PENN Entertainment (PENN) risk factors, FY2024 10-K

Risks Related to Our Business, Industry, and Market Conditions

1. 01Our business is sensitive to reductions in discretionary consumer spending, which may be adversely impacted by downturns in the economy and other factors outside of our control
2. 02Intense competition exists in the gaming, media, and entertainment industries, and we expect competition to continue to intensify
3. 03Our results of operations may fluctuate due to seasonality and other factors, which could make our future operating results difficult to predict
4. 04Shareholder activists could cause a disruption to our business

Risks Related to our Operations

1. 05We 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
2. 06A significant portion of our cash flow from operations is used to make interest payments and rent payments under our debt and lease agreements
3. 07We may require additional capital to support our growth plans, and such capital may not be available on terms acceptable to us, if at all
4. 08We are subject to risks associated with leased property, as most of our facilities are leased
5. 09Our operations in several jurisdictions depend on management agreements and/or leases with third parties and local governments that may not be renewed or the terms of a renewal may require significant fees or capital expenditure commitments
6. 10There 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 the launch of ESPN BET
7. 11We are subject to risks and costs related to climate change regulations and greenhouse gas effects
8. 12Investors’ and other stakeholders’ expectations of our performance relating to environmental, social, and governance factors may impose additional costs and expose us to new risks
9. 13The success and competitive position of our retail operations, sports betting and iCasino operations, and media businesses are largely dependent upon, among other things, the efforts and skills of our senior executives and management team, and our ability to attract and retain talented team members
10. 14employees to work from home or in other remote work arrangements has impacted, and may continue to impact, our ability to attract and retain talented personnel
11. 15We face risks related to collective bargaining activity and strikes
12. 16We face the risk of fraud, theft, and cheating
13. 17Our commercial success depends upon our ability to develop new or improved technologies and products, and to successfully obtain or acquire proprietary or statutory protection for our intellectual property rights
14. 18Our commercial success depends upon us avoiding the infringement of intellectual property rights owned by others
15. 19Our technology contains third-party open source software components
16. 20our competitive advantages. Alternatively, to avoid the public release of the affected portions of our source code, we could be required to expend substantial time and resources to re-engineer some or all of our software or remove such copyleft software
17. 21We 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
18. 22We 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
19. 23If any of our properties are damaged or there is a prolonged disruption at any of our properties due to natural disasters or other extreme weather events, our business, financial condition, and results of operations could be materially adversely affected
20. 24We 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
21. 25Our growth and success depend, in part, on the success of our strategic relationships with third parties
22. 26We are reliant on our partnership with ESPN, and our failure to maintain that relationship could negatively impact our business, reputation and strategic goals
23. 27The growth of our Interactive segment will depend on our ability to attract and retain users, which may require investments in our online offerings, technology, and strategic marketing initiatives
24. 28Participation in the sports betting industry exposes us to trading, liability management, and pricing risk
25. 29We 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
26. 30The success, including win or hold rates, of existing or future retail, sports betting, and iCasino products depends on a variety of factors, including factors beyond our control
27. 31We 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

Risks Related to our Information Systems and Technology

1. 32If our third-party mobile application distribution platforms or service providers do not perform adequately or terminate their relationships with us, our costs may increase
2. 33If internet and other technology-based service providers experience service interruptions, our ability to conduct our business may be impaired
3. 34We rely on third party cloud infrastructure services to deliver our offerings to users, and we have experienced, and expect in the future to experience, service interruptions, delays, and outages
4. 35Our information technology and other systems are subject to cybersecurity risk, including misappropriation of employee information, customer information, or other breaches of information security
5. 36From time to time we may become involved in legal proceedings, and no assurance can be provided as to the outcome of these matters
6. 37We face extensive regulation from gaming regulatory authorities
7. 38We are subject to certain federal, state, provincial and other regulations
8. 39State and local smoking restrictions have and may continue to negatively affect our business
9. 40Changes to consumer privacy laws could adversely affect our ability to market our products effectively and may require us to change our business practices or expend significant amounts on compliance with such laws
10. 41We are subject to environmental laws and potential exposure to environmental liabilities
11. 42We may experience material increases to our taxes or the adoption of new taxes or the authorization of new or increased forms of gaming