties. • A significant portion of our cash flow from operations is used to make interest payments and rent payments under our debt and lease agreements. • We may require additional capital to support our growth plans, and such capital may not be available on terms acceptable to us, if at all. • Most of our facilities are leased and could experience risks associated with leased property. • We are subject to risks and costs related to climate change regulations and greenhouse gas effects. • Investors’ and other stakeholders’ expectations of our performance relating to environmental, social, and governance factors may impose additional costs and expose us to new risks. • Our management agreements and/or leases with third parties and local governments may not be renewed. • There can be no assurance that we will be able to compete effectively or generate sufficient returns on our recently expanded sports betting and iCasino operations, including ESPN BET. • Our operations and their success are largely dependent on the skill and experience of management and key personnel. • Our business is dependent on our ability to attract and retain talented team members. • We face risks related to collective bargaining activity and strikes. • We face the risk of fraud, theft, and cheating. • We rely on, among other things, copyrights, trademarks, trade secrets, confidentiality procedures, and contractual provisions to protect our intellectual property rights and we may be unable to protect or may not be successful in protecting our intellectual property rights. • Our commercial success depends upon us avoiding the infringement of intellectual property rights owned by others. • Our technology contains third-party open source software components. • We may face disruption and other difficulties in integrating and managing acquired operations or other initiatives we have recently acquired, may develop, or may acquire in the future. • We lease facilities that are located in areas that experience extreme weather conditions, which may increase in frequency and severity as a result of climate change. • We rely on third parties to provide services that are essential to the operation of our online sports betting and iCasino business, including geolocation, identity and age verification, payment processing, and sports data. • Our growth will depend, in part, on the success of our strategic relationships with third parties. 10 Table of Contents • We are reliant on our partnership with ESPN, and our failure to maintain that relationship could negatively impact our business, reputation, and strategic goals. • The growth of our Interactive segment will depend on our ability to attract and retain users and require investments in our online offerings, technology, and strategic marketing initiatives. • Participation in the sports betting industry exposes us to trading, liability management, and pricing risk. • We follow the sports betting industry practice of restricting and managing betting limits at the individual customer level based on individual customer profiles and risk level to the enterprise; however, there is no guarantee that gaming regulatory authorities will allow operators such as us to place limits at the individual customer level. • We extend credit to a portion of our customers who wager at our retail properties, and we may not be able to collect gaming receivables from our credit customers. • The success, including win or hold rates, of existing or future retail, sports betting, and iCasino products depends on a variety of factors and is not completely controlled by us. • We face a number of challenges prior to opening new or upgraded gaming properties, launching iCasinos and sports betting in new jurisdictions, or launching new iCasino or sports betting offerings.
If we, or if GLPI or VICI in the case of leases pursuant to which we are the sub-lessee, are unable to renew these leases and agreements on satisfactory terms as they expire or if disputes arise regarding the terms of these agreements, our business may be disrupted and, in the event of disruptions in multiple jurisdictions, could have a material adverse effect on our financial condition, results of operations, and cash flows.
If we, or if GLPI or VICI, in the case of leases pursuant to which we are the sub-lessee, are unable to renew these leases and agreements on satisfactory terms as they expire or if disputes arise regarding the terms of these agreements, our business may be disrupted and, in the event of disruptions in multiple jurisdictions, could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
We follow the sports betting industry practice of restricting and managing betting limits at the individual customer level based on individual customer profiles and risk level to the enterprise; however there is no guarantee that gaming regulatory authorities will allow operators such as us to place limits at the individual customer level.
We follow the sports betting industry practice of restricting and managing betting limits at the individual customer level based on individual customer profiles and enterprise risk; however, there is no guarantee that gaming regulatory authorities will allow operators such as us to place limits at the individual customer level.
If we are not in compliance with these laws and regulations or we are subject to a substantial penalty, it could have a material adverse effect on our financial condition, results of operations, and cash flows. State and local smoking restrictions have and may continue to negatively affect our business.
If we are not in compliance with these laws and regulations or we are subject to a substantial penalty, it could have a material adverse effect on our business, financial condition, results of operations, and cash flows. State and local smoking restrictions have and may continue to negatively affect our business.
To the extent that we collect, control, or process such information, federal, state, provincial and foreign privacy laws and regulations, including without limitation the California Consumer Privacy Act (including the amended California Privacy Rights Act), the EU’s General Data Protection Regulation, Ontario, Canada’s Freedom of Information and Protection of Privacy Act, and Canada’s Personal Information Protection and Electronic Documents Act, require us to make disclosures regarding our privacy and information sharing practices, safeguard and protect the privacy of such information, and, in some cases, provide patrons the opportunity to “opt out” of the use of their information for certain purposes, any of which could limit our ability to leverage existing and future databases of information which could have a material adverse effect on our financial condition, results of operations, and cash flows.
To the extent that we collect, control, or process such information, federal, state, provincial and foreign privacy laws and regulations, including without limitation the California Consumer Privacy Act (including the amended California Privacy Rights Act), the EU’s General Data Protection Regulation, Ontario, Canada’s Freedom of Information and Protection of Privacy Act, and Canada’s Personal Information Protection and Electronic Documents Act, require us to make disclosures regarding our privacy and information sharing practices, safeguard and protect the privacy of such information, and, in some cases, provide patrons the opportunity to “opt out” of the use of their information for certain purposes, any of which could limit our ability to leverage existing and future databases of information which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Such changes, if adopted, could have a material adverse effect on our financial condition, results of operations, and cash flows. Available Information We maintain a website at www.pennentertainment.com that includes more information about us. The contents of our website are not part of this Annual Report on Form 10-K. Our electronic filings with the U.S.
Such changes, if adopted, could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Available Information We maintain a website at www.pennentertainment.com that includes more information about us. The contents of our website are not part of this Annual Report on Form 10-K. Our electronic filings with the U.S.
Any suspension or delay in our suppliers’ ability to provide us adequate equipment or supplies, or in our ability to procure equipment or supplies from other sources in a timely manner or at all, could impair our ability to meet customer demand and therefore could have a material adverse effect on our business, financial condition or results of operations.
Any suspension or delay in our suppliers’ ability to provide us adequate equipment or supplies, or in our ability to procure equipment or supplies from other sources in a timely manner or at all, could impair our ability to meet customer demand and therefore could have a material adverse effect on our business, prospects, financial condition or results of operations.
In particular, local opposition can delay or increase the anticipated cost of a project, and, in projects where we team up with a joint venture partner, if we cannot reach agreement with such partners, or if our relationships otherwise deteriorate, we could face significant increased costs and delays.
In particular, local opposition can delay or increase the anticipated cost of a project, and, in projects where we team up with a joint venture partner or licensing partner, if we cannot reach agreement with such partners, or if our relationships otherwise deteriorate, we could face significant increased costs and delays.
As described in more detail below, a substantial portion of our network infrastructure is provided by third parties, including internet service providers and other technology-based service providers. We require technology-based service providers to implement cyber-attack-resilient systems and processes.
As described in more detail below, a substantial portion of our technological and network infrastructure is provided by third parties, including internet service providers and other technology-based service providers. We require technology-based service providers to implement cyber-attack-resilient systems and processes.
The success, including win or hold rates, of existing or future retail and online sports betting and online gaming products depends on a variety of factors and is not completely controlled by us. The retail and online gaming industries are characterized by an element of chance.
The success, including win or hold rates, of existing or future retail, sports betting, and iCasino products depends on a variety of factors and is not completely controlled by us. The retail and online gaming industries are characterized by an element of chance.
Increased instances of cyber-attacks may also have a negative reputational impact on us and our properties that may result in a loss of customer confidence and, as a result, may have a material adverse effect on our financial condition, results of operations, and cash flows.
Increased instances of cyber-attacks may also have a negative reputational impact on us and our properties that may result in a loss of customer confidence and, as a result, may have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Termination of the PENN Master Lease, Pinnacle Master Lease, or Morgantown Lease could result in a default under our debt agreements and could have a material adverse effect on our financial condition, results of operations, and cash flows.
Termination of the PENN Master Lease, the 2023 Master Lease, Pinnacle Master Lease, or Morgantown Lease could result in a default under our debt agreements and could have a material adverse effect on our financial condition, results of operations, and cash flows.
Further, the success of our proposed sports betting and online gaming operations is dependent on a number of additional factors, many of which are beyond our control, including the ultimate tax rates and license fees charged by jurisdictions across the United States and Canada; our ability to gain market share in a new market; the timeliness and the technological and popular viability of our products; our ability to compete with new entrants in the market; changes in consumer demographics and public tastes and preferences; cancellations and delays in sporting seasons and sporting matches as a result of events such as player strikes or lockouts; and the availability and popularity of other forms of entertainment.
Further, the success of our proposed sports betting and iCasino operations is dependent on a number of additional factors, many of which are beyond our control, including the ultimate tax rates and license fees charged by jurisdictions across the United States and Canada; our ability to gain market share in a new market; the timeliness and the technological and popular viability of our products; our ability to compete with new entrants in the market; changes in consumer demographics and public tastes and preferences; cancellations and delays in sporting seasons and sporting matches as a result of events such as player strikes or lockouts; and the availability and popularity of other forms of entertainment.
In addition to the element of chance, win rates (hold percentages) may also (depending on the game involved) be affected by the spread of limits and factors that are beyond our control, such as a user’s skill, experience and behavior, the mix of games played, the financial resources of users, the volume of bets placed and the amount of time spent gambling.
In addition to the element of chance, win rates (hold percentages) may also (depending on the game involved) be affected by the spread of limits and factors that are beyond our control, such as a user’s skill, experience, and behavior, the mix of games played, the financial resources of users, the volume of bets placed and the amount of time spent playing.
Regardless of whether third-party claims of infringement against us have any merit, these claims could: • adversely affect our relationships with our customers and vendors; • be time-consuming to evaluate and defend; • result in costly litigation; • result in negative publicity for us; • divert our management’s attention and resources; • cause product and software delivery delays or stoppages; 17 Table of Contents • subject us to significant liabilities; • require us to enter into costly royalty or licensing agreements; • require us to develop possible workaround solutions that may be costly and disruptive to implement; or • require us to cease certain activities or to cease distributing our products and delivering our services in certain markets.
Regardless of whether third-party claims of infringement against us have any merit, these claims could: • adversely affect our relationships with our customers and vendors; • be time-consuming to evaluate and defend; • result in costly litigation; • result in negative publicity for us; • divert our management’s attention and resources; • cause product and software delivery delays or stoppages; • subject us to significant liabilities; • require us to enter into costly royalty or licensing agreements; • require us to develop possible workaround solutions that may be costly and disruptive to implement; or • require us to cease certain activities or to cease distributing our products and delivering our services in certain markets.
Furthermore, this risk is particularly pertinent to our online gaming and sports betting initiatives because regulations in this area are not as fully developed or established. Gaming regulatory authorities generally can require that any record holder or beneficial owner of our securities file an application for a license or similar finding of suitability.
Furthermore, this risk is particularly pertinent to our sports betting and iCasino initiatives because regulations in this area are not as fully developed or established. Gaming regulatory authorities generally can require that any record holder or beneficial owner of our securities file an application for a license or similar finding of suitability.
While we enter license, confidentiality and non-disclosure agreements with our employees and vendors, consultants, users, potential users and others to attempt to limit access to and distribution of proprietary and confidential information, it is possible that: • some or all of our confidentiality and non-disclosure agreements will not be honored; • third parties will independently develop equivalent technology or misappropriate our technology or designs; • disputes will arise with our strategic partners, users or others concerning the ownership of intellectual property; • unauthorized disclosure or use of our intellectual property, including source code, know-how or trade secrets will occur; or • contractual provisions may not be enforceable.
While we enter license, confidentiality and non-disclosure agreements with our 16 Table of Contents employees and vendors, consultants, users, potential users, and others to attempt to limit access to and distribution of proprietary and confidential information, it is possible that: • some or all of our confidentiality and non-disclosure agreements will not be honored; • third parties will independently develop equivalent technology or misappropriate our technology or designs; • disputes will arise with our strategic partners, users or others concerning the ownership of intellectual property; • unauthorized disclosure or use of our intellectual property, including source code, know-how or trade secrets will occur; or • contractual provisions may not be enforceable.
Any unscheduled disruption in our technology services or interruption in the supply of electrical power as a result of extreme weather, or otherwise, could result in an immediate, and possibly substantial, loss of revenues due to a shutdown of our retail casino gaming (including slot machines and security systems), sports betting and online gaming operations.
Any unscheduled disruption in our technology services or interruption in the supply of electrical power as a result of extreme weather, or otherwise, could result in an immediate, and possibly substantial, loss of revenues due to a shutdown of our retail casino gaming (including slot machines and security systems), sports betting, and iCasino operations.
The steps we take to deter and mitigate the risks of breaches may not be successful, and any resulting compromise or loss of data or systems could adversely impact operations or regulatory compliance and could result in remedial expenses, fines, litigation, disclosures, and loss of reputation, potentially impacting our financial results.
The steps we take to deter and mitigate the risks of attacks may not be successful, and any resulting compromise or loss of data or systems could adversely impact operations or regulatory compliance and could result in remedial expenses, fines, litigation, disclosures, and loss of reputation, potentially impacting our financial results.
A “skin” is a legally-authorized license from a gaming regulatory authority to offer sports betting or online gaming services provided by such a retail operator. The “skin” provides a market access opportunity for mobile operators to operate in the jurisdiction pending licensure and other required approvals by the jurisdiction’s gaming regulatory authority.
A “skin” is a legally authorized license from a gaming regulatory authority to offer sports betting or iCasino services provided by such a retail operator. The “skin” provides a market access opportunity for mobile operators to operate in the jurisdiction pending licensure and other required approvals by the jurisdiction’s gaming regulatory authority.
Any of these events could have a material adverse effect on our financial condition, results of operations, and cash flows.
Any of these events could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Finally, given the competitive nature of these types of limited license opportunities, litigation is possible. We cannot assure you that we will be able to manage the combined operations effectively or realize any of the anticipated benefits of our acquisitions or development projects.
Finally, given the competitive nature of these types of limited license opportunities, litigation is possible. We cannot assure you that we will be able to manage the combined operations that we develop or acquire effectively or realize any of the anticipated benefits of our acquisitions or development projects.
In the event of the occurrence of any such issues with our existing technology or product offerings, substantial engineering and marketing resources and management attention may be diverted from other projects to correct these issues, which may delay other projects and the achievement of our strategic objectives.
In the event of the occurrence of any such issues with our existing technology or product offerings, substantial resources and management attention may be diverted from other projects to correct these issues, which may delay other projects and the achievement of our strategic objectives.
Additionally, and as described in more detail below, we have entered into agreements with other sports betting and online gaming operators and may enter into additional agreements with strategic partners and other third-party vendors to provide market access in certain jurisdictions.
Additionally, and as described in more detail below, we have entered into agreements with other online sports betting and iCasino operators and may enter into additional agreements with strategic partners and other third-party vendors to provide market access in certain jurisdictions.
We compete with other companies both within and outside of our industry for talented personnel. If we cannot recruit, train, develop, and retain skilled and experienced personnel to our corporate, retail operations, sports betting and online gaming, and media businesses, we could experience increased employee turnover, decreased guest or user satisfaction, low morale, inefficiency, or internal control failures.
We compete with other companies both within and outside of our industry for talented personnel. If we cannot recruit, train, develop, and retain skilled and experienced personnel to our corporate, retail operations, sports betting and iCasino, and media businesses, we could experience increased employee turnover, decreased guest or user satisfaction, low morale, inefficiency, or internal control failures.
This regulation also requires us to report certain 27 Table of Contents suspicious activity, including any transaction that exceeds $5,000 that we know, suspect or have reason to believe involves funds from illegal activity or is designed to evade federal regulations or reporting requirements and to verify sources of funds, in response to which we have implemented Know Your Customer processes.
This regulation also requires us to report certain suspicious activity, including any transaction that exceeds $5,000 that we know, suspect or have reason to believe involves funds from illegal activity or is designed to evade federal regulations or reporting requirements and to verify sources of funds, in response to which we have implemented Know Your Customer processes.
We must comply with federal, state, provincial and foreign requirements regarding notice and consent to obtain, use, share, transmit and store such information, including providing the opportunity and mechanisms to “opt out” from certain uses in some jurisdictions. Furthermore, we may face conflicting obligations arising from the potential concurrent application of laws 28 Table of Contents of multiple jurisdictions.
We must comply with federal, state, provincial, and foreign requirements regarding notice and consent to obtain, use, share, transmit and store such information, including providing the opportunity and mechanisms to “opt out” from certain uses in some jurisdictions. Furthermore, we may face conflicting obligations arising from the potential concurrent application of laws of multiple jurisdictions.
Decreases in discretionary consumer spending or consumer preferences brought about by factors such as perceived or actual general economic conditions, effects of declines in consumer confidence in the economy, any future employment and credit crisis, the impact of high and prolonged inflation, particularly with respect to housing, energy and food costs, the increased cost of travel, decreased disposable consumer income and wealth, fears of war and future acts of terrorism, or widespread illnesses or epidemics, including COVID-19, can have a material adverse effect on discretionary spending and other areas of economic behavior that directly impact the gaming and entertainment industries in general and could further reduce customer demand for the products and amenities that we offer, which may negatively impact our revenues and operating cash flow.
Decreases in discretionary consumer spending or consumer preferences brought about by factors such as perceived or actual general economic conditions, effects of declines in consumer confidence in the economy, any future employment or credit crisis, the impact of high and prolonged inflation, particularly with respect to housing, energy, and food costs, the increased cost of travel, decreased disposable consumer income and wealth, fears of war and future acts of terrorism, or widespread illnesses or epidemics can have a material adverse effect on discretionary spending and other areas of economic behavior that directly impact the gaming and entertainment industries in general and 11 Table of Contents could further reduce customer demand for the products and amenities that we offer, which may negatively impact our revenues and operating cash flow.
However, if internet service providers experience service interruptions, 20 Table of Contents because of cyber-attacks, or due to an event causing an unusually high volume of internet use (such as a pandemic or public health emergency), communications over the internet may be interrupted and impair our ability to conduct our business.
However, if internet service providers experience service interruptions, because of cyber-attacks, or due to an event causing an unusually high volume of internet use (such as a pandemic or public health emergency), communications over the internet may be interrupted and impair our ability to conduct our business.
Any expansion of gaming or restriction on or prohibition of our gaming operations or enactment of other adverse regulatory changes could have a material adverse effect on our operating results. Certain public and private issuances of securities and other transactions that we are party to also require the approval of some gaming regulatory authorities.
Any expansion of gaming or restriction on or prohibition of our gaming operations or enactment of other adverse regulatory changes could have a material adverse effect on our business, financial condition, and operating results. Certain public and private issuances of securities and other transactions that we are party to also require the approval of some gaming regulatory authorities.
As owners and managers of retail casino gaming, online gaming, sports betting, video lottery, VGTs, and pari-mutuel wagering operations, we are subject to extensive state, provincial and local regulation.
As owners and managers of retail casino gaming, iCasino, sports betting, video lottery, VGTs, and pari-mutuel wagering operations, we are subject to extensive state, provincial and local regulation.
Increased competition may require us to make substantial capital expenditures to maintain and enhance the competitive positions of our properties, including making expenditures to increase the attractiveness and add to the appeal of our facilities, including increasing the manner and frequency in which we refresh, refurbish or replace fixtures and equipment at our properties.
Increased competition may require us to make substantial capital expenditures to maintain and enhance the competitive positions of our properties, including making expenditures to increase the attractiveness and add to the appeal of our facilities, increasing the manner and frequency in which we refresh, refurbish or replace fixtures, equipment and gaming offerings.
Use and distribution of open source software may entail greater risks than use of third-party commercial or proprietary software, as open source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding infringement claims or the quality of the code.
Use and distribution of open source software may entail greater risks than use of third-party commercial or proprietary software, as open source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding 17 Table of Contents infringement claims or the quality of the code.
There is no assurance that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our Amended Credit Facilities in amounts sufficient to enable us to fund our liquidity needs, including with respect to our indebtedness.
There is no assurance that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our Amended Credit Facilities in amounts sufficient to enable us to fund our liquidity needs, including with respect to our indebtedness and rent payments.
To date, none of these matters have had a material adverse effect on our financial condition, results of operations, and cash flows; however, there can be no assurance that such matters will not have such an effect in the future.
To date, none 26 Table of Contents of these matters have had a material adverse effect on our financial condition, results of operations, and cash flows; however, there can be no assurance that such matters will not have such an effect in the future.
Insufficient numbers of talented team members could also limit our ability to grow and 15 Table of Contents expand our businesses. A shortage of frontline and skilled labor could also result in higher wages that would increase our labor costs, which could reduce our profits.
Insufficient numbers of talented team members could also limit our ability to grow and expand our businesses. A shortage of frontline and skilled labor could also result in higher wages that would increase our labor costs, which could reduce our profits.
In addition, the development of new operations may involve regulatory, legal and competitive risks, and, as it relates to property 18 Table of Contents acquisitions, construction and local opposition risks, as well as the risks attendant to partnership deals on these development opportunities.
In addition, the development of new operations may involve regulatory, legal, and competitive risks, and, as it relates to property acquisitions, construction, and local opposition risks, as well as the risks attendant to partnership deals on these development opportunities.
Additionally, our retail casino gaming, sports betting and online gaming operations rely heavily on technology services and an uninterrupted supply of electrical power.
Additionally, our retail casino gaming, sports betting, and iCasino operations rely heavily on technology services and an uninterrupted supply of electrical power.
We maintain significant property insurance, including business interruption coverage, for these types of casualty events; however, if any such events occur, there can be no assurances that we will be fully or promptly compensated, if at all, for losses at any of our properties in the event of future inclement weather or casualty events or from the closings of our properties due to widespread illnesses or epidemics, including COVID-19.
We maintain significant property insurance, including business interruption coverage, for these types of casualty events; however, if any such events occur, there can be no assurances that we will be fully or promptly compensated, if at all, for losses at any of our properties in the event of future inclement weather or casualty events 12 Table of Contents or from the closings of our properties due to widespread illnesses or epidemics.
Achieving growth in our community of users may 23 Table of Contents require us to increasingly engage in sophisticated and costly sales and marketing and promotional efforts, which may not make sense in terms of return on investment.
Achieving growth in our community of users may require us to increasingly engage in sophisticated and costly sales and marketing and promotional efforts, which may not make sense in terms of return on investment.
We also rely on other software and services supplied by third parties, such as communications and internal software, and our business may be adversely affected to the extent such software and services do not meet our expectations, contain errors or vulnerabilities, are compromised or experience outages.
We also rely on other software and services supplied by third parties, such as communications and internal software, and our business may be adversely affected to the extent such software and services do not meet our expectations, 22 Table of Contents contain errors or vulnerabilities, are compromised or experience outages.
Regulators may also levy substantial fines or penalties against us or our subsidiaries for violations of gaming laws or regulations, or against the people involved in violating such gaming laws or regulations, and/or seize our assets or the assets of our subsidiaries.
Regulators may also levy substantial fines or penalties against us or our subsidiaries for violations of gaming laws or regulations, or against the people involved in violating such gaming laws or 24 Table of Contents regulations, and/or seize our assets or the assets of our subsidiaries.
We rely upon third-party distribution platforms, including the Apple App Store and Google Play store, for distribution of our entertainment, media and mobile sports betting and online gaming applications.
We rely upon third-party distribution platforms, including the Apple App Store and Google Play store, for distribution of our entertainment, media, and mobile sports betting and iCasino applications.
If we are not able to maintain or improve our market share, or if our offerings do not continue to be popular, our business could suffer. Our results of operations may fluctuate due to seasonality and other factors and, therefore, our periodic operating results will not be guarantees of future performance.
If we are not able to maintain or improve our market share, or if our offerings do not continue to be popular, our Interactive segment’s business, prospects, financial condition, and results of operations could suffer. Our results of operations may fluctuate due to seasonality and other factors and, therefore, our periodic operating results will not be guarantees of future performance.
In addition, as we seek to launch online gaming and sports betting offerings in additional jurisdictions, we will need to hire additional qualified employees, such as engineers, IT professionals, product managers and compliance personnel. Given the significant competition in this area for qualified candidates, we may be unable to hire qualified candidates.
In addition, as we seek to launch sports betting or iCasino offerings in additional jurisdictions, we will need to hire additional qualified employees, such as software engineers, IT professionals, product managers and compliance personnel. Given the significant competition in this area for qualified candidates, we may be unable to hire qualified candidates.
Any failure to prevent or mitigate security breaches or cyber risk could result in interruptions to the services we provide, degrade the user 22 Table of Contents experience, and cause our users to lose confidence in our products and services.
Any failure to prevent or mitigate security breaches or cyber risk could result in interruptions to the services we provide, degrade the user experience, and cause our users to lose confidence in our products and services.
If Apple or Google choose to de-list any of our mobile applications due to what they perceive to be objectionable content or violation of Apple or Google rules or codes of conduct, it could have a material negative impact on our business.
If Apple or Google choose to de-list any of our mobile applications due to what they perceive to be objectionable content or violation of Apple or Google rules or codes of conduct, it could have a material negative impact on our business, financial condition, and results of operations.
Under the sports betting and online gaming laws of certain jurisdictions, sports betting and online gaming are limited to a finite number of retail operators, such as casinos, tribes or tracks, who own a “skin” or “skins” under that jurisdiction’s law.
Additionally, under the sports betting and iCasino laws of certain jurisdictions, sports betting and iCasinos are limited to a finite number of retail operators, such as casinos, tribes or tracks, who own a “skin” or “skins” under that jurisdiction’s law.
If we are unable to secure additional financing, we could be forced to limit or suspend expansion, development and renovation projects and acquisitions, which may adversely affect our financial condition, results of operations, and cash flows. The capacity under our Amended Revolving Credit Facility is $1.0 billion, of which $977.5 million is available as of December 31, 2022.
If we are unable to secure additional financing, we could be forced to limit or suspend expansion, development and renovation projects and acquisitions, which may adversely affect our business, prospects, financial condition, results of operations, and cash flows. The capacity under our Amended Revolving Credit Facility is $1.0 billion, of which $978.3 million is available as of December 31, 2023.
Gaming regulatory authorities have input into our operations, for instance, hours of operation, location or relocation of a facility, numbers and types of slot machines and table games, and the types of sports events or casino games we may offer as part of our sports betting and online gaming operations.
Gaming regulatory authorities have input into our operations, for instance, our hours of operation, the location or relocation of any of our properties, numbers and types of slot machines and table games, and the types of sports events or casino games we may offer as part of our sports betting and iCasino operations.
No assurance can be given that, when we endeavor to open new or upgraded retail gaming properties or launch new online gaming or sports betting channels, the expected timetables for opening such properties or channels will be met in light of the uncertainties inherent in the development of the regulatory framework, construction, the licensing process, legislative action and litigation.
No assurance can be given that, when we endeavor to open new or upgraded retail gaming properties, expand sports betting or iCasinos in new jurisdictions, or launch new sports betting or iCasino offerings, the expected timetables for opening or expanding such properties or offerings will be met in light of the uncertainties inherent in the development of the regulatory framework, construction and/or development, the licensing process, legislative action and litigation.
In addition, the occurrence of such an event may adversely impact general economic or other conditions in the areas in which our properties are located or from which they draw their patrons, and our business, financial condition and results of operations could be materially adversely affected.
In addition, the occurrence of such an event may adversely impact general economic or other conditions in the areas in which our properties are located or from which they draw their patrons, and our business, prospects, financial condition, and results of operations could be materially adversely affected. Shareholder activists could cause a disruption to our business.
We have systems and controls that seek to reduce the risk of daily losses occurring on a gross-win basis, but there can be no assurance that these will be effective in reducing our exposure, and consequently our exposure to this risk in the future.
However, there can be significant variation in gross win percentage event-by-event and day-by-day. We have systems and controls that seek to reduce the risk of daily losses occurring on a gross-win basis, but there can be no assurance that these will be effective in reducing our exposure, and consequently our exposure to this risk in the future.
Likewise, our ability to meet our operating and debt service requirements is dependent, in part, upon the continued success of these properties.
Our ability to meet our operating and debt service requirements is thus dependent, in part, upon the continued success of our properties in these key regions.
Risks Related to Our Business and Industry Our business is sensitive to reductions in discretionary consumer spending as a result of downturns in the economy and other factors outside of our control. Our business is particularly sensitive to downturns in the economy and the associated impact on discretionary spending on leisure activities.
Risks Related to Our Business, Industry, and Market Conditions Our business is sensitive to reductions in discretionary consumer spending because of downturns in the economy and other factors outside of our control. Our business is particularly sensitive to downturns in the economy and the associated impact on discretionary spending on leisure activities.
We may not be successful in these lawsuits, and, especially with increasing class action claims in our industry, litigation could result in costs, settlements, or damages that could significantly impact our financial condition, results of operations, and cash flows. We face extensive regulation from gaming regulatory authorities, which could have a material adverse effect on us.
We may not be successful in these lawsuits, and, especially with increasing class action claims in our industry, litigation could result in costs, settlements, or damages that could significantly impact our business, financial condition, results of operations, and cash flows. We face extensive regulation from gaming regulatory authorities.
If we do not obtain such a license, our prospects, business, operating results and financial condition could be materially adversely affected and we could be required to cease related business operations in some markets and restructure our business to focus on continuing operations in other markets.
If we do not obtain such a license, our prospects, business, operating results, and financial condition could be materially adversely affected, and we could be required to cease related business operations in some markets and restructure our business to focus on continuing operations in other markets. Our technology contains third-party open source software components.
While all our properties are currently open, there remains continuing logistical challenges faced by the entire gaming industry resulting from COVID-19-related labor shortages and supply chain disruptions. Future disruptions, as well as significant negative economic trends, due to the COVID-19 pandemic or other widespread illnesses or epidemics, may adversely affect our stock price.
While all our properties are currently open, there remains continuing logistical challenges faced by the entire gaming industry resulting from COVID-19-related labor shortages and supply chain disruptions. Future disruptions, as well as significant negative economic trends, due to the COVID-19 pandemic or other widespread illnesses or epidemics, may adversely impact our business, prospects, financial condition, and results of operations.
We pay substantial taxes and fees with respect to our operations. From time-to-time, federal, state, provincial and local legislators and officials have proposed changes in tax laws, or in the administration of such laws, affecting the gaming industry.
We pay substantial taxes and fees with respect to our operations, and changes to taxes and fees in our existing jurisdictions could have a material impact on our profitability. From time-to-time, federal, state, provincial, and local legislators and officials have proposed changes in tax laws, or in the administration of such laws, affecting the gaming industry.
These large receivables could have a significant impact on our results of operations if deemed uncollectible.
These large receivables could have a significant impact on our business, financial condition and results of operations if deemed uncollectible.
We are subject to environmental laws and potential exposure to environmental liabilities which could have an adverse effect on us. We are subject to various federal, state, and local environmental laws and regulations that govern our operations, including emissions and discharges into the environment, and the handling and disposal of hazardous and non-hazardous substances and wastes.
We are subject to environmental laws and potential exposure to environmental liabilities. We are subject to various federal, state, and local environmental laws and regulations that govern our operations, including emissions and discharges into the environment, and the handling and disposal of hazardous and non-hazardous substances and wastes.
Gaming regulatory authorities may also conduct investigations into the conduct or associations of our directors, officers, key employees, joint venture partners or vendors to ensure compliance with applicable laws, regulations and standards.
Gaming regulatory authorities may also conduct investigations into the conduct or associations of our directors, officers, key employees, joint venture partners or vendors to ensure compliance with applicable laws, regulations, and standards. We are subject to certain federal, state, provincial and other regulations.
If links to our apps or websites are not displayed prominently in online search results, if fewer users click through to the Apple App Store and Google Play Store or our websites, if our other digital marketing campaigns are not effective, if the costs of attracting users using any of our current methods significantly increase, then our ability to efficiently attract new users could be reduced, our revenue could decline and our business, financial condition and results of operations could be harmed.
If the search engines on which we rely modify their algorithms, change their terms around online betting, if links to our apps or websites are not displayed prominently in online search results, if fewer users click through to the Apple App Store and Google Play Store or our websites, if our other digital marketing campaigns are not effective, or if the costs of attracting users 20 Table of Contents using any of our current methods significantly increase, then our ability to efficiently attract new users could be reduced, our revenue could decline and our business, financial condition and results of operations could be harmed.
In addition, negative publicity related to such schemes could have an adverse effect on our reputation, potentially causing a material adverse effect on our business, financial condition, results of operations and prospects.
Negative publicity related to such acts or schemes could have an adverse effect on our reputation, potentially causing a material adverse effect on our business, financial condition, results of operations, and cash flows.
This expansion of existing casino entertainment properties, the increase in the number of properties and aggressive marketing strategies by many of our competitors have increased competition in many markets in which we compete, and this intense competition can be expected to continue. As competing properties and new markets open, our results of operations may be negatively impacted.
This expansion of existing casino entertainment properties, the increase in the number of properties and aggressive marketing strategies by many of our competitors have increased competition in many markets in which we compete, and this intense competition can be expected to continue.
Although we enter into employment agreements with certain of our senior executives and key personnel, we cannot assure you that we will be able to retain our existing senior executive and management personnel or attract additional qualified senior executive and management personnel. Our business could suffer if we cannot attract and retain talented team members.
Although we enter into employment agreements with certain of our senior executives and key personnel, we cannot assure you that we will be able to retain our existing senior executive and management personnel or attract additional qualified senior executive and management personnel. 15 Table of Contents Our business is dependent on our ability to attract and retain talented team members.
We are required to utilize a significant portion of our cash flow from operations to make our rent payments, which were $925.0 million for the year ended December 31, 2022, pursuant to and subject to the terms and conditions of our Master Leases, Meadows Lease, Perryville Lease, Tropicana Lease, which was terminated on September 26, 2022, and Morgantown Lease each with GLPI, and our Margaritaville Lease and Greektown Lease with VICI (as defined previously, collectively, our “Triple Net Leases”).
We are also required to utilize a significant portion of our cash flow from operations to make our rent payments, which were $937.8 million for the year ended December 31, 2023, pursuant to and subject to the terms and conditions of our Master Leases and Morgantown Lease, each with GLPI, and our Margaritaville Lease and Greektown Lease with VICI (as defined previously, collectively, our “Triple Net Leases”).
Such competitors may spend more money and time on developing and testing products and services, undertake more extensive marketing campaigns, adopt more aggressive pricing or promotional policies or otherwise develop more commercially successful products or services than ours, which could negatively impact our business.
Similarly, there is intense competition among iCasino and online sports betting providers. Such competitors may spend more money and time on developing and testing products and services, undertake more extensive marketing campaigns, adopt more aggressive pricing or promotional policies or otherwise develop more commercially successful products or services than ours, which could negatively impact our business.
Risks Related to our Operations We have certain retail properties that generate a significant percentage of our revenues and our ability to meet our operating and debt service requirements is dependent, in part, upon the continued success of these properties.
Risks Related to our Operations We generate a material percentage of our revenues from certain geographic regions and our ability to meet our operating and debt service requirements is dependent, in part, upon the continued success of these regions.
If alternate technology cannot be obtained or developed, we may not be able to offer certain functionality as part of our offerings, which could adversely affect our business, financial condition and results of operations.
If alternate technology cannot be obtained or developed, we may not be able to offer certain functionality as part of our offerings, which could adversely affect our business, financial condition, and results of operations. If internet and other technology-based service providers experience service interruptions, our ability to conduct our business may be impaired.
The extent of such potential conditions cannot be determined definitely, and may result in additional expense in the event that additional or currently unknown conditions are detected. Material increases to our taxes or the adoption of new taxes or the authorization of new or increased forms of gaming could have a material adverse effect on our future financial results.
The extent of such potential conditions cannot be determined definitely, and may result in additional expense in the event that additional or currently unknown conditions are detected. We may experience material increases to our taxes or the adoption of new taxes or the authorization of new or increased forms of gaming.
In addition, our ability to process e-commerce transactions depends on payment processing and payment network systems. To prepare for system problems, we continuously seek to strengthen and enhance our current facilities and the capabilities of our system infrastructure and support.
In addition, our ability to process transactions, both at our retail properties and online, depends on point-of-sale, payment processing, payment network and database systems. To prepare for system problems, we continuously seek to strengthen and enhance our current facilities and the capabilities of our system infrastructure and support.
Nevertheless, there can be no assurance that the internet infrastructure or our own network systems will continue to be able to meet the demand placed on us by the continued growth of the internet, the overall sports betting and online gaming industry and our users.
Nevertheless, there can be no assurance that these systems will continue to be able to meet the demand placed on us by our customers and the continued growth of the internet, the overall sports betting, and iCasino industry.
Further, the software and services provided by our third-party payment processors may not meet our expectations, contain errors or vulnerabilities, be compromised or experience outages.
The software, systems and services provided by our third-party providers may not meet our expectations, contain errors or weaknesses, be compromised or experience outages.
Our ability to achieve growth in revenue in the future in our Interactive segment and its Barstool Sportsbook and theScore Bet sports betting and online gaming apps will depend, in large part, upon our ability to attract new users to our offerings, retain existing users of our offerings and reactivate users in a cost-effective manner.
Our ability to achieve revenue growth in the future in our Interactive segment (inclusive of ESPN BET, theScore Bet sports betting and iCasino app, and Hollywood iCasino) will depend, in large part, upon our ability to attract new users to our offerings, retain existing users and reactivate inactive users in a cost-effective manner.
The casino barges on which we operate also must meet local fire safety standards. We would incur additional costs if any of the gaming facilities on which we operate were not in compliance with one or more of these regulations.
We would incur additional costs if any of the gaming facilities on which we operate were not in compliance with one or more of these regulations.
The Bank Secrecy Act, enforced by the Financial Crimes Enforcement Network (“FinCEN”) of the U.S. Treasury Department, requires us to report currency transactions in excess of $10,000 occurring within a gaming day, including identification of the guest by name and social security number, to the IRS.
Treasury Department, requires us to report currency transactions in excess of $10,000 occurring within a gaming day, including identification of the guest by name and social security number, to the IRS.
If those properties do not provide us with cash flow to service that indebtedness, we will need to rely on cash flow from our other properties, which would increase our leverage. In addition, if we consummate significant acquisitions in the future, our cash requirements may increase significantly.
If those properties do not provide us with cash flow to service that indebtedness, we will need to rely on cash flow from our other properties, which would increase our leverage.
Our success also depends in part on our ability to anticipate and satisfy user preferences in a timely manner. As we will operate in a dynamic environment characterized by rapidly changing industry and legal standards, our products will be subject to changing consumer preferences that cannot be predicted with certainty.
As we operate in a dynamic environment characterized by rapidly changing industry and legal standards, our products will be subject to changing consumer preferences that cannot be predicted with certainty.
Our filings are also available through a database maintained by the SEC at www.sec.gov.
Our filings are also available through a database maintained by the SEC at www.sec.gov. ITEM 1B. UNRESOLVED STAFF COMMENTS None.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+7 added−5 removed2 unchanged
Biggest changeFuture financing arrangements may also prohibit the payment of dividends under certain conditions. 31 Table of Contents Sales of Unregistered Equity Securities We have not sold any equity securities during the year ended December 31, 2022 that were not previously disclosed in a quarterly report on Form 10-Q or a current report on Form 8-K that was filed during the year.
Biggest changeSales of Unregistered Equity Securities We have not sold any equity securities during the year ended December 31, 2023 that were not previously disclosed in a quarterly report on Form 10-Q or a current report on Form 8-K that was filed during the year. 31 Table of Contents On February 17, 2023, the Company issued 2,442,809 shares of our common stock in conjunction with the Barstool Acquisition (as defined and described in Note 7, “Investments in and Advances to Unconsolidated Affiliates” in the notes to our Consolidated Financial Statements).
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Ticker Symbol and Holders of Record Our common stock is quoted on the NASDAQ Global Select Market under the symbol “PENN.” As of February 16, 2023, there were 1,551 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Ticker Symbol and Holders of Record Our common stock is quoted on the NASDAQ Global Select Market under the symbol “PENN.” As of February 19, 2024, there were 1,525 holders of record of our common stock.
Purchases of Equity Securities On February 1, 2022, our Board of Directors authorized the repurchase of up to $750.0 million of our common stock from time to time on the open market or in privately negotiated transactions (the “February 2022 Authorization”). The repurchase authorization expires on January 31, 2025.
The issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act. Purchases of Equity Securities On February 1, 2022, our Board of Directors authorized the repurchase of up to $750.0 million of our common stock from time to time on the open market or in privately negotiated transactions (the “February 2022 Authorization”).
On December 6, 2022, our Board of Directors authorized an additional $750.0 million program for such repurchases, which expires on December 31, 2025 (the “December 2022 Authorization”). Since we have not yet used the full amount under the February 2022 Authorization, the December 2022 Authorization remains at full capacity. Stock repurchases, if any, will be funded using our available liquidity.
The repurchase authorization expires on January 31, 2025. On December 6, 2022, our Board of Directors authorized an additional $750.0 million program for such repurchases, which expires on December 31, 2025 (the “December 2022 Authorization”). The Company utilized the capacity under the February 2022 Authorization prior to effecting any repurchases under the December 2022 Authorization.
The timing and amount of stock repurchases will depend on a variety of factors, including the market conditions as well as corporate and regulatory considerations. As of December 31, 2022, we have repurchased a total of 17,561,288 shares of our common stock at an average price of $34.23.
Stock repurchases, if any, will be funded using our available liquidity. The timing and amount of stock repurchases, if any, will depend on a variety of factors, including but not limited to, market conditions and corporate and regulatory considerations.
Removed
Subsequent to year end, on February 17, 2023, the Company issued 2,442,809 share of our common stock in conjunction with the Barstool Acquisition (as defined and described in Note 7, “Investments in and Advances to Unconsolidated Affiliates” ). The issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act.
Added
Future financing arrangements may also prohibit the payment of dividends under certain conditions.
Removed
The following table presents the total number of shares of our common stock that we repurchased during the fourth quarter of the year ended December 31, 2022, the average price paid per share, the number of shares that we repurchased as part of our share repurchase program, and the approximate dollar value of shares that still could have been repurchased at the end of the applicable fiscal period pursuant to our share repurchase program: (dollars in millions, except per share data) Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Program October 1, 2022 - October 31, 2022 1,037,677 $ 28.97 1,005,188 $ 211.1 November 1, 2022 – November 30, 2022 605,592 $ 35.01 605,422 $ 189.9 December 1, 2022 - December 31, 2022 1,260,399 $ 32.29 1,260,284 $ 149.2 Total 2,903,668 $ 31.67 2,870,894 (1) Includes 32,489, 170 and 115 shares withheld to pay taxes due upon the vesting of employee restricted stock for the months ended October 31, November 30, and December 31, 2022, respectively. 32 Table of Contents Stock Performance Graph We have historically presented the performance graph by comparing our cumulative total shareholder return against the cumulative total return of the S&P 500 and the median total shareholder return of a selected group of peer companies.
Added
As of December 31, 2023, we have repurchased a total of 5,438,221 shares of our common stock at an average price of $27.54. We did not repurchase any shares of our common stock during the fourth quarter of the year ended December 31, 2023.
Removed
We have decided to change the presentation of our performance graph to replace the selected peer group with the Russell 3000 Casino and Gambling Index because the Company believes that a market index provides a more consistent comparison than the annual Company-selected peer group.
Added
As of December 31, 2023, the remaining availability under our December 2022 Authorization was $749.5 million. 32 Table of Contents Stock Performance Graph The following graph compares the cumulative total shareholder return for the Company's Common Stock since December 31, 2018 to the total returns of the S&P 500 Index and the Russell 3000 Casino and Gambling Index.
Removed
In accordance with SEC rules, the performance graph presents both the indices used in the previous year and the newly selected index.
Added
The comparative returns shown in the graph assumes the investment of $100 in the Company’s Common Stock, the S&P 500 Index, and the Russell 3000 Casino and Gambling Index on December 31, 2018.
Removed
Period Ending December 31, Index 2017 2018 2019 2020 2021 2022 PENN Entertainment, Inc. $ 100.00 $ 60.10 $ 81.58 $ 275.68 $ 165.50 $ 94.80 S&P 500 $ 100.00 $ 95.62 $ 125.72 $ 148.85 $ 191.58 $ 156.89 Russell 3000 Casino and Gambling Index $ 100.00 $ 70.47 $ 101.85 $ 114.43 $ 112.76 $ 84.39 Peer Group Median (1) $ 100.00 $ 73.78 $ 103.93 $ 96.25 $ 93.55 $ 82.10 (1) Peer group includes: Boyd Gaming Corporation, Caesars Entertainment Inc., Las Vegas Sands Corp., MGM Resorts International, Red Rock Resorts, Inc., and Wynn Resorts, Ltd.
Added
Period Ending December 31, Index 2018 2019 2020 2021 2022 2023 PENN Entertainment, Inc. $ 100.00 $ 135.74 $ 458.68 $ 275.36 $ 157.73 $ 138.18 S&P 500 $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 Russell 3000 Casino and Gambling Index $ 100.00 $ 144.53 $ 162.37 $ 160.01 $ 119.75 $ 150.70 A.
Added
Cumulative total return assumes reinvestment of all dividends paid during the measurement period. B. The Company has not paid any cash dividends on its Common Stock during this period. C. The index is reweighted daily using the market capitalization on the previous trading day. D.
Added
If the last day of the applicable year is not a trading day, the preceding trading day is used. E. Historical returns are not indicative of future returns. ITEM 6. RESERVED

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

119 edited+75 added−74 removed57 unchanged
Biggest changeCircumstances include, for instance, temporary property closures as a result of COVID-19, changes in legislation that approves gaming in nearby jurisdictions, further expansion of gaming in jurisdictions where we currently operate, new state legislation that requires the implementation of smoking restrictions at our casinos or any other events outside of our control that make the customer experience less desirable. 53 Table of Contents Reporting units with goodwill, gaming licenses or trademarks which were identified during our 2022 interim and annual impairment assessments as having less than a substantial passing margin were subject to a sensitivity analysis to determine the potential impairment losses: Amount of impairment loss as a result of: (dollars in millions) Carrying Amount Passing Margin Discount Rate +100 bps Terminal Growth Rate -50 bps Goodwill Hollywood Casino at Greektown $30.0 — % $— $— Gaming License Ameristar East Chicago $55.6 3.4 % $7.1 $0.5 Hollywood Casino at Greektown $101.0 — % $14.0 $4.0 PNRC $74.0 — % $11.0 $2.5 Trademark Ameristar Black Hawk $27.5 7.3 % $0.5 $— L’Auberge Lake Charles $47.5 13.7 % $— $— theScore $89.6 13.8 % $— $— Amount of impairment loss as a result of: (dollars in millions) Carrying Amount Passing Margin a 10% decrease in forecasted revenues and EBITDA Goodwill PENN Interactive $1,600.6 11.8 % $61.2 Income taxes Under ASC Topic 740, “Income Taxes” (“ASC 740”), deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities and are measured at the prevailing enacted tax rates that will be in effect when these differences are settled or realized.
Biggest changeRisk Factors” of this Annual Report on Form 10-K. 52 Table of Contents Reporting units with goodwill, gaming licenses or trademarks which were identified during our 2023 annual impairment assessment as having less than a substantial passing margin were subject to a sensitivity analysis to determine the potential impairment losses: Amount of impairment loss as a result of: (dollars in millions) Carrying Amount Passing Margin Discount Rate +100 bps Terminal Growth Rate -50 bps Goodwill Argosy Casino Riverside $161.2 19.0 % $— $— Gaming License Ameristar East Chicago $24.0 — % $5.5 $0.5 Boomtown New Orleans $63.3 13.8 % $0.3 $— Hollywood Casino at Greektown $51.0 — % $9.0 $— Hollywood Casino at PENN National Race Course $55.0 — % $9.0 $— L’Auberge Lake Charles $221.3 5.8 % $18.3 $— Trademark Ameristar East Chicago $16.0 12.5 % $— $— L’Auberge Lake Charles $47.5 16.8 % $— $— theScore $91.2 2.5 % $7.2 $0.2 Amount of impairment loss as a result of: (dollars in millions) Carrying Amount Passing Margin a 10% decrease in forecasted revenues and EBITDA Goodwill PENN Interactive $1,626.2 9.7 % $1.3
The Master Development Agreement provides that GLPI will fund, upon PENN’s request, up to $225 million for the Aurora Project and up to $350 million in the aggregate for the Other Development Projects, in accordance with certain terms and conditions set forth in the Master Development Agreement. These funding obligations of GLPI expire on January 1, 2026.
The Master Development Agreement provides that GLPI will fund up to $225 million for the Aurora Project and, upon PENN’s request, up to $350 million in the aggregate for the Other Development Projects, in accordance with certain terms and conditions set forth in the Master Development Agreement. These funding obligations of GLPI expire on January 1, 2026.
The Master Development Agreement provides that PENN may elect not to proceed with a development project prior to GLPI’s commencement of any equity or debt offering or credit facility draw intended to fund such project or after such time in certain instances, provided that GLPI will be reimbursed for all costs and expenses incurred in connection with such discontinued project.
The Master Development Agreement provides that PENN may elect not to proceed with a development project prior to GLPI’s commencement of any equity or debt offering or credit facility draw intended to fund such a project or after such time in certain instances, provided that GLPI will be reimbursed for all costs and expenses incurred in connection with such discontinued project.
In order to view the operations of their casinos on a more stand-alone basis, gaming companies, including us, have historically excluded from their Adjusted EBITDA calculations of certain corporate expenses that do not relate to the management of specific casino properties. However, Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with GAAP.
In order to view the operations of their casinos on a more stand-alone basis, gaming companies, including us, have historically excluded from their Adjusted EBITDA calculations certain corporate expenses that do not relate to the management of specific casino properties. However, Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with GAAP.
The Master Development Agreement provides that PENN may elect not to proceed with a development project prior to GLPI’s commencement of any equity or debt offering or credit facility draw intended to fund such project or after such time in certain instances, provided that GLPI will be reimbursed for all costs and expenses incurred in connection with such discontinued project.
The Master Development Agreement provides that PENN may elect not to proceed with a development project prior to GLPI’s commencement of any equity or debt offering or credit facility draw intended to fund such a project or after such time in certain instances, provided that GLPI will be reimbursed for all costs and expenses incurred in connection with such discontinued project.
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.
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 (loss) from changes in these percentages.
Risk Factors ,” of this Annual Report on Form 10-K for more information on additional financing risks. 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 and to maximize our enterprise value for our shareholders.
Risk Factors,” of this Annual Report on Form 10-K for more information on additional financing risks. 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.
In general, as it pertains to the Master Leases, such amounts are allocated based on the reporting unit’s projected Adjusted EBITDA as a percentage of the aggregate estimated Adjusted EBITDA of all reporting units subject to either of the Master Leases, as applicable. The Company compares the fair value of its reporting units to the carrying amounts.
In general, as it pertains to the Master Leases, such amounts are allocated based on the reporting unit’s projected Adjusted EBITDA as a percentage of the aggregate estimated Adjusted EBITDA of all reporting units subject to each of the Master Leases, as applicable. The Company compares the fair value of its reporting units to the carrying amounts.
(2) Primarily represents the elimination of intersegment revenues associated with our internally-branded retail sportsbooks, which are operated by PENN Interactive. (3) The total is a mathematical calculation derived from the sum of reportable segments (as well as the Other category).
(2) Primarily represents the elimination of intersegment revenues associated with our retail sportsbooks, which are operated by PENN Interactive. (3) The total is a mathematical calculation derived from the sum of reportable segments (as well as the Other category).
Repurchases by the Company will be subject to available liquidity, general market and economic conditions, alternate uses for the capital and other factors. Share repurchases may be made from time to time through a 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.
Repurchases by the Company are subject to available liquidity, general market and economic conditions, alternate uses for the 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.
Capital Expenditures Capital expenditures are accounted for as either project capital (new facilities or expansions) or maintenance (replacement) which is inclusive of projects such as our Barstool branded retail sportsbooks, our cashless, cardless and contactless technology and hotel renovations.
Capital Expenditures Capital expenditures are accounted for as either project capital (new facilities or expansions) or maintenance (replacement) which is inclusive of projects such as our retail sportsbooks, our cashless, cardless and contactless technology, and hotel renovations.
Such segment reporting is on a basis 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 Adjusted EBITDA and Adjusted EBITDAR, which are non-GAAP financial measures.
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 Adjusted EBITDA and Adjusted EBITDAR, which are non-GAAP financial measures.
Our typical property slot win percentage is in the range of approximately 7% to 11% of slot handle, and our typical table game hold percentage is in the range of approximately 15% to 28% of table game drop. Slot handle is the gross amount wagered during a given period.
Our typical property slot win percentage is in the range of approximately 7% to 11% of slot handle, and our typical table game hold percentage is in the range of approximately 12% to 28% of table game drop. Slot handle is the gross amount wagered during a given period.
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, fund new capital projects at existing properties and provide excess cash for future development and acquisitions.
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.
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 “Risk Factors—Risks Related to Our Capital Structure” within “ Item 1A.
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 “Risk Factors—Risks Related to Our Capital Structure” within “Item 1A.
For example, decreases in discretionary consumer spending have historically been brought about by weakened general economic conditions, such as recessions, inflation, rising interest rate environments, high unemployment levels, higher income taxes, low levels of consumer confidence, weakness in the housing market, high fuel or other transportation costs, and the effects of the COVID-19 pandemic.
For example, decreases in discretionary consumer spending have historically been brought about by weakened general economic conditions, such as recessions, inflation, rising interest rate environments, high unemployment levels, higher income taxes, low levels of consumer confidence, weakness in the housing market, high fuel or other transportation costs, low consumer confidence, and the effects of pandemics.
As such, the value of the trademark is a function of the following assumptions: • Projected revenues; • Selection of an appropriate royalty rate to apply to projected revenues; and • Discounting that reflects the level of risk associated with the after-tax revenue stream associated with the trademark.
As such, the value of the trademark is a function of the following assumptions: • Projected revenues; 51 Table of Contents • Selection of an appropriate royalty rate to apply to projected revenues; and • Discounting that reflects the level of risk associated with the after-tax revenue stream associated with the trademark.
This management’s discussion and analysis of financial condition and results of operations includes discussion as of and for the year ended December 31, 2022 compared to December 31, 2021 .
This management’s discussion and analysis of financial condition and results of operations includes discussion as of and for the year ended December 31, 2023 compared to December 31, 2022 .
Additionally, it does not include a total of $125.2 million related to the payments associated with our (i) contingent purchase price obligations; and (ii) financing arrangement in which we received upfront cash proceeds permitting us to participate in future claims, as they are not fixed obligations.
Additionally, it does not include a total of $254.5 million related to the payments associated with our (i) contingent purchase price obligations; and (ii) financing arrangement in which we received upfront cash proceeds permitting us to participate in future claims, as they are not fixed obligations.
Aside from gaming revenue, our revenues are primarily derived from our hotel, dining, retail, commissions, media, program sales, admissions, concessions and certain other ancillary activities, and our racing operations. 36 Table of Contents Key performance indicators related to gaming revenue are slot handle and table game drop, which are volume indicators, and “win” or “hold” percentage.
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.
There is no minimum number of shares that the 48 Table of Contents Company is required to repurchase and the repurchase authorization may be suspended or discontinued at any time without prior notice.
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.
For a listing of our gaming properties and VGT operations included in each reportable segment, see Note 2, “Significant Accounting Policies,” in the notes to our Consolidated Financial Statements. 37 Table of Contents RESULTS OF OPERATIONS The following table highlights our revenues, net income (loss), and Adjusted EBITDA, on a consolidated basis, as well as our revenues and Adjusted EBITDAR by reportable segment.
For a listing of our gaming properties and VGT operations included in each reportable segment, see Note 2, “Significant Accounting Policies” in the notes to our Consolidated Financial Statements. 36 Table of Contents RESULTS OF OPERATIONS The following table highlights our revenues, net income (loss), and Adjusted EBITDA, on a consolidated basis, as well as our revenues and Adjusted EBITDAR by reportable segment.
During the year ended December 31, 2022, net cash used in financing activities primarily related to $601.1 million of common stock repurchases, net debt repayments of $37.5 million, $18.2 million in debt issuance costs, and $173.7 million in principal payments on our finance leases and finance obligations.
During the year ended December 31, 2022, cash used in financing activities of $853.0 million primarily related to $601.1 million of common stock repurchases, net debt repayments of $37.5 million, $18.2 million in debt issuance costs, and $173.7 46 Table of Contents million in principal payments on our finance leases and finance obligations.
See the “Segment comparison of the years ended December 31, 2022 and 2021” 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.
See the “Segment comparison of the years ended December 31, 2023 and 2022” 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.
PENN’s highly differentiated strategy, which is focused on organic cross-sell opportunities, is reinforced by its investments in market-leading retail casinos, sports media assets, technology, including a state-of-the-art, fully integrated digital sports and iCasino betting platform, and an in-house iCasino content studio.
This highly differentiated strategy, which is focused on organic cross-sell opportunities, is reinforced by our market-leading retail casinos, sports media assets, and technology, including a proprietary state-of-the-art, fully integrated digital sports and iCasino betting platform and an in-house iCasino content studio.
If our ongoing estimates of future cash flows are not met, we may have to record impairment charges in future periods. Our estimates of cash flows are based on the current regulatory and economic climates (including as a result of COVID-19), recent operating information and budgets of the various properties where it conducts operations.
If our ongoing estimates of future cash flows are not met, we may have to record impairment charges in future periods. Our estimates of cash flows are based on the current regulatory and economic climates, recent operating information and budgets of the various properties where it conducts operations.
The impairment charges at Hollywood Casino at Greektown were due to revised cash flow projections as the majority of the hotel was out of service for longer than anticipated during renovations caused by water damage.
The impairment charges recorded in 2022 at Greektown were due to revised cash flow projections as the majority of the hotel was out of service for longer than anticipated during renovations caused by water damage.
As of December 31, 2022, PENN operated 43 properties in 20 states, online sports betting in 15 jurisdictions and iCasino in five jurisdictions, under a portfolio of well-recognized brands including Hollywood Casino ® , L’Auberge ® , Barstool Sportsbook ® , and theScore Bet Sportsbook and Casino ® .
As of December 31, 2023, PENN operated 43 properties in 20 states, online sports betting in 18 jurisdictions and iCasino in five jurisdictions, under a portfolio of well-recognized brands including Hollywood Casino ® , L’Auberge ® , ESPN BET™, and theScore Bet Sportsbook and Casino ® .
Other For the year ended December 31, $ Change % / bps Change (dollars in millions) 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 2022 vs. 2021 2021 vs. 2020 Revenues: Gaming $ — $ — $ 0.3 $ — $ (0.3) N/M (100.0) % Food, beverage, hotel and other 21.3 10.6 3.6 10.7 7.0 100.9 % 194.4 % Total revenues $ 21.3 $ 10.6 $ 3.9 $ 10.7 $ 6.7 100.9 % 171.8 % Adjusted EBITDAR $ (97.6) $ (100.7) $ (80.7) $ 3.1 $ (20.0) N/M N/M N/M - Not meaningful Other consists of the Company’s stand-alone racing operations, as well as corporate overhead costs, which primarily includes 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 to a property.
Other For the year ended December 31, $ Change % / bps Change (dollars in millions) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 2023 vs. 2022 2022 vs. 2021 Revenues: Food, beverage, hotel, and other $ 20.2 $ 21.3 $ 10.6 $ (1.1) $ 10.7 (5.2) % 100.9 % Total revenues $ 20.2 $ 21.3 $ 10.6 $ (1.1) $ 10.7 (5.2) % 100.9 % Adjusted EBITDAR $ (110.8) $ (97.6) $ (100.7) $ (13.2) $ 3.1 N/M N/M N/M - Not meaningful Other consists of the Company’s stand-alone racing operations, as well as corporate overhead costs, which primarily includes 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.
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.
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. In addition, the acquisition of Score Media and Gaming, Inc.
For the year ending December 31, 2023, our anticipated capital expenditures are approximately $413 million, which include capital expenditures under our Triple Net Leases, which require us to spend a specified percentage of revenues.
For the year ending December 31, 2024, our anticipated capital maintenance expenditures are approximately $225.0 million, which include capital expenditures under our Triple Net Leases, which require us to spend a specified percentage of revenues.
See “Segment comparison of the years ended December 31, 2022, and 2021” below for more detailed explanations of the fluctuations in revenues.
See “Segment comparison of the years ended December 31, 2023 and 2022” below for more detailed explanations of the fluctuations in revenues.
Under normal operating conditions, our properties generate significant operating cash flow since most of our revenue is cash-based from slot machines, table games, and online gaming, including sports betting.
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.
No amounts were drawn on our Amended Revolving Credit Facility. We have no debt maturing prior to 2026. As of December 31, 2022 we had conditional obligations under letters of credit issued pursuant to the Amended Credit Facilities with face amounts aggregating to $22.5 million resulting in $977.5 million available borrowing capacity under our Amended Revolving Credit Facility.
No amounts were drawn on our Amended Revolving Credit Facility. We have no debt maturing prior to 2026. As of December 31, 2023 we had conditional obligations under letters of credit issued pursuant to the Amended Credit Facilities with face amounts aggregating to $21.7 million resulting in $978.3 million available borrowing capacity under our Amended Revolving Credit Facility.
Impair ment losses for the year ended December 31, 2022 primarily relate to impairment charges at our Hollywood Casino at Greektown property for goodwill and other intangible assets of $37.4 million and $65.4 million, respectively, as a result of an interim impairment assessment during the third quarter of 2022 as well as an impairment charge at our Hollywood Casino at PENN National Race Course (“PNRC”) property for other intangible assets of $13.6 million as a result of our annual impairment assessment during the fourth quarter of 2022.
Impairment losses for the year ended December 31, 2022 primarily relate to impairment charges at our Greektown property for goodwill and other intangible assets of $37.4 million and $65.4 million, respectively, as a result of an interim impairment assessment during the third quarter of 2022 as well as an impairment charge at our PNRC property for other intangible assets of $13.6 million as a result of our annual impairment assessment during the fourth quarter of 2022.
Our gaming revenue is derived primarily from slot machines (which represented approximately 84%, 84% and 87% of our gaming revenue in 2022, 2021 and 2020, respectively) and, to a lesser extent, table games and online gaming consisting of online slots, online table games, and online sports betting.
Our gaming revenue is derived primarily from slot machines (which represented approximately 85%, 84%, and 84% of our gaming revenue in 2023, 2022, and 2021, respectively) and, to a lesser extent, table games, online sports betting, and iCasino.
We further define Adjusted EBITDAR margin by reportable segment as Adjusted EBITDAR for each segment divided by segment revenues. 45 Table of Contents Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures The following table includes a reconciliation of net income (loss), which is determined in accordance with GAAP, to Adjusted EBITDA, Adjusted EBITDAR, Adjusted EBITDA margin and Adjusted EBITDAR margin, which are non-GAAP financial measures: For the year ended December 31, (dollars in millions) 2022 2021 2020 Net income (loss) $ 221.7 $ 420.5 $ (669.1) Income tax expense (benefit) (46.4) 118.6 (165.1) Loss on early extinguishment of debt 10.4 — 1.2 Income from unconsolidated affiliates (23.7) (38.7) (13.8) Interest expense, net 758.2 562.8 544.1 Interest income (18.3) (1.1) (0.9) Other (income) expenses 72.1 (2.5) (106.6) Operating income (loss) 974.0 1,059.6 (410.2) Stock-based compensation (1) 58.1 35.1 14.5 Cash-settled stock-based award variance (1)(2) (15.5) 1.2 67.2 Loss (gain) on disposal of assets (1) 7.9 1.1 (29.2) Contingent purchase price (1) (0.6) 1.9 (1.1) Pre-opening expenses (1)(3) 4.1 5.4 11.8 Depreciation and amortization 567.5 344.5 366.7 Impairment losses 118.2 — 623.4 Insurance recoveries, net of deductible charges (1) (10.7) — (0.1) Income from unconsolidated affiliates 23.7 38.7 13.8 Non-operating items of equity method investments (4) 7.9 7.7 4.7 Other expenses (1)(3)(5) 55.2 44.8 13.5 Adjusted EBITDA 1,789.8 1,540.0 675.0 Rent expense associated with triple net operating leases (1) 149.6 454.4 419.8 Adjusted EBITDAR $ 1,939.4 $ 1,994.4 $ 1,094.8 Net income (loss) margin 3.5 % 7.1 % (18.7) % Adjusted EBITDA margin 28.0 % 26.1 % 18.9 % Adjusted EBITDAR margin 30.3 % 33.8 % 30.6 % (1) These items are included in “General and administrative” within the Company’s Consolidated Statements of Operations.
We further define Adjusted EBITDAR margin by reportable segment as Adjusted EBITDAR for each segment divided by segment revenues. 44 Table of Contents Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures The following table includes a reconciliation of net income (loss), which is determined in accordance with GAAP, to Adjusted EBITDA and Adjusted EBITDAR, which are non-GAAP financial measures, as well as related margins: For the year ended December 31, (dollars in millions) 2023 2022 2021 Net income (loss) $ (491.4) $ 221.7 $ 420.5 Income tax (benefit) expense (8.2) (46.4) 118.6 Interest expense, net 464.7 758.2 562.8 Interest income (40.3) (18.3) (1.1) Income from unconsolidated affiliates (25.3) (23.7) (38.7) Gain on Barstool Acquisition, net (83.4) — — Gain on REIT transactions, net (500.8) — — Loss on early extinguishment of debt — 10.4 — Other (income) expense (5.5) 72.1 (2.5) Operating income (loss) (690.2) 974.0 1,059.6 Loss on disposal of Barstool 923.2 — — Stock-based compensation (1) 85.9 58.1 35.1 Cash-settled stock-based award variance (1)(2) (13.8) (15.5) 1.2 Loss on disposal of assets (1) 0.1 7.9 1.1 Contingent purchase price (1) 1.9 (0.6) 1.9 Pre-opening expenses (1)(3) — 4.1 5.4 Depreciation and amortization 435.1 567.5 344.5 Impairment losses (4) 130.6 118.2 — Insurance recoveries, net of deductible charges (1) (13.9) (10.7) — Income from unconsolidated affiliates 25.3 23.7 38.7 Non-operating items of equity method investments (5) 7.4 7.9 7.7 Other expenses (1)(3)(6) 29.9 55.2 44.8 Adjusted EBITDA 921.5 1,789.8 1,540.0 Rent expense associated with triple net operating leases (1) 591.1 149.6 454.4 Adjusted EBITDAR $ 1,512.6 $ 1,939.4 $ 1,994.4 Net income (loss) margin (7.7) % 3.5 % 7.1 % Adjusted EBITDA margin 14.5 % 28.0 % 26.1 % Adjusted EBITDAR margin 23.8 % 30.3 % 33.8 % (1 ) These items are included in “General and administrative” within the Company’s Consolidated Statements of Operations.
On December 6, 2022, a second share repurchase program was authorized for an additional $750 million (the “December 2022 Authorization”). The December 2022 Authorization expires on December 31, 2025. The Company plans to utilize the remaining capacity under the February 2022 Authorization prior to effecting any repurchases under the December 2022 Authorization.
On December 6, 2022, a second share repurchase program was authorized for an additional $750 million (the “December 2022 Authorization”). The December 2022 Authorization expires on December 31, 2025. 47 Table of Contents The Company utilized the capacity under the February 2022 Authorization prior to effecting any repurchases under the December 2022 Authorization.
Equity securities were provided to the Company in conjunction with entering into multi-year agreements with sports betting operators for online sports betting and iCasino market access across our portfolio. For the year ended December 31, 2022, other income primarily consisted of unrealized holding losses of $69.9 million on equity shares.
Equity securities were provided to the Company in conjunction with entering into multi-year agreements with sports betting operators for online sports betting and iCasino market access across our portfolio. For the year ended December 31, 2023, other income primarily consisted of dividend income of $10.8 million, offset by unrealized holding losses of $6.4 million on equity shares.
Although Adjusted EBITDA includes rent expense associated with our triple net operating leases, we believe Adjusted EBITDA is useful as a supplemental measure in evaluating the performance of our consolidated results of operations. We define Adjusted EBITDA margin as Adjusted EBITDA divided by consolidated revenues.
Adjusted EBITDA is inclusive of rent expense associated with our triple net operating leases with our REIT landlords. Although Adjusted EBITDA includes rent expense associated with our triple net operating leases, we believe Adjusted EBITDA is useful as a supplemental measure in evaluating the performance of our consolidated results of operations.
For the year ended December 31, $ Change % Change (dollars in millions) 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 2022 vs. 2021 2021 vs. 2020 Net cash provided by operating activities $ 878.2 $ 896.1 $ 338.8 $ (17.9) $ 557.3 (2.0) % 164.5 % Net cash used in investing activities $ (258.6) $ (1,221.8) $ (233.7) $ 963.2 $ (988.1) (78.8) % 422.8 % Net cash provided by (used in) financing activities $ (853.0) $ 339.9 $ 1,310.1 $ (1,192.9) $ (970.2) N/M (74.1) % N/M - Not meaningful 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.
For the year ended December 31, $ Change % Change (dollars in millions) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 2023 vs. 2022 2022 vs. 2021 Net cash provided by operating activities $ 455.9 $ 878.2 $ 896.1 $ (422.3) $ (17.9) (48.1) % (2.0) % Net cash used in investing activities $ (742.6) $ (258.6) $ (1,221.8) $ (484.0) $ 963.2 187.2 % (78.8) % Net cash provided by (used in) financing activities $ (262.6) $ (853.0) $ 339.9 $ 590.4 $ (1,192.9) (69.2) % N/M N/M - Not meaningful 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.
While we anticipate that a significant amount of our future growth will come through the pursuit of opportunities within other distribution channels, such as retail and online sports betting and iCasino, acquisitions of gaming properties at reasonable valuations, greenfield projects, and jurisdictional and property expansions in under-penetrated markets, there can be no assurance that this will occur.
In addition, while we anticipated 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.
On May 3, 2022, the Company entered into a Second Amended and Restated Credit Agreement with its various lenders (the “Second Amended and Restated Credit Agreement”).
Debt Issuance and Other long-term Obligations On May 3, 2022, the Company entered into a Second Amended and Restated Credit Agreement with its various lenders (the “Second Amended and Restated Credit Agreement”).
Adjusted EBITDA is inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (such as interest expense, net; income taxes; depreciation and amortization; and stock-based compensation expense) added back for Barstool and our Kansas Entertainment, LLC joint venture.
Adjusted EBITDA is inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (such as interest expense, net; income taxes; depreciation and amortization; and stock-based compensation expense) added back for Barstool (prior to our acquisition of the remaining 64% of Barstool common stock on February 17, 2023) and our Kansas Entertainment, LLC joint venture.
Our debt agreements also contain customary events of default, including cross-default provisions that require us to meet certain requirements under the PENN Master Lease and the Pinnacle Master Lease (both of which are defined in Note 12, “Leases” ), each with GLPI.
Our debt agreements also contain customary events of default, including cross-default provisions that require us to meet certain requirements under the AR PENN Master Lease, the 2023 Master Lease, PENN Master Lease (prior to January 1, 2023), and the Pinnacle Master Lease (all of which are defined in Note 12, “Leases” in the notes to our Consolidated Financial Statements ), each with GLPI.
As of December 31, 2022, we are required to make total annual minimum rent payments of $882.0 million, of which $863.6 million relates to our Triple Net Leases. Additionally, our Triple Net Leases are subject to annual escalators, percentage rent, and rent resets, as applicable.
As of December 31, 2023 , we are required to make total annual minimum rent payments of $962.7 million , of which $943.6 million relates to our Triple Net Leases. Additionally, our Triple Net Leases are subject to annual escalators and periodic percentage rent resets, as applicable.
The Master Development Agreement provides that GLPI will fund, upon PENN’s request, up to $225 million for the Aurora Project and up to $350 million in the aggregate for the Other Development Projects, in accordance with certain terms and conditions set forth in the Master Development Agreement. These funding obligations of GLPI expire on January 1, 2026.
The Master Development Agreement provides that GLPI will fund up to $225.0 million for the Aurora Project and, upon PENN’s request, up to $350.0 million in the aggregate for the Other Development Projects, in accordance with certain terms and conditions set forth in the Master Development Agreement.
For the year ended December 31, (dollars in millions) 2022 2021 2020 Revenues: Northeast segment $ 2,695.9 $ 2,552.4 $ 1,639.3 South segment 1,314.2 1,322.2 849.6 West segment 581.9 521.4 302.5 Midwest segment 1,159.6 1,102.7 681.4 Interactive segment 663.1 432.9 121.1 Other (1) 21.3 10.6 3.9 Intersegment eliminations (2) (34.3) (37.2) (19.1) Total $ 6,401.7 $ 5,905.0 $ 3,578.7 Net income (loss) $ 221.7 $ 420.5 $ (669.1) Adjusted EBITDAR: Northeast segment $ 842.5 $ 848.4 $ 478.9 South segment 548.1 587.0 318.9 West segment 220.1 195.0 82.2 Midwest segment 501.2 500.1 258.3 Interactive segment (74.9) (35.4) 37.2 Other (1) (97.6) (100.7) (80.7) Total (3) 1,939.4 1,994.4 1,094.8 Rent expense associated with triple net operating leases (4) (149.6) (454.4) (419.8) Adjusted EBITDA $ 1,789.8 $ 1,540.0 $ 675.0 Net income (loss) margin 3.5 % 7.1 % (18.7) % Adjusted EBITDAR margin 30.3 % 33.8 % 30.6 % Adjusted EBITDA margin 28.0 % 26.1 % 18.9 % (1) The Other category consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club, Sam Houston and Valley Race Parks (the remaining 50% was acquired by PENN on August 1, 2021), the Company’s joint venture interests in Freehold Raceway; and our management contract for Retama Park Racetrack.
For the year ended December 31, (dollars in millions) 2023 2022 2021 Revenues: Northeast segment $ 2,738.4 $ 2,695.9 $ 2,552.4 South segment 1,216.4 1,314.2 1,322.2 West segment 528.5 581.9 521.4 Midwest segment 1,172.6 1,159.6 1,102.7 Interactive segment 718.8 663.1 432.9 Other (1) 20.2 21.3 10.6 Intersegment eliminations (2) (32.0) (34.3) (37.2) Total $ 6,362.9 $ 6,401.7 $ 5,905.0 Net income (loss) $ (491.4) $ 221.7 $ 420.5 Adjusted EBITDAR: Northeast segment $ 831.0 $ 842.5 $ 848.4 South segment 494.1 548.1 587.0 West segment 204.2 220.1 195.0 Midwest segment 496.6 501.2 500.1 Interactive segment (402.5) (74.9) (35.4) Other (1) (110.8) (97.6) (100.7) Total (3) 1,512.6 1,939.4 1,994.4 Rent expense associated with triple net operating leases (4) (591.1) (149.6) (454.4) Adjusted EBITDA $ 921.5 $ 1,789.8 $ 1,540.0 Net income (loss) margin (7.7) % 3.5 % 7.1 % Adjusted EBITDAR margin 23.8 % 30.3 % 33.8 % Adjusted EBITDA margin 14.5 % 28.0 % 26.1 % (1) The Other category consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club, Sam Houston and Valley Race Parks (the remaining 50% was acquired by PENN on August 1, 2021), the Company’s joint venture interests in Freehold Raceway; and our management contract for Retama Park Racetrack.
Investing Cash Flow Cash used in investing activities for the year ended December 31, 2022 of $258.6 million is primarily due to capital expenditures of $263.4 million and the acquisition of a $15.0 million cost method investment, offset by insurance proceeds received for losses incurred due to Hurricane Laura in 2020 .
For the year ended December 31, 2022, cash used in investing activities was primarily related to capital expenditures and the acquisition of a cost method investment, offset by insurance proceeds received for losses incurred due to Hurricane Laura in 2020 .
As such, the value of the gaming license is a function of the following assumptions: • Projected revenues and operating cash flows (including an allocation of the projected payments under any applicable Triple Net Lease); • Estimated construction costs and duration; • Pre-opening expenses; and • Discounting that reflects the level of risk associated with receiving future cash flows attributable to the license. 52 Table of Contents We assess the fair value of our trademarks using the relief-from-royalty method under the income approach.
As such, the value of the gaming license is a function of the following assumptions: • Projected revenues and operating cash flows (including an allocation of the projected payments under any applicable Triple Net Lease); • Estimated construction costs and duration; • Pre-opening expenses; and • Discounting that reflects the level of risk associated with receiving future cash flows attributable to the license.
Other Contractual Cash Obligations The following table presents our other contractual cash obligations as of December 31, 2022: Payments Due by Period (in millions) Total 2023 2024-2025 2026-2027 2028 and After Purchase obligations $ 405.6 $ 126.2 $ 91.1 $ 73.7 $ 114.6 Other liabilities reflected within our Consolidated Balance Sheets (1) 8.3 0.3 0.6 0.6 6.8 Total $ 413.9 $ 126.5 $ 91.7 $ 74.3 $ 121.4 (1) Excludes the liability for unrecognized tax benefits of $46.0 million, as we cannot reasonably estimate the period of cash settlement with the respective taxing authorities.
Other Contractual Cash Obligations The following table presents our other contractual cash obligations as of December 31, 2023: Payments Due by Period (in millions) Total 2024 2025-2026 2027-2028 2029 and after Purchase obligations $ 790.7 $ 339.4 $ 322.5 $ 55.6 $ 73.2 Other liabilities reflected within our Consolidated Balance Sheets (1) 8.0 0.3 0.6 0.6 6.5 Total $ 798.7 $ 339.7 $ 323.1 $ 56.2 $ 79.7 (1) Excludes the liability for unrecognized tax benefits of $47.2 million, as we cannot reasonably estimate the period of cash settlement with the respective taxing authorities.
Cash provided by operating activities, as well as cash available under our Amended Revolving Credit Facility and Revolving Facility, was available to fund our capital expenditures for the years ended December 31, 2022, 2021 and 2020, as applicable.
Cash provided by operating activities, as well as cash available under our Amended Revolving Credit Facility and Revolving Facility, was available to fund our capital expenditures for the years ended December 31, 2023, 2022, and 2021, as applicable. Capital expenditures for the year ended December 31, 2023 and 2022 were $360.0 million and $263.4 million, respectively.
Goodwill and other intangible assets As of December 31, 2022, the Company had $2.7 billion in goodwill and $1.7 billion in other intangible assets within its Consolidated Balance Sheet, represen ting 15.4% and 9.9% of total assets, respectively.
Goodwill and other intangible assets As of December 31, 2023, the Company had $2.7 billion in goodwill and $1.6 billion in other intangible assets within its Consolidated Balance Sheet, represen ting 16.8% and 10.1% of total assets, respectively.
At December 31, 2022, we had $2.8 billion in aggregate principal amount of indebtedness, including $1.5 billion outstanding under our Amended Credit Facilities, $330.5 million outstanding under our Convertible Notes, $400.0 million outstanding under our 5.625% senior unsecured notes, $400.0 million outstanding under our 4.125% Notes, and $156.1 million outstanding in other long-term obligations.
At December 31, 2023, we had $2.8 billion in aggregate principal amount of indebtedness, including $1.5 billion outstanding under our Amended Credit Facilities, $330.5 million outstanding under our 2.75% unsecured convertible notes due 2026 (the “Convertible Notes”), $400.0 million outstanding under our 5.625% senior unsecured notes due 2027 (the “5.625% Notes”), $400.0 million outstanding under our 4.125% senior unsecured notes due 2029 (the “4.125% Notes”), and $173.5 million outstanding in other long-term obligations.
Our effective income tax rate can vary each reporting period depending on, among other factors, the geographic and business mix of our earnings, changes to our valuation allowance, and the level of our tax credits.
See Note 14, “Income Taxes” to our Consolidated Financial Statements for further discussion. Our effective income tax rate can vary each reporting period depending on, among other factors, the geographic and business mix of our earnings, changes to our valuation allowance, and the level of our tax credits.
In addition, the acquisitions of Barstool and theScore reflect our strategy to continue evolving from the nation’s largest regional gaming operator to a best-in-class omni-channel provider of retail and online gaming and sports betting entertainment. Operating and Competitive Environment Most of our properties operate in mature, competitive markets.
(“theScore”) and our Sportsbook Agreement with ESPN reflects 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. Operating and Competitive Environment Most of our properties operate in mature, competitive markets.
Financing Cash Flow For the year ended December 31, 2022, net cash used in financing activities totaled $853.0 million compared to $339.9 million in net cash provided by financing activities in the prior year.
Financing Cash Flow For the year ended December 31, 2023, net cash used in financing activities totaled $262.6 million compared to $853.0 million in net cash used in financing activities in the prior year.
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 December 31, 2022, the Company was in compliance with all required financial covenants.
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.
We refer to the PENN Master Lease, the Pinnacle Master Lease, the Perryville Lease, the Meadows Lease, the Margaritaville Lease, the Greektown Lease, and the Morgantown Lease, each of which is defined in Note 12, “Leases” to our Consolidated Financial Statements, collectively, as our “Triple Net Leases.” 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.
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.
Our effective tax rate (income taxes as a percentage of income from operations before income taxes) was (26.5)% for the year ended December 31, 2022, as compared to 22.0% for the year ended December 31, 2021.
Our effective tax rate (income taxes as a percentage of income from operations before income taxes) was 1.7% for the year ended December 31, 2023, as compared to (26.5)% for the ye ar ended 40 Table of Contents December 31, 2022.
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 PENN Master Lease and the Pinnacle Master Lease (as such terms are defined in “Liquidity and Capital Resources” and collectively referred to as the “Master Leases”), with Gaming and Leisure Properties, Inc.
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.
Interest income increased for the year ended December 31, 2022, as compared to the prior year, primarily due to executing on our short term investing strategy utilizing money market funds which commenced during the year ended December 31, 2022. Income from unconsolidated affiliates relates principally to Barstool, and our Kansas Entertainment and Freehold Raceway joint ventures.
Interest income increased for the year ended December 31, 2023, as compared to the prior year, primarily due to executing on our short term investing strategy utilizing money market funds which commenced during the year ended December 31, 2022.
Also included in gaming expenses are non- 39 Table of Contents recurring transaction costs of $26.0 million for the year ended December 31, 2022 , related to third-party contract termination fees as we execute on our strategy to deploy our internally built technology stack, consisting of a player account management system and proprietary risk and trading platform, specific to the Interactive segment.
Also included in gaming expenses are certain non-recurring transaction costs of $16.8 million and $26.0 million for the years ended December 31, 2023 and 2022, respectively , related to third-party contract termination fees as we executed on our strategy to deploy our internally built technology stack, consisting of a player account management system and proprietary risk and trading platform, specific to the Interactive segment. 38 Table of Contents Food, beverage, hotel, and other expenses consist primarily of payroll costs, costs of goods sold, and other costs associated with our food, beverage, hotel, retail, racing, and interactive operations.
We expect that the majority of our future growth will come from new business lines or distribution channels, such as retail and online gaming and sports betting; improvements, expansions or relocations of our existing properties; entrance into new jurisdictions; expansions of gaming in existing jurisdictions; and strategic investments and acquisitions.
We expect the majority of our future growth to come from our online sports betting and iCasino businesses; improvements, expansions, or relocations of our existing properties; entrance into new jurisdictions; expansions of gaming in existing jurisdictions; and strategic investments and acquisitions; and cross-sell opportunities between our retail gaming, online sports betting, and iCasino businesses.
See Note 11, “Long-term Debt,” in the notes to our Consolidated Financial Statements for additional information of the Company ’ s debt and other long-term obligations. Share Repurchase Authorizations On February 1, 2022, the Board of Directors of PENN authorized a $750 million share repurchase program, which expires on January 31, 2025 (the “February 2022 Authorization”).
See Note 11, “Long-term Debt” in the notes to our Consolidated Financial Statements for additional information of the Company ’ s debt and other long-term obligations. Share Repurchase Authorizations During the second quarter of 2023, we completed our $750 million share repurchase authorization approved by the Board of Directors on February 1, 2022 (the “February 2022 Authorization”).
The 2023 Master Lease Rent will be subject to a one-time increase of $1.4 million, effective the fifth anniversary of the effective date. The 2023 Master Lease Rent will be further subject to a fixed escalator of 1.5% on November 1, 2023 and annually thereafter.
These funding obligations of GLPI expire on January 1, 2026. The 2023 Master Lease Rent will be subject to a one-time increase of $1.4 million, effective November 1, 2027. The 2023 Master Lease Rent was subject to a fixed escalator of 1.5% on November 1, 2023 and will be annually thereafter.
The following table presents our consolidated other income (expenses): For the year ended December 31, $ Change % Change (dollars in millions) 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 2022 vs. 2021 2021 vs. 2020 Other income (expenses) Interest expense, net $ (758.2) $ (562.8) $ (544.1) $ (195.4) $ (18.7) 34.7 % 3.4 % Interest income $ 18.3 $ 1.1 $ 0.9 $ 17.2 $ 0.2 1,563.6 % 22.2 % Income from unconsolidated affiliates $ 23.7 $ 38.7 $ 13.8 $ (15.0) $ 24.9 (38.8) % 180.4 % Loss on early extinguishment of debt $ (10.4) $ — $ (1.2) $ (10.4) $ 1.2 N/M N/M Other $ (72.1) $ 2.5 $ 106.6 $ (74.6) $ (104.1) N/M (97.7) % Income tax benefit (expense) $ 46.4 $ (118.6) $ 165.1 $ 165.0 $ (283.7) N/M N/M N/M - Not meaningful 40 Table of Contents Interest expense, net increased for the year ended December 31, 2022, as compared to the prior year, primarily due to a $171.3 million net increase in Master Lease interest costs due to changes in lease classifications as a result of the Lease Modification as described in Note 12, “Leases” to our Consolidated Financial Statements.
The following table presents our consolidated other income (expenses): For the year ended December 31, $ Change % Change (dollars in millions) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 2023 vs. 2022 2022 vs. 2021 Other income (expenses) Interest expense, net $ (464.7) $ (758.2) $ (562.8) $ 293.5 $ (195.4) (38.7) % 34.7 % Interest income $ 40.3 $ 18.3 $ 1.1 $ 22.0 $ 17.2 120.2 % 1,563.6 % Income from unconsolidated affiliates $ 25.3 $ 23.7 $ 38.7 $ 1.6 $ (15.0) 6.8 % (38.8) % Gain on Barstool Acquisition, net $ 83.4 $ — $ — $ 83.4 $ — N/M N/M Gain on REIT transactions, net $ 500.8 $ — $ — $ 500.8 $ — N/M N/M Loss on early extinguishment of debt $ — $ (10.4) $ — $ 10.4 $ (10.4) N/M N/M Other $ 5.5 $ (72.1) $ 2.5 $ 77.6 $ (74.6) N/M N/M Income tax benefit (expense) $ 8.2 $ 46.4 $ (118.6) $ (38.2) $ 165.0 (82.3) % N/M N/M - Not meaningful Interest expense, net decreased for the year ended December 31, 2023, as compared to the prior year, primarily due to a net decrease in Master Lease interest costs of $348.2 million due to changes in lease classifications as a result of the amendment of the PENN Master Lease, as described in Note 12, “Leases” to our Consolidated Financial Statements, partially offset by an increase in interest expense on our Senior Secured Credit Facilities related to an overall increase in interest rates.
Operating expenses The following table presents our consolidated operating expenses: For the year ended December 31, $ Change % Change (dollars in millions) 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 2022 vs. 2021 2021 vs. 2020 Operating expenses Gaming $ 2,864.4 $ 2,540.7 $ 1,530.3 $ 323.7 $ 1,010.4 12.7 % 66.0 % Food, beverage, hotel and other 767.2 607.3 337.7 159.9 269.6 26.3 % 79.8 % General and administrative 1,110.4 1,352.9 1,130.8 (242.5) 222.1 (17.9) % 19.6 % Depreciation and amortization 567.5 344.5 366.7 223.0 (22.2) 64.7 % (6.1) % Impairment losses 118.2 — 623.4 118.2 (623.4) N/M N/M Total operating expenses $ 5,427.7 $ 4,845.4 $ 3,988.9 $ 582.3 $ 856.5 12.0 % 21.5 % N/M - Not meaningful Gaming expenses consist primarily of salaries and wages associated with our gaming operations, gaming taxes, and marketing and promotional costs.
Operating expenses The following table presents our consolidated operating expenses: For the year ended December 31, $ Change % Change (dollars in millions) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 2023 vs. 2022 2022 vs. 2021 Operating expenses Gaming $ 2,989.4 $ 2,864.4 $ 2,540.7 $ 125.0 $ 323.7 4.4 % 12.7 % Food, beverage, hotel and other 1,011.4 767.2 607.3 244.2 159.9 31.8 % 26.3 % General and administrative 1,563.4 1,110.4 1,352.9 453.0 (242.5) 40.8 % (17.9) % Depreciation and amortization 435.1 567.5 344.5 (132.4) 223.0 (23.3) % 64.7 % Impairment losses 130.6 118.2 — 12.4 118.2 10.5 % N/M Loss on disposal of Barstool 923.2 — — 923.2 — N/M N/M Total operating expenses $ 7,053.1 $ 5,427.7 $ 4,845.4 $ 1,625.4 $ 582.3 29.9 % 12.0 % N/M - Not meaningful Gaming expenses consist primarily of gaming taxes, payroll, marketing and promotional, and other expenses associated with our gaming operations.
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.
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. We continuously adjust operations, offerings, and cost structures to reflect changing economic conditions, as well as consumer demand and behaviors.
The 2023 Master Lease includes a 2023 Master Lease Base Rent (the “2023 Master Lease Base Rent”) equal to $232.2 million and the Master Development Agreement contains additional rent (together with the 2023 Master Lease Base Rent, the “2023 Master Lease Rent”) equal to (i) 7.75% of any project funding received by PENN from GLPI for an anticipated relocation of PENN’s riverboat casino and related developments with respect to Aurora (the “Aurora Project”) and (ii) a percentage based on the then-current GLPI stock price, of any project funding received by PENN from GLPI for certain anticipated development projects with respect to Joliet, Columbus, and M Resort (the “Other Development Projects”).
The 2023 Master Lease includes the 2023 Master Lease Base Rent equal to $232.2 million and the Master Development Agreement contains additional rent equal to (i) 7.75% of any project funding received by PENN from GLPI for the Aurora Project and (ii) a percentage, based on the then-current GLPI stock price, of any project funding received by PENN from GLPI for the Other Development Projects.
The principle behind this method is that the value of the trademark is equal to the present value of the after-tax royalty savings attributable to the owned trademark.
We assess the fair value of our trademarks using the relief-from-royalty method under the income approach. The principle behind this method is that the value of the trademark is equal to the present value of the after-tax royalty savings attributable to the owned trademark.
The Other category also includes corporate overhead costs, which consist of certain expenses, such as: payroll expenses, professional fees, travel expenses and other general and administrative expenses that do not directly relate to or have not otherwise been allocated to a property.
The Other category also includes corporate overhead costs, which consist of certain expenses, such as: payroll, professional fees, travel expenses and other general and administrative expenses that do not directly relate or have not otherwise been allocated. Corporate overhead costs $106.7 million, $98.5 million, and $103.3 million for the years ended December 31, 2023, 2022, and 2021, respectively.
The Company’s portfolio is further bolstered by its industry-leading my choice ® customer loyalty program (the “my choice program”), which offers our approximately 26 million members a unique set of rewards and experiences across business channels.
PENN’s portfolio is further bolstered by our industry-leading PENN Play TM customer loyalty program, which offers our over 29 million members a unique set of rewards and experiences across business channels.
Pursuant to the Term Sheet, the Company and GLPI agreed to amend and restate the PENN Master Lease (the “Amended and Restated PENN Master Lease”) to (i) remove the land and buildings for Aurora, Joliet, Columbus, Toledo and the M Resort; (ii) make associated adjustments to the rent after which the initial rent in the Amended and Restated PENN Master Lease will be $284.1 million, consisting of $208.2 million of Building Base Rent, $43.0 million of Land Base Rent and $32.9 million of Percentage Rent (as such terms are defined in the Amended and Restated PENN Master Lease); (iii) terminate the existing leases associated with Meadows and Perryville; and (iv) enter into the 2023 Master Lease specific to the properties associated with Aurora, Joliet, Columbus, Toledo, M Resort, Meadows and Perryville.
On February 21, 2023, the Company and GLPI entered into an agreement to amend and restate the PENN Master Lease, effective January 1, 2023, to (i) remove the land and buildings for Aurora, Joliet, Columbus, Toledo and the M Resort, and (ii) make associated adjustments to the rent after which the initial rent in the AR PENN Master Lease was reset to $284.1 million, consisting of $208.2 million of building base rent, $43.0 million of land base rent and $32.9 million of percentage rent (as such terms are defined in the AR PENN Master Lease).
Discussion of our financial condition and results of operations as of and for the year ended December 31, 2021 compared to December 31, 2020 can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 , filed with the Securities and Exchange Commission on February 28, 2022. 33 Table of Contents EXECUTIVE OVERVIEW Our Business On August 4, 2022, Penn National Gaming, Inc. was renamed PENN Entertainment, Inc.
Discussion of our financial condition and results of operations as of and for the year ended December 31, 2022 compared to December 31, 2021 can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 , filed with the Securities and Exchange Commission on February 23, 2023. 33 Table of Contents EXECUTIVE OVERVIEW Our Business PENN Entertainment, Inc., together with its subsidiaries (“PENN,” the “Company,” “we,” “our,” or “us”), is North America’s leading provider of integrated entertainment, sports content, and casino gaming experiences.
Midwest Segment For the year ended December 31, $ Change % / bps Change (dollars in millions) 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 2022 vs. 2021 2021 vs. 2020 Revenues: Gaming $ 1,045.9 $ 1,009.6 $ 615.2 $ 36.3 $ 394.4 3.6 % 64.1 % Food, beverage, hotel and other 113.7 93.1 66.2 20.6 26.9 22.1 % 40.6 % Total revenues $ 1,159.6 $ 1,102.7 $ 681.4 $ 56.9 $ 421.3 5.2 % 61.8 % Adjusted EBITDAR $ 501.2 $ 500.1 $ 258.3 $ 1.1 $ 241.8 0.2 % 93.6 % Adjusted EBITDAR margin 43.2 % 45.4 % 37.9 % (220) bps 750 bps The Midwest segment’s revenues for the year ended December 31, 2022 increased by $56.9 million over the prior year, primarily due to increased length of play and increased spend per guest resulting in increased gaming and non-gaming revenues.
Midwest Segment For the year ended December 31, $ Change % / bps Change (dollars in millions) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 2023 vs. 2022 2022 vs. 2021 Revenues: Gaming $ 1,046.5 $ 1,045.9 $ 1,009.6 $ 0.6 $ 36.3 0.1 % 3.6 % Food, beverage, hotel, and other 126.1 113.7 93.1 12.4 20.6 10.9 % 22.1 % Total revenues $ 1,172.6 $ 1,159.6 $ 1,102.7 $ 13.0 $ 56.9 1.1 % 5.2 % Adjusted EBITDAR $ 496.6 $ 501.2 $ 500.1 $ (4.6) $ 1.1 (0.9) % 0.2 % Adjusted EBITDAR margin 42.4 % 43.2 % 45.4 % (80) bps (220) bps The Midwest segment’s revenues for the year ended December 31, 2023 increased by $13.0 million over the prior year, primarily due to increased visitation at our hotels and food and beverage outlets.
During the year ended December 31, 2022, the Company repurchased 17,561,288 shares of its common stock in open market transactions for $601.1 million at an average price of $34.23 per share under the February 2022 Authorization. The cost of all repurchased shares is recorded as “Treasury stock” in the Consolidated Balance Sheets.
During the years ended December 31, 2023 and 2022, respectively, the Company repurchased 5,438,221 and 17,561,288 shares of its common stock in open market transactions for $149.8 million and $601.1 million at an average price of $27.54 and $34.23 per share under the February 2022 and December 2022 Authorizations.
The 2023 Master Lease has an initial term through October 31, 2033 with three subsequent five-year renewal periods on the same terms and conditions, exercisable at the Company’s option. The 2023 Master Lease is cross-defaulted, cross-collateralized, and coterminous with the Amended and Restated PENN Master Lease, and subject to a parent guarantee.
The 2023 Master Lease has an initial term through October 31, 2033 with three subsequent five-year renewal periods on the same terms and conditions, exercisable at the Company’s option. The 2023 Master Lease terminated the individual triple net leases associated with Meadows and Perryville.
Each of these non-GAAP financial measures is not calculated in the same manner by all companies and, accordingly, may not be an appropriate measure of comparing performance among different companies. 44 Table of Contents We define 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; and other.
We define 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 43 Table of Contents 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 as described in Note 12, “Leases” to our Consolidated Financial Statements; non-cash gains/losses associated with partial and step acquisitions as measured in accordance with ASC 805 “Business Combinations”; and other.
The prior year benefited from increased gaming revenues and reduced labor costs yielding a higher overall Adjusted EBITDAR margin. 42 Table of Contents West Segment For the year ended December 31, $ Change % / bps Change (dollars in millions) 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 2022 vs. 2021 2021 vs. 2020 Revenues: Gaming $ 387.6 $ 352.7 $ 194.2 $ 34.9 $ 158.5 9.9 % 81.6 % Food, beverage, hotel and other 194.3 168.7 108.3 25.6 60.4 15.2 % 55.8 % Total revenues $ 581.9 $ 521.4 $ 302.5 $ 60.5 $ 218.9 11.6 % 72.4 % Adjusted EBITDAR $ 220.1 $ 195.0 $ 82.2 $ 25.1 $ 112.8 12.9 % 137.2 % Adjusted EBITDAR margin 37.8 % 37.4 % 27.2 % 40 bps 1,020 bps The West segment’s revenues for the year ended December 31, 2022 increased by $60.5 million over the prior year, primarily due to increased spend per guest on gaming and increased visitation at our food and beverage outlets, partially offset by the sale of our Tropicana Las Vegas property on September 26, 2022.
West Segment For the year ended December 31, $ Change % / bps Change (dollars in millions) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 2023 vs. 2022 2022 vs. 2021 Revenues: Gaming $ 376.5 $ 387.6 $ 352.7 $ (11.1) $ 34.9 (2.9) % 9.9 % Food, beverage, hotel, and other 152.0 194.3 168.7 (42.3) 25.6 (21.8) % 15.2 % Total revenues $ 528.5 $ 581.9 $ 521.4 $ (53.4) $ 60.5 (9.2) % 11.6 % Adjusted EBITDAR $ 204.2 $ 220.1 $ 195.0 $ (15.9) $ 25.1 (7.2) % 12.9 % Adjusted EBITDAR margin 38.6 % 37.8 % 37.4 % 80 bps 40 bps The West segment’s revenues for the year ended December 31, 2023 decreased by $53.4 million over the prior year, primarily due to the sale of the Tropicana operations in September 2022 and a decrease in gaming revenues at Ameristar Black Hawk, partially offset by an increase in revenues at Zia Park Casino.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFor the year ended December 31, 2022, we incurred an unrealized foreign currency translation adjustment loss of $114.2 million, as reported in “Foreign currency translation adjustment during the period” within our Consolidated Statements of Comprehensive Income (Loss). 55 Table of Contents
Biggest changeFor the year ended December 31, 2023, we incurred an unrealized foreign currency translation adjustment gain of $44.1 million, as compared to unrealized foreign currency translation losses of $114.2 million and $54.4 million for the years ended December 31, 2022, and 2021, respectively, as reported in “Foreign currency translation adjustment during the period” within our Consolidated Statements of Comprehensive Income (Loss). 54 Table of Contents
As a result, changes between the foreign exchange rates, in particular the Canadian dollar compared to the U.S. dollar, affect the amounts we record for our foreign assets, liabilities, revenues and expenses, and could have a negative effect on our financial results.
As a result, changes between the 53 Table of Contents foreign exchange rates, in particular the Canadian dollar compared to the U.S. dollar, affect the amounts we record for our foreign assets, liabilities, revenues and expenses, and could have a negative effect on our financial results.
As of December 31, 2022, we have $977.5 million of available borrowing capacity under our Amended Revolving Credit Facility. 54 Table of Contents The table below provides information as of December 31, 2022 about our long-term debt obligations that are sensitive to changes in interest rates, including the notional amounts maturing during the twelve-month period presented and the related weighted-average interest rates by maturity dates.
The table below provides information as of December 31, 2023 about our long-term debt obligations that are sensitive to changes in interest rates, including the notional amounts maturing during the twelve-month period presented and the related weighted-average interest rates by maturity dates.
(dollars in millions) 2023 2024 2025 2026 2027 Thereafter Total Fair Value Fixed rate $ — $ — $ — $ — $ 400.0 $ — $ 400.0 $ 371.0 Average interest rate 5.625 % Fixed rate $ — $ — $ — $ — $ — $ 400.0 $ 400.0 $ 327.0 Average interest rate 4.125 % Fixed rate $ — $ — $ — $ 330.5 $ — $ — $ 330.5 $ 550.8 Average interest rate 2.750 % Variable rate $ 37.5 $ 37.5 $ 37.5 $ 37.5 $ 436.2 $ 945.0 $ 1,531.2 $ 1,514.7 Average interest rate (1) 5.142 % 5.154 % 5.162 % 5.171 % 4.902 % 6.045 % (1) Estimated rate, reflective of forward SOFR as of December 31, 2022 plus the spread over SOFR applicable to variable-rate borrowing.
(dollars in millions) 2024 2025 2026 2027 2028 Thereafter Total Fair Value Fixed rate $ — $ — $ — $ 400.0 $ — $ — $ 400.0 $ 388.0 Average interest rate 5.625 % Fixed rate $ — $ — $ — $ — $ — $ 400.0 $ 400.0 $ 340.0 Average interest rate 4.125 % Fixed rate $ — $ — $ 330.5 $ — $ — $ — $ 330.5 $ 427.6 Average interest rate 2.750 % Variable rate $ 37.5 $ 37.5 $ 37.5 $ 436.3 $ 10.0 $ 935.0 $ 1,493.8 $ 1,483.5 Average interest rate (1) 5.639 % 5.679 % 5.709 % 5.633 % 6.076 % 6.076 % (1) Estimated rate, reflective of forward SOFR as of December 31, 2023 plus the spread over SOFR applicable to variable-rate borrowing.
As of December 31, 2022, the Company’s Amended Credit Facilities had a gross outstanding balance of $1.5 billion, consisting of a $536.2 million Amended Term Loan A Facility and a $995.0 million Amended Term Loan B Facility, and an Amended Revolving Credit Facility.
As of December 31, 2023, the Company’s Amended Credit Facilities had a gross outstanding balance of $1.5 billion, consisting of a $508.8 million Amended Term Loan A Facility and a $985.0 million Amended Term Loan B Facility. As of December 31, 2023, we have $978.3 million of available borrowing capacity under our Amended Revolving Credit Facility.

Other PENN 10-K year-over-year comparisons