PENN Entertainment, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of PENN Entertainment, Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of PENN Entertainment, Inc. and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, of comprehensive loss, of changes in stockholders’ equity and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 57 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Interim Goodwill Impairment Test - Interactive Reporting Unit As described in Notes 2 and 8 to the consolidated financial statements, the Company’s goodwill balance was $1,786.6 million as of December 31, 2025, and the goodwill associated with the Interactive reporting unit was $774.8 million. Goodwill is tested for impairment annually on October 1 of each year, or more frequently if indicators of impairment exist. Management compares the fair value of its reporting units to the carrying amounts. If the carrying amount of the reporting unit exceeds the fair value, an impairment is recorded. As disclosed by management, during the third quarter of 2025, management identified an indicator of impairment on goodwill and performed an interim quantitative impairment test for the Interactive reporting unit, which resulted in a non-cash impairment charge of $825.0 million. For the quantitative goodwill impairment test, an income approach, in which a discounted cash flow model and a market-based approach using guideline public company multiples from the Company’s peer group were utilized in order to estimate the fair market value of the Company’s Interactive reporting unit. Significant assumptions utilized in the estimation of future cash flows for the Interactive reporting unit include forecasted revenues, the discount rate, and the terminal year earnings before interest, taxes, depreciation, and amortization (EBITDA) exit multiple. The principal considerations for our determination that performing procedures relating to the interim goodwill impairment test of the Interactive reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the Interactive reporting unit; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to forecasted revenues, discount rate and terminal year EBITDA exit multiple used in the discounted cash flow model; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment test, including controls over the valuation of the Interactive reporting unit. These procedures also included, among others, (i) testing management’s process for developing the fair value estimates of the Interactive reporting unit; (ii) evaluating the appropriateness of the discounted cash flow model used by management; (iii) testing the completeness and accuracy of the underlying data used in the discounted cash flow model; and (iv) evaluating the reasonableness of the significant assumptions used by management related to forecasted revenues, discount rate, and terminal year EBITDA exit multiple. Evaluating management’s assumption related to forecasted revenues involved evaluating whether the assumption used by management was reasonable considering (i) the current and past performance of the Interactive reporting unit; (ii) the consistency with external market and industry data; and (iii) whether the assumption was consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the discounted cash flow model and (ii) the reasonableness of the discount rate and terminal year EBITDA exit multiple assumptions. /s/ PricewaterhouseCoopers LLP Las Vegas, Nevada February 26, 2026 We have served as the Company’s auditor since 2024. 58 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of PENN Entertainment, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated statements of operations, comprehensive income (loss), changes in stockholders’ equity, and cash flows for the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”) of PENN Entertainment, Inc. and subsidiaries (the “Company”). In our opinion, the financial statements present fairly, in all material respects, the results of the Company’s operations and its cash flows for the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Deloitte & Touche LLP Philadelphia, Pennsylvania February 22, 2024 (February 27, 2025 as to Note 17) We began serving as the Company’s auditor in 2017. In 2024 we became the predecessor auditor. 59 Table of Contents PENN ENTERTAINMENT, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, (in millions, except share and per share data) 2025 2024 Assets Current assets Cash and cash equivalents $ 686.6 $ 706.6 Accounts receivable, net 254.2 256.8 Prepaid expenses 151.7 152.3 Other current assets 73.6 38.7 Total current assets 1,166.1 1,154.4 Property and equipment, net 3,717.3 3,705.0 Investment in and advances to unconsolidated affiliates 79.4 86.2 Goodwill 1,786.6 2,563.1 Other intangible assets, net 1,404.8 1,529.9 Operating lease right-of-use assets 3,966.1 3,976.8 Finance lease right-of-use assets 1,924.3 2,014.3 Other assets 223.9 232.0 Total assets $ 14,268.5 $ 15,261.7 Liabilities Current liabilities Accounts payable $ 54.2 $ 50.8 Current maturities of long-term debt 38.2 38.2 Current portion of financing obligations 45.8 43.5 Current portion of operating lease liabilities 386.0 322.1 Current portion of finance lease liabilities 45.7 53.2 Accrued expenses and other current liabilities 905.6 907.3 Total current liabilities 1,475.5 1,415.1 Long-term debt, net of current maturities, debt discount, and debt issuance costs 2,848.9 2,732.5 Long-term portion of financing obligations 2,297.8 2,343.1 Long-term portion of operating lease liabilities 3,592.4 3,654.3 Long-term portion of finance lease liabilities 2,017.4 2,062.3 Deferred income taxes 87.8 61.0 Other long-term liabilities 121.2 135.0 Total liabilities 12,441.0 12,403.3 Commitments and contingencies (Note 12) Stockholders’ equity Series B preferred stock ($ 0.01 par value, 1,000,000 shares authorized, no shares issued and outstanding) — — Series C preferred stock ($ 0.01 par value, 18,500 shares authorized, no shares issued and outstanding) — — Series D preferred stock ($ 0.01 par value, 5,000 shares authorized, no shares issued and outstanding) — — Common stock ($ 0.01 par value, 400,000,000 shares authorized, 177,841,991 and 177,396,073 shares issued, 132,584,258 and 152,229,171 shares outstanding) 1.8 1.8 Exchangeable shares ($ 0.01 par value, 768,441 shares authorized and issued in both periods, 379,821 and 466,534 shares outstanding) — — Treasury stock, at cost, ( 45,257,733 and 25,166,902 ) ( 1,137.2 ) ( 779.5 ) Additional paid-in capital 4,652.8 4,542.4 Accumulated deficit ( 1,490.1 ) ( 647.0 ) Accumulated other comprehensive loss ( 193.3 ) ( 255.0 ) Total PENN Entertainment, Inc. stockholders’ equity 1,834.0 2,862.7 Non-controlling interest ( 6.5 ) ( 4.3 ) Total stockholders’ equity 1,827.5 2,858.4 Total liabilities and stockholders’ equity $ 14,268.5 $ 15,261.7 See accompanying notes to the Consolidated Financial Statements. 60 Table of Contents PENN ENTERTAINMENT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the year ended December 31, (in millions, except per share data) 2025 2024 2023 Revenues Gaming $ 5,350.0 $ 5,169.5 $ 4,905.8 Food, beverage, hotel, and other 1,611.0 1,408.6 1,457.1 Total revenues 6,961.0 6,578.1 6,362.9 Operating expenses Gaming 3,446.4 3,429.0 2,989.4 Food, beverage, hotel, and other 1,162.2 985.5 1,011.4 General and administrative 1,633.8 1,568.4 1,563.4 Depreciation and amortization 446.9 433.6 435.1 Impairment losses 945.3 89.1 130.6 Loss on disposal of Barstool — — 923.2 Total operating expenses 7,634.6 6,505.6 7,053.1 Operating income (loss) ( 673.6 ) 72.5 ( 690.2 ) Other income (expenses) Interest expense, net ( 405.8 ) ( 470.5 ) ( 464.7 ) Interest income 9.7 23.6 40.3 Income from unconsolidated affiliates 37.7 28.1 25.3 Gain on Barstool Acquisition, net — — 83.4 Gain on REIT transactions, net 3.3 — 500.8 Gain on financing arrangement 215.1 — — Loss on early extinguishment of debt ( 11.8 ) ( 0.3 ) — Other 4.7 5.3 5.5 Total other income (expenses) ( 147.1 ) ( 413.8 ) 190.6 Loss before income taxes ( 820.7 ) ( 341.3 ) ( 499.6 ) Income tax benefit (expense) ( 24.6 ) 28.0 8.2 Net loss ( 845.3 ) ( 313.3 ) ( 491.4 ) Net loss attributable to non-controlling interest 2.2 1.8 1.4 Net loss attributable to PENN Entertainment, Inc. $ ( 843.1 ) $ ( 311.5 ) $ ( 490.0 ) Loss per share Basic loss per share $ ( 5.83 ) $ ( 2.05 ) $ ( 3.22 ) Diluted loss per share $ ( 5.83 ) $ ( 2.05 ) $ ( 3.22 ) Weighted-average common shares outstanding—basic 144.6 152.1 152.1 Weighted-average common shares outstanding—diluted 144.6 152.1 152.1 See accompanying notes to the Consolidated Financial Statements. 61 Table of Contents PENN ENTERTAINMENT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS For the year ended December 31, (in millions) 2025 2024 2023 Net loss $ ( 845.3 ) $ ( 313.3 ) $ ( 491.4 ) Other comprehensive income (loss), net of tax: Unrealized gain (loss) on debt securities ( 3.8 ) 5.4 3.2 Foreign currency translation adjustment during the period 65.5 ( 139.1 ) 44.1 Other comprehensive income (loss) 61.7 ( 133.7 ) 47.3 Total comprehensive loss ( 783.6 ) ( 447.0 ) ( 444.1 ) Comprehensive loss attributable to non-controlling interest 2.2 1.8 1.4 Comprehensive loss attributable to PENN Entertainment, Inc. $ ( 781.4 ) $ ( 445.2 ) $ ( 442.7 ) See accompanying notes to the Consolidated Financial Statements. 62 Table of Contents PENN ENTERTAINMENT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY Preferred Stock Common Stock Treasury Stock Additional Paid-In Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income (Loss) Total PENN Stock-holders’ Equity Non-Controlling Interest Total Stock-holders’ Equity (in millions, except share data) Shares Amount PENN Entertainment, Inc. Shares Amount Exchangeable Shares Amount Balance as of January 1, 2023 581 $ 19.4 152,903,708 $ 1.7 620,019 $ — $ ( 629.5 ) $ 4,220.2 $ 154.5 $ ( 168.6 ) $ 3,597.7 $ ( 1.1 ) $ 3,596.6 Share-based compensation arrangements — — 997,137 — — — — 85.9 — — 85.9 — 85.9 Share issuance in connection with acquisitions — — 2,442,809 — — — — 80.8 — — 80.8 — 80.8 Share repurchases — — ( 5,438,221 ) — — — ( 149.8 ) — — — ( 149.8 ) — ( 149.8 ) Preferred stock conversions ( 581 ) ( 19.4 ) 580,600 — — — — 19.4 — — — — — Common stock issuance — — 4,055 — — — — 0.1 — — 0.1 — 0.1 Exchangeable share issuance — — — — 2,854 — — — — — — — — Exchangeable share conversions — — 62,606 — ( 62,606 ) — — — — — — — — Investment Agreement warrants — — — — — — — 22.8 — — 22.8 — 22.8 Unrealized gain on debt securities — — — — — — — — — 3.2 3.2 — 3.2 Currency translation adjustment — — — — — — — — — 44.1 44.1 — 44.1 Net loss — — — — — — — — ( 490.0 ) — ( 490.0 ) ( 1.4 ) ( 491.4 ) Other — — — 0.1 — — ( 0.2 ) 7.4 — — 7.3 — 7.3 Balance as of December 31, 2023 — — 151,552,694 1.8 560,267 — ( 779.5 ) 4,436.6 ( 335.5 ) ( 121.3 ) 3,202.1 ( 2.5 ) 3,199.6 Share-based compensation arrangements — — 510,641 — — — — 52.9 — — 52.9 — 52.9 Common stock issuance — — 4,055 — — — — 0.1 — — 0.1 — 0.1 Exchangeable share issuance — — — — 68,048 — — — — — — — — Exchangeable share conversions — — 161,781 — ( 161,781 ) — — — — — — — — Investment Agreement warrants — — — — — — — 57.6 — — 57.6 — 57.6 Unrealized gain on debt securities — — — — — — — — — 5.4 5.4 — 5.4 Currency translation adjustment — — — — — — — — — ( 139.1 ) ( 139.1 ) — ( 139.1 ) Net loss — — — — — — — — ( 311.5 ) — ( 311.5 ) ( 1.8 ) ( 313.3 ) Other — — — — — — — ( 4.8 ) — — ( 4.8 ) — ( 4.8 ) Balance as of December 31, 2024 — — 152,229,171 1.8 466,534 — ( 779.5 ) 4,542.4 ( 647.0 ) ( 255.0 ) 2,862.7 ( 4.3 ) 2,858.4 Share-based compensation arrangements — — 359,205 — — — — 60.9 — — 60.9 — 60.9 Share repurchases — — ( 20,090,831 ) — — — ( 354.4 ) — — — ( 354.4 ) — ( 354.4 ) Exchangeable share conversions — — 86,713 — ( 86,713 ) — — — — — — — — Investment Agreement warrants — — — — — — — 57.1 — — 57.1 — 57.1 Unrealized loss on debt securities — — — — — — — — — ( 3.8 ) ( 3.8 ) — ( 3.8 ) Currency translation adjustment — — — — — — — — — 65.5 65.5 — 65.5 Net loss — — — — — — — — ( 843.1 ) — ( 843.1 ) ( 2.2 ) ( 845.3 ) Other — — — — — — ( 3.3 ) ( 7.6 ) — — ( 10.9 ) — ( 10.9 ) Balance as of December 31, 2025 — $ — 132,584,258 $ 1.8 379,821 $ — $ ( 1,137.2 ) $ 4,652.8 $ ( 1,490.1 ) $ ( 193.3 ) $ 1,834.0 $ ( 6.5 ) $ 1,827.5 See accompanying notes to the Consolidated Financial Statements. 63 Table of Contents PENN ENTERTAINMENT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the year ended December 31, (in millions) 2025 2024 2023 Operating activities Net loss $ ( 845.3 ) $ ( 313.3 ) $ ( 491.4 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 446.9 433.6 435.1 Amortization of debt discount and debt issuance costs 8.3 8.7 8.1 Noncash interest expense 14.3 47.1 36.1 Noncash operating lease expense 372.4 316.6 305.5 Gain on Barstool Acquisition, net — — ( 83.4 ) Gain on REIT transactions, net ( 3.3 ) — ( 500.8 ) Loss on disposal of Barstool — — 923.2 Loss on sale or disposal of property and equipment 0.4 10.0 0.1 Income from unconsolidated affiliates ( 37.7 ) ( 28.1 ) ( 25.3 ) Return on investment from unconsolidated affiliates 37.4 33.4 33.3 Deferred income taxes 26.9 ( 58.1 ) ( 32.7 ) Stock-based compensation 60.9 52.9 85.9 Investment Agreement warrant expense 57.1 67.9 12.5 Impairment losses 945.3 89.1 130.6 Gain on financing arrangement ( 215.1 ) — — Loss on early extinguishment of debt 11.8 0.3 — Changes in operating assets and liabilities, net of businesses acquired Accounts receivable 1.6 58.9 ( 74.8 ) Prepaid expenses and other current assets ( 19.0 ) 26.7 ( 66.3 ) Other assets ( 12.1 ) ( 35.7 ) ( 18.2 ) Accounts payable ( 2.4 ) 14.2 ( 8.6 ) Accrued expenses 18.0 ( 67.7 ) 25.9 Income taxes ( 3.8 ) 33.4 ( 50.2 ) Operating lease liabilities ( 356.6 ) ( 298.2 ) ( 305.8 ) Other current and long-term liabilities ( 23.9 ) ( 48.4 ) 107.4 Other 26.1 16.0 9.7 Net cash provided by operating activities 508.2 359.3 455.9 Investing activities Capital expenditures ( 647.7 ) ( 482.7 ) ( 360.0 ) Proceeds from sale-and-leaseback transactions in conjunction with development projects 280.0 — — Sale of Barstool Sports, net of cash — — ( 50.9 ) Consideration paid for acquisitions of businesses, net of cash acquired — — ( 314.6 ) Consideration paid for gaming licenses and other intangible assets ( 37.7 ) ( 57.9 ) ( 21.9 ) Other 54.3 ( 0.6 ) 4.8 Net cash used in investing activities ( 351.1 ) ( 541.2 ) ( 742.6 ) 64 Table of Contents For the year ended December 31, (in millions) 2025 2024 2023 Financing activities Proceeds from revolving credit facility 877.5 — — Repayments on revolving credit facility ( 307.5 ) — — Repurchases of convertible debt ( 223.8 ) — — Principal payments on long-term debt ( 37.5 ) ( 37.5 ) ( 37.5 ) Payments of other long-term obligations ( 0.7 ) ( 10.1 ) ( 18.7 ) Principal payments on financing obligations ( 43.5 ) ( 40.8 ) ( 39.2 ) Principal payments on finance leases ( 53.4 ) ( 50.3 ) ( 47.1 ) Repurchases of common stock ( 354.4 ) — ( 149.8 ) Proceeds from insurance financing 26.8 29.3 34.4 Payments on insurance financing ( 31.1 ) ( 35.4 ) — Indemnification payments — ( 30.5 ) — Other ( 18.0 ) ( 11.2 ) ( 4.7 ) Net cash used in financing activities ( 165.6 ) ( 186.5 ) ( 262.6 ) Effect of currency rate changes on cash, cash equivalents, and restricted cash ( 0.5 ) ( 2.3 ) ( 0.4 ) Change in cash, cash equivalents, and restricted cash ( 9.0 ) ( 370.7 ) ( 549.7 ) Cash, cash equivalents, and restricted cash at the beginning of the year 723.8 1,094.5 1,644.2 Cash, cash equivalents, and restricted cash at the end of the year $ 714.8 $ 723.8 $ 1,094.5 For the year ended December 31, (in millions) 2025 2024 2023 Reconciliation of cash, cash equivalents, and restricted cash: Cash and cash equivalents $ 686.6 $ 706.6 $ 1,071.8 Restricted cash included in Other current assets 27.0 16.0 21.5 Restricted cash included in Other assets 1.2 1.2 1.2 Total cash, cash equivalents, and restricted cash $ 714.8 $ 723.8 $ 1,094.5 Supplemental disclosure: Cash paid for interest, net of amounts capitalized $ 383.0 $ 415.5 $ 420.1 Non-cash activities: Accrued capital expenditures $ 51.1 $ 53.8 $ 23.5 See accompanying notes to the Consolidated Financial Statements 65 Table of Contents PENN ENTERTAINMENT, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1—Organization Organization: PENN Entertainment, Inc., together with its subsidiaries (“PENN,” the “Company,” “we,” “our,” or “us”), operates in 28 jurisdictions throughout North America, with a broadly diversified portfolio of casinos, racetracks, and online sports betting (“OSB”) and iCasino offerings. PENN’s focus is on organic cross-sell opportunities, reinforced by its market-leading retail casinos, sports media assets and technology, including a proprietary state-of-the-art, fully integrated digital sports betting and iCasino platform, and an in-house iCasino content studio. The Company’s portfolio is further bolstered by its industry-leading PENN Play TM customer loyalty program, offering its over 33 million members a unique set of rewards and experiences. 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. (Nasdaq: GLPI) (“GLPI”), a real estate investment trust (“REIT”), and include the AR PENN Master Lease, 2023 Master Lease, and Pinnacle Master Lease (as such terms are defined in Note 11, “Leases,” and collectively referred to as the “Master Leases”). Note 2—Significant Accounting Policies and Basis of Presentation Basis of Presentation: The Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and with the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission. Principles of Consolidation: The Consolidated Financial Statements include the accounts of PENN Entertainment, Inc. and its subsidiaries. Investments in and advances to unconsolidated affiliates that do not meet the consolidation criteria of the authoritative guidance for voting interest entities (“VOEs”) or variable interest entities (“VIEs”) are accounted for under the equity method. All intercompany accounts and transactions have been eliminated in consolidation. Reclassifications: Certain reclassifications have been made to conform the prior period presentation with current year presentation. Use of Estimates: The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements, and (iii) the reported amounts of revenues and expenses during the reporting period. Estimates used by us may include, among other things, the useful lives for depreciable and amortizable assets, the provision for credit losses, income tax provisions, the evaluation of the future realization of deferred tax assets, indemnification liabilities associated with certain tax matters, determining the adequacy of reserves for self-insured liabilities, the liabilities associated with our PENN Play program, the initial measurements of financing obligations and lease liabilities associated with our Triple Net Leases (as defined in Note 11, “Leases” ), the initial selection of useful lives for depreciable and amortizable assets related to acquisitions, contingencies, and litigation inclusive of financing arrangements in which the Company receives up-front cash proceeds, and stock-based compensation expense. Additionally, we use estimates for projected cash flows when assessing (i) the recoverability of long lived assets, goodwill, and other intangible assets, (ii) the initial valuation of intangible assets in conjunction with acquisitions, and (iii) the fair value of land and building components during lease classification tests. We applied estimation methods consistently for the periods presented within our Consolidated Financial Statements. Actual results may differ from those estimates. Segment Information: We have five reportable segments: Northeast, South, West, Midwest, and Interactive. 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. The Northeast, South, West, and Midwest segments (referred to as our “retail segments”) primarily generate revenue from gaming operations (such as slot machines and table games), food and beverage offerings, and hotel visitation. The Interactive segment includes all of our OSB, online casino/iCasino, and social gaming (collectively referred to as “online gaming”) operations, management of retail sports betting, and media operations. 66 Table of Contents See Note 17, “Segment Information” and Note 11, “Leases” for further segment and lease structure information, respectively. For financial reporting purposes, we aggregate our operating segments into the following reportable segments: Location Real Estate Assets Lease or Ownership Structure Northeast segment Ameristar East Chicago East Chicago, Indiana Pinnacle Master Lease Hollywood Casino Bangor Bangor, Maine AR PENN Master Lease Hollywood Casino at Charles Town Races Charles Town, West Virginia AR PENN Master Lease Hollywood Casino Columbus Columbus, Ohio 2023 Master Lease Hollywood Casino at Greektown Detroit, Michigan VICI Master Lease Hollywood Casino Lawrenceburg Lawrenceburg, Indiana AR PENN Master Lease Hollywood Casino Morgantown Morgantown, Pennsylvania Morgantown Lease (1) Hollywood Casino at PENN National Race Course Grantville, Pennsylvania AR PENN Master Lease Hollywood Casino Perryville Perryville, Maryland 2023 Master Lease Hollywood Casino at The Meadows Washington, Pennsylvania 2023 Master Lease Hollywood Casino Toledo Toledo, Ohio 2023 Master Lease Hollywood Casino York York, Pennsylvania Operating Lease (not with REIT Landlord) Hollywood Gaming at Dayton Raceway Dayton, Ohio AR PENN Master Lease Hollywood Gaming at Mahoning Valley Race Course Youngstown, Ohio AR PENN Master Lease Marquee by PENN (2) Pennsylvania N/A Plainridge Park Casino Plainville, Massachusetts Pinnacle Master Lease South segment 1 st Jackpot Casino Tunica, Mississippi AR PENN Master Lease Ameristar Vicksburg Vicksburg, Mississippi Pinnacle Master Lease Boomtown Biloxi Biloxi, Mississippi AR PENN Master Lease Boomtown Bossier City Bossier City, Louisiana Pinnacle Master Lease Boomtown New Orleans New Orleans, Louisiana Pinnacle Master Lease Hollywood Casino Gulf Coast Bay St. Louis, Mississippi AR PENN Master Lease Hollywood Casino Tunica Tunica, Mississippi AR PENN Master Lease L’Auberge Baton Rouge Baton Rouge, Louisiana Pinnacle Master Lease L’Auberge Lake Charles Lake Charles, Louisiana Pinnacle Master Lease Margaritaville Resort Casino Bossier City, Louisiana VICI Master Lease West segment Ameristar Black Hawk Black Hawk, Colorado Pinnacle Master Lease Cactus Petes and Horseshu Jackpot, Nevada Pinnacle Master Lease M Resort Spa Casino Henderson, Nevada 2023 Master Lease Zia Park Casino Hobbs, New Mexico AR PENN Master Lease Midwest segment Ameristar Council Bluffs Council Bluffs, Iowa Pinnacle Master Lease Argosy Casino Alton (3) Alton, Illinois AR PENN Master Lease Argosy Casino Riverside Riverside, Missouri AR PENN Master Lease Hollywood Casino Aurora Aurora, Illinois 2023 Master Lease Hollywood Casino Joliet Joliet, Illinois 2023 Master Lease Hollywood Casino at Kansas Speedway (4) Kansas City, Kansas Owned - Joint Venture Hollywood Casino St. Louis Maryland Heights, Missouri AR PENN Master Lease Prairie State Gaming (2) Illinois N/A River City Casino St. Louis, Missouri Pinnacle Master Lease (1) Upon termination of the Morgantown Lease, ownership of the constructed building and all tenant improvements will transfer from the Company to GLPI. (2) VGT route operations. (3) The riverboat is owned by us and not subject to the AR PENN Master Lease. (4) Pursuant to a joint venture with NASCAR Holdings LLC (“NASCAR”) and includes the Company’s 50 % investment in Kansas Entertainment, LLC (“Kansas Entertainment”), which owns Hollywood Casino at Kansas Speedway. 67 Table of Contents Cash and Cash Equivalents: The Company considers all cash balances and highly-liquid investments with original maturities of three months or less at the date of purchase to be cash and cash equivalents. Concentration of Credit Risk: Financial instruments that subject the Company to credit risk consist of cash and cash equivalents and accounts receivable. The Company’s policy is to limit the amount of credit exposure to any one financial institution, and place investments with financial institutions evaluated as being creditworthy, or in short-term money market funds which are exposed to minimal interest rate and credit risk. The Company has bank deposits and overnight repurchase agreements that exceed federally-insured limits. Concentration of credit risk, with respect to casino receivables, is limited through the Company’s credit evaluation process. The Company issues markers to approved casino customers following investigations of creditworthiness. The Company utilizes a forward-looking current expected credit loss model to measure the provision for credit losses. The Company’s receivables as of December 31, 2025 and 2024 primarily consisted of the following: December 31, (in millions) 2025 2024 Markers and returned checks $ 14.0 $ 13.5 Payment processors, credit card, and other advances to customers 80.1 86.1 Receivables from ATM and cash kiosk transactions 33.8 36.4 Hotel and banquet 3.4 3.9 Racing settlements 7.4 7.2 Online gaming and licensing receivables from third-party operators, including taxes 73.1 55.9 Media receivables 15.5 15.7 Other 32.1 41.7 Provision for credit losses ( 5.2 ) ( 3.6 ) Accounts receivable, net $ 254.2 $ 256.8 Property and Equipment, Net: Property and equipment are stated at cost, less accumulated depreciation. Capital expenditures are accounted for as either project capital (new facilities or expansions) or maintenance (replacement). Project capital expenditures are for fixed asset additions associated with constructing new facilities, or expansions of existing facilities. Maintenance capital expenditures are expenditures to replace existing fixed assets with a useful life greater than one year that are obsolete, worn out or no longer cost-effective to repair. Maintenance and repairs that neither add materially to the value of the asset nor appreciably prolong its useful life are charged to expense as incurred. Gains or losses on the disposal of property and equipment are included in the determination of income. The estimated useful lives of property and equipment are determined based on the nature of the assets as well as the Company’s current operating strategy. Depreciation of property and equipment is recorded using the straight-line method over the shorter of the estimated useful life of the asset or the related lease term, if any, as follows: Years Land improvements 15 Buildings and improvements 5 to 31 Vessels 10 to 31 Furniture, fixtures, and equipment 1 to 31 All costs funded by the Company considered to be an improvement to the real estate assets subject to any of our Triple Net Leases (as defined in Note 11, “Leases” ) are recorded as leasehold improvements. Leasehold improvements are depreciated over the shorter of the estimated useful life of the improvement or the related lease term. The Company reviews the carrying amount of its property and equipment for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable based on undiscounted estimated future cash flows expected to result from its use and eventual disposition. The factors considered by the Company in performing this assessment include current operating results, trends and prospects, as well as the effect of obsolescence, demand, competition, and other regulatory and economic factors. 68 Table of Contents For purposes of recognizing and measuring impairment, assets are grouped at the individual property level representing the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets. In assessing the recoverability of the carrying amount of property and equipment, we must make assumptions regarding future cash flows and other factors. If these estimates or the related assumptions change in the future, we may be required to record an impairment loss for these assets. Such an impairment loss would be recognized as a non-cash component of operating income. See Note 7, “Property and Equipment, Net.” Goodwill and Other Intangible Assets: Goodwill represents the future economic benefits of a business combination measured as the excess of the purchase price over the fair value of net assets acquired and has been allocated to our reporting units. Goodwill is tested for impairment annually on October 1 st of each year, or more frequently if indicators of impairment exist. For the quantitative goodwill impairment test, an income approach, in which a discounted cash flow (“DCF”) model is utilized, and a market-based approach using guideline public company multiples of earnings before interest, taxes, depreciation, and amortization (“EBITDA”) from the Company’s peer group are utilized in order to estimate the fair market value of the Company’s reporting units. In determining the carrying amount of each reporting unit that utilizes real estate assets subject to our Triple Net Leases (as defined in Note 11, “Leases” ), if and as applicable, (i) the Company allocates each reporting unit their pro-rata portion of the right-of-use (“ROU”) assets, lease liabilities, and/or financing obligations, and (ii) pushes down the carrying amount of the property and equipment subject to such leases. The Company compares the fair value of its reporting units to the carrying amounts. If the carrying amount of the reporting unit exceeds the fair value, an impairment is recorded equal to the amount of the excess (not to exceed the amount of goodwill allocated to the reporting unit). We consider our gaming licenses, trademarks, and certain other intangible assets to be indefinite-lived based on our future expectations to operate our gaming properties indefinitely as well as our historical experience in renewing these intangible assets at minimal cost with various state and provincial commissions. Indefinite-lived intangible assets are tested annually for impairment on October 1 st of each year, or more frequently if indicators of impairment exist, by comparing the fair value of the recorded assets to their carrying amount. If the carrying amounts of the indefinite-lived intangible assets exceed their fair value, an impairment is recognized. The Company completes its testing of its indefinite-lived intangible assets prior to assessing the realizability of its goodwill. The Company assesses the fair value of its gaming licenses using the Greenfield Method under the income approach, which estimates the fair value using a DCF model assuming the Company built a casino with similar utility to that of the existing casino. The method assumes a theoretical start-up company going into business without any assets other than the intangible asset being valued. The Company assesses the fair value of its 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. Other intangible assets that have a definite-life, including gaming technology and media technology, are amortized on a straight-line basis over their estimated useful lives or related service contract. The Company reviews the carrying amount of its amortizing intangible assets for possible impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Should events and circumstances indicate amortizing intangible assets may not be recoverable, the Company performs a test for recoverability whereby estimated undiscounted cash flows are compared to the carrying values of the assets. Should the estimated undiscounted cash flows exceed the carrying value, no impairments are recorded. If the undiscounted cash flows do not exceed the carrying values, an impairment is recorded based on the fair value of the asset, typically measured using either a discounted cash flow or replacement cost approach. Once an impairment of goodwill or other intangible asset has been recorded, it cannot be reversed. See Note 8, “Goodwill and Other Intangible Assets.” Convertible Debt: Our Convertible Notes (as defined within Note 10, “Long-term Debt” ) are accounted for in accordance with Accounting Standards Codification (“ASC”) 470-20, “Debt with Conversion and Other Options” (“ASC 470-20”). The Convertible Notes are accounted for as a single liability measured at amortized cost, as no embedded features require bifurcation. See Note 10, “Long-term Debt” for additional information. Financing Obligations: In accordance with ASC Topic 842, “Leases,” (“ASC 842”) for transactions in which the Company enters into a contract to sell an asset and leases it back from the seller under a sale and leaseback transaction, the Company must determine whether control of the asset has transferred from the Company. In cases whereby control has not transferred from the Company, we continue to recognize the underlying asset as “Property and equipment, net” within the Consolidated Balance Sheets, which is then depreciated over the shorter of the remaining useful life or lease term. Additionally, a financial liability is recognized and referred to as a financing obligation, in accordance with ASC 470, “Debt” (“ASC 470”). 69 Table of Contents The accounting for financing obligations under ASC 470 is materially consistent with the accounting for finance leases under ASC 842. The Company recognizes interest expense on the minimum lease payments related to a financing obligation under the effective yield method. Contingent payments are recorded to interest expense as incurred. Principal payments associated with financing obligations are presented as financing cash outflows and interest payments associated with financing obligations are presented as operating cash outflows within our Consolidated Statements of Cash Flows. For more information, see Note 7, “Property and Equipment, Net” and Note 11, “Leases.” We concluded that certain components contained within the Pinnacle Master Lease and the Morgantown Lease (both as defined in Note 11, “Leases” ) are required to be accounted for as financing obligations on the Consolidated Balance Sheets in accordance with ASC 842, as control of the underlying assets were not considered to have transferred from the Company. Operating and Finance Leases: The Company determines if a contract is or contains a leasing element at contract inception or the date in which a modification of an existing contract occurs. In order for a contract to be considered a lease, the contract must transfer the right to control the use of an identified asset for a period of time in exchange for consideration. Control is determined to have occurred if the lessee has the right to (i) obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use and (ii) direct the use of the identified asset. In accordance with ASC 842, we elected the following policies: (i) to account for lease and non-lease components as a single component for all classes of underlying assets and (ii) to not recognize short-term leases (i.e., leases that are less than 12 months and do not contain purchase options) within the Consolidated Balance Sheets, with the expense related to these short-term leases recorded in total operating expenses within the Consolidated Statements of Operations. The Company has leasing arrangements that contain both lease and non-lease components. We account for both the lease and non-lease components as a single component for all classes of underlying assets. In determining the present value of lease payments at lease commencement date, the Company utilizes its incremental borrowing rate based on the information available, unless the rate implicit in the lease is readily determinable. The liability for operating and finance leases is based on the present value of future lease payments. Operating lease expenses are primarily recorded as rent expense, which are included within “General and administrative” within the Consolidated Statements of Operations and presented as operating cash outflows within the Consolidated Statements of Cash Flows. Finance lease expenses are recorded as depreciation expense, which is included within “Depreciation and amortization” and “Interest expense, net” within the Consolidated Statements of Operations over the lease term. Principal payments associated with finance leases are presented as financing cash outflows and interest payments associated with finance leases are presented as operating cash outflows within the Consolidated Statements of Cash Flows. ROU assets are monitored for potential impairment similar to the Company’s property and equipment, using the impairment model in ASC 360, “Property, Plant and Equipment.” If the Company determines the carrying amount of a ROU asset is not recoverable, it would recognize an impairment charge equivalent to the amount required to reduce the carrying value of the asset to its estimated fair value. Debt Discount and Debt Issuance Costs: Debt issuance costs that are incurred by the Company in connection with the issuance of debt are deferred and amortized to interest expense using the effective interest method over the contractual term of the underlying indebtedness. These costs are classified as a direct reduction of long-term debt within the Company’s Consolidated Balance Sheets. Self-Insurance Reserves: The Company is self-insured for employee health coverage, general liability and workers’ compensation up to certain stop-loss amounts (for general liability and workers’ compensation). We use a reserve method for each reported claim plus an allowance for claims incurred but not yet reported to a fully-developed claims reserve method based on an actuarial computation of ultimate liability. Self-insurance reserves are included in “Accrued expenses and other current liabilities” within the Company’s Consolidated Balance Sheets. Income Taxes: Under ASC 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 bases 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. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more-likely-than-not (a greater than 50% probability) that some portion or all of the deferred tax assets will not be realized. The realizability of the net deferred tax assets is evaluated quarterly by assessing the valuation allowance and by adjusting the amount of the allowance, if necessary. The Company considers all available positive and negative evidence including projected future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. 70 Table of Contents The evaluation of both positive and negative evidence is a requirement pursuant to ASC 740 in determining more-likely-than-not the net deferred tax assets will be realized. In the event the Company determines that the deferred tax assets would be realized in the future in excess of their net recorded amount, an adjustment to the valuation allowance would be recorded, which would reduce the provision for income taxes. ASC 740 also creates a single model to address uncertainty in tax positions and clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in an enterprise’s financial statements. It also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure, and transition. See Note 13, “Income Taxes.” Revenue Recognition: Our revenue from contracts with customers consists primarily of gaming wagers, inclusive of sports betting and iCasino products, food and beverage transactions, hotel room sales, retail transactions, racing wagers, and third-party revenue sharing agreements. See Note 4, “Revenue Disaggregation” for information on our revenue by type and geographic location. The transaction price for a gaming wagering contract is the difference between gaming wins and losses, not the total amount wagered. The transaction price for food and beverage, hotel, and retail contracts is the net amount collected from the customer for such goods and services. Sales tax and other taxes collected on behalf of governmental authorities are accounted for on the net basis and are not included in revenues or expenses. The transaction price for our racing operations, inclusive of live racing events conducted at our racing facilities and our import and export arrangements, is the commission received from the pari-mutuel pool less contractual fees and obligations primarily consisting of purse funding requirements, simulcasting fees, tote fees and certain pari-mutuel taxes that are directly related to the racing operations. The transaction price for our management service contracts is the amount collected for services rendered in accordance with the contractual terms. Gaming revenue contracts involve two performance obligations for those customers earning points under our PENN Play program and a single performance obligation for customers that do not participate in the PENN Play program. The Company applies a practical expedient by accounting for its gaming contracts on a portfolio basis as opposed to an individual wagering contract. For purposes of allocating the transaction price in a gaming contract between the wagering performance obligation and the obligation associated with the loyalty points earned, we allocate an amount to the loyalty point contract liability based on the standalone selling price (“SSP”) of the points earned, which is determined by the value of a point that can be redeemed for slot play and complimentaries such as, food and beverage at our restaurants, Choice Privileges points, Ticketmaster tickets, lodging at our hotels, and products offered at our PENN Play mall and retail stores, less estimated breakage. The allocated revenue for gaming wagers is recognized at the conclusion of each wager or wagering game session. The liability associated with the loyalty points is deferred and recognized as revenue when the customer redeems the loyalty points for slot play and complimentaries and such goods and services are delivered to the customer. Food and beverage, hotel, and retail services have been determined to be separate, standalone performance obligations and the transaction price for such contracts is recorded as revenue as the good or service is transferred to the customer over their stay at the hotel or when the delivery is made for the food and beverage or retail product. Cancellation fees for hotel and meeting space services are recognized upon cancellation by the customer and are included in food, beverage, hotel, and other revenue within our Consolidated Statements of Operations. Racing revenue contracts, inclusive of our (i) host racing facilities, (ii) import arrangements that permit us to simulcast in live racing events occurring at other racetracks, and (iii) export arrangements that permit our live racing events to be simulcast at other racetracks, provide access to and the processing of wagers into the pari-mutuel pool. The Company has concluded it is not the controlling entity to the arrangement, but rather functions as an agent to the pari-mutuel pool. Commissions earned from the pari-mutuel pool less contractual fees and obligations are recognized on a net basis, which is included within food, beverage, hotel, and other revenues within our Consolidated Statements of Operations. Management services have been determined to be separate, standalone performance obligations and the transaction price for such contracts are recorded as services are performed. The Company records revenues on a monthly basis calculated by applying the contractual rate called for in the contracts. In addition to sports betting and iCasino revenues, PENN Interactive generates in-app purchase and advertising revenues from free-to-play social casino games, which can be downloaded to mobile phones and tablets from digital storefronts. Players can purchase virtual playing credits within our social casino games, which allows for increased playing opportunities and functionality. PENN Interactive records deferred revenue from the sale of virtual playing credits and recognizes this revenue over the average redemption period of the credits, which is generally one day . Advertising revenues are recognized in the period when the advertising impression, click, or install delivery occurs. 71 Table of Contents Furthermore, PENN Interactive generates revenues from advertising on theScore media app. Advertising revenue is recorded at the time of fulfilling the performance obligations relating to the display of customers’ advertisements on theScore media app. PENN Interactive also enters into multi-year agreements with sports betting operators for OSB and iCasino market access (“Skins”) across our portfolio, of which the Company generally receives upfront (i) cash or (ii) cash and equity securities. Additionally, in consideration for the use of each Skin, the Company receives a monthly revenue share amount of the revenues earned by the operators less contractual fees and obligations primarily consisting of taxes, promotional credits, data fees and player costs. The market access provided to operators by jurisdiction and by activity represent separate performance obligations. The transaction price includes fixed fees for access to certain geographic markets and variable consideration in the form of a monthly revenue share, annual minimum guarantee amounts, and reimbursements for out-of-pocket expenses including jurisdictional gaming taxes. The upfront and fixed access fees relate solely to distinct markets and are allocated to the performance obligations specific to those markets. Market access fees are recognized as revenue over the term of the related market access agreement which commences upon the online launch of the activity by the third-party operator. Monthly revenue share and annual minimum guarantee variable consideration relate directly to the Company’s efforts to satisfy each individual performance obligation and, as such, is allocated to each performance obligation. Revenues from monthly revenue shares are recognized in the period in which the revenue was earned by our third-party operators. Minimum guarantee revenue is deferred at the end of the period in which it relates and subsequently recognized as revenue over the remaining term of the market access agreement. The Company also recognizes revenue for reimbursements of certain out-of-pocket expenses, including license fees and jurisdictional gaming taxes. The Company has elected the “right to invoice” practical expedient and recognizes revenue upon incurring reimbursable costs, as appropriate. Complimentaries Associated with Gaming Contracts Food, beverage, hotel, and other services furnished to patrons for free as an inducement to gamble at our retail properties or through the redemption of our customers’ loyalty points are recorded as “Food, beverage, hotel, and other” revenues at their estimated standalone selling prices, with an offset recorded as a reduction to “Gaming” revenues. The cost of providing complimentary goods and services to patrons as an inducement to gamble as well as for the fulfillment of our loyalty point obligation is included in “Food, beverage, hotel, and other” expenses. Revenues recorded to “Food, beverage, hotel, and other” and offset to “Gaming” revenues were as follows: For the year ended December 31, (in millions) 2025 2024 2023 Food and beverage $ 245.0 $ 224.6 $ 215.5 Hotel 138.8 139.8 139.0 Other 8.4 9.3 12.4 Total complimentaries associated with gaming contracts $ 392.2 $ 373.7 $ 366.9 Additionally, the Company provides discretionary complimentaries in the form of iCasino and OSB free play bonuses. Free play bonuses provided to patrons as an inducement to gamble on the Company’s digital sports betting and iCasino apps are recorded as a reduction of “Gaming” revenues. Customer-related Liabilities The Company has three general types of liabilities related to contracts with customers: (i) the obligation associated with its PENN Play program (loyalty points and tier status benefits), (ii) advance payments on goods and services yet to be provided and for unpaid wagers, and (iii) deferred revenue associated with third-party OSB and/or iCasino for OSB and iCasino market access. Our PENN Play program connects the Company’s brands under one loyalty program and allows members to earn loyalty points, or “PENN Cash,” redeemable for slot play and complimentaries, such as food and beverage at our restaurants, lodging at our hotels, redemptions at the PENN Play marketplace that features popular retailers, and products offered at our retail stores across the vast majority of our properties. In addition, members of the PENN Play program earn credit toward tier status, which entitles them to receive certain other benefits, such as priority access, discounts, gifts, trips to PENN destinations, partner experiences, and PENN Cash. 72 Table of Contents The obligation associated with our PENN Play program, which is included in “Accrued expenses and other current liabilities” within our Consolidated Balance Sheets, was $ 29.8 million and $ 29.7 million as of December 31, 2025 and 2024, respectively, and consisted primarily of the obligation associated with the loyalty points. Our loyalty point obligations are generally settled within six months of issuance. Changes between the opening and closing balances primarily relate to the timing of our customers’ election to redeem loyalty points as well as the timing of when our customers receive their earned tier status benefits. The Company’s advance payments on goods and services yet to be provided and for unpaid wagers primarily consist of the following: (i) deposits on rooms and convention space; (ii) money deposited on behalf of a customer in advance of their property visit (referred to as “safekeeping” or “front money”); (iii) money deposited in an online wallet not yet wagered; (iv) money deposited in an online wallet for pending and concluded wagers not yet withdrawn; (v) outstanding tickets generated by slot machine play, sports betting, or pari-mutuel wagering; (vi) outstanding chip liabilities; (vii) unclaimed jackpots; and (viii) gift cards redeemable at our properties. Unpaid wagers generally represent obligations stemming from prior wagering events, of which revenue was previously recognized. The Company’s advance payments on goods and services yet to be provided and for unpaid wagers were $ 133.7 million and $ 151.4 million as of December 31, 2025 and 2024, respectively, and are included in “Accrued expenses and other current liabilities” within our Consolidated Balance Sheets. The Company’s deferred revenue is primarily related to PENN Interactive, which enters into multi-year agreements with third-party OSB and/or iCasino operators for OSB and iCasino market access across our portfolio of properties. As of December 31, 2025, and 2024, our deferred revenue balance was $ 34.1 million and $ 42.6 million, respectively, the majority of which is included in “Other long-term liabilities” within our Consolidated Balance Sheets. During the years ended December 31, 2025, 2024, and 2023 we recognized revenue of $ 9.6 million, $ 5.7 million, and $ 21.6 million, respectively, that was included in the December 31, 2024, 2023, and 2022 deferred revenue balances. Advertising: The Company expenses advertising costs the first time the advertising takes place or as incurred. Advertising expenses, which generally relate to media placement costs and are primarily included in “Gaming” expenses within the Consolidated Statements of Operations, were $ 358.1 million, $ 456.4 million, and $ 173.3 million, for the years ended December 31, 2025, 2024, and 2023, respectively. Advertising expense includes media marketing services and brand and other rights previously provided by ESPN, Inc. and ESPN Enterprises Inc. (together, “ESPN”) pursuant to the Sportsbook Agreement (as defined in Note 12, “Commitments and Contingencies” ) which was terminated on November 5, 2025, and other media placement costs. Gaming and Pari-mutuel Taxes: We are subject to gaming and pari-mutuel taxes based on gross gaming revenue and pari-mutuel revenue in the jurisdictions in which we operate, as well as taxes on revenues derived from arrangements which allow for third-party OSB and/or iCasino partners to operate online sportsbooks and iCasinos under our gaming licenses. The Company primarily recognizes gaming and pari-mutuel tax expense based on the statutorily required percentage of revenue that is required to be paid to state, provincial and/or local jurisdictions in the states and provinces where or in which the wagering occurs. Also included in gaming and pari-mutuel taxes are costs to support the operations of local regulatory authorities which some jurisdictions require us to pay. Gaming and pari-mutuel taxes are recorded in “Gaming” expenses or “Food, beverage, hotel, and other” expenses within the Consolidated Statements of Operations, and were $ 2.6 billion, $ 2.3 billion, and $ 2.3 billion for the years ended December 31, 2025, 2024, and 2023, respectively. Foreign Currency Translation: The functional currency of the Company’s foreign subsidiaries is the local currency in which the subsidiary operates. Balance sheet accounts are translated at the exchange rate in effect at each balance sheet date. Translation adjustments resulting from this process are recorded to other comprehensive income or loss. Revenues and expenses are typically translated at the average exchange rates during the year. Gains or losses resulting from foreign currency transactions are included in “Other” within the Consolidated Statements of Operations. Comprehensive Income or Loss and Accumulated Other Comprehensive Income or Loss: Comprehensive income or loss includes net income or loss and all other non-stockholder changes in equity, or other comprehensive income or loss. The balance of accumulated other comprehensive income or loss consists of foreign currency translation adjustments and unrealized gains or losses on debt securities. 73 Table of Contents Stock-Based Compensation: The cost of employee services received in exchange for an award of equity instruments is based on the grant-date fair value of the award and the expense is recognized ratably over the requisite service period. The Company accounts for forfeitures in the period in which they occur based on actual amounts. The fair value of stock options is estimated at the grant date using the Black-Scholes option-pricing model, which requires us to make assumptions, including the expected term, which is based on the contractual term of the stock option and historical exercise data of the Company’s employees; the risk-free interest rate, which is based on the U.S. Treasury spot rate with a term equal to the expected term assumed at the grant date; the expected volatility, which is estimated based on the historical volatility of the Company’s stock price over the expected term assumed at the grant date; and the expected dividend yield, which is zero since we have not historically paid dividends. See Note 15, “Stock-based Compensation.” Earnings or Loss Per Share: Basic earnings or loss per share (“EPS”) is computed by dividing net income or loss applicable to common stock by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the additional dilution, if any, for all potentially-dilutive securities such as warrants, stock options, unvested restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) (collectively with RSAs, “restricted stock”), outstanding convertible preferred stock, and convertible debt. Holders of the Company’s Series D Preferred Stock (as defined in Note 6, “Investments in and Advances to Unconsolidated Affiliates” ) were entitled to participate equally and ratably in all dividends and distributions paid to holders of PENN common stock irrespective of any vesting requirement. Accordingly, the Series D Preferred Stock shares were considered a participating security, and the Company was required to apply the two-class method to consider the impact of the preferred shares on the calculation of basic and diluted EPS. The previous holders of the Company’s Series D Preferred Stock were not obligated to absorb losses; therefore, in reporting periods where the Company was in a net loss position, it did not apply the two-class method. In reporting periods where the Company was in a net income position, the two-class method was applied by allocating all earnings during the period to common shares and preferred shares. See Note 16, “Loss per Share” for more information. As discussed in Note 14, “Stockholders’ Equity,” all remaining outstanding shares of Series D Preferred Stock were converted to common stock during the third quarter of 2023. There were no outstanding shares of Series D Preferred Stock as of December 31, 2025. Guarantees and Indemnifications: The Company accounts for indemnity obligations in accordance with ASC Topic 460-20, “Contingencies” and records a liability at fair value. On August 8, 2023, we entered into a stock purchase agreement with David Portnoy (the “Barstool SPA”) and we sold 100 % of the outstanding shares of Barstool Sports, Inc. (“Barstool” or “Barstool Sports”) common stock. Pursuant to the Barstool SPA, the Company agreed to indemnify Barstool and its subsidiaries and David Portnoy for certain tax matters. The indemnity provisions generally provide for the Company’s control of defense and settlement of claims, as well as certain other costs associated with potential tax matters related to Barstool and its subsidiaries and David Portnoy. Claims under the indemnification are paid upon demand. Provisions in the Barstool SPA limit the time within which an indemnification claim can be made to the later of the resolution of the indemnification claim or the relevant statutes of limitations. In the second quarter of 2024, the Company paid $ 30.5 million in settlement costs under this indemnification obligation. The maximum potential amount of future payments the Company could be required to make under this indemnification agreement is not estimable at this time due to uncertainties related to potential outcomes and other unique facts and circumstances involved in the Barstool SPA. For both periods ended as of December 31, 2025 and 2024, the Company has recorded a liability of $ 39.5 million for this agreement. Liabilities associated with the indemnification are recorded in “Other long-term liabilities” within the Consolidated Balance Sheets. See Note 5, “Acquisitions and Dispositions” . Application of Business Combination Accounting: We utilize the acquisition method of accounting in accordance with ASC 805, “Business Combinations,” (“ASC 805”) which requires us to allocate the purchase price to tangible and identifiable intangible assets based on their fair values. The excess of the purchase price over the fair value ascribed to tangible and identifiable intangible assets is recorded as goodwill. If the fair value ascribed to tangible and identifiable intangible assets changes during the measurement period (due to additional information being available and related Company analysis), the measurement period adjustment is recognized in the reporting period in which the adjustment amount is determined and offset against goodwill. The measurement period for our acquisitions is no more than one year in duration. See Note 5, “Acquisitions and Dispositions.” Voting Interest Entities and Variable Interest Entities: The Company consolidates all subsidiaries or other entities in which it has a controlling financial interest. The consolidation guidance requires an analysis to determine if an entity should be evaluated for consolidation using the VOE model or the VIE model. Under the VOE model, controlling financial interest is generally defined as a majority ownership of voting rights. Under the VIE model, controlling financial interest is defined as (i) the power to direct activities that most significantly impact the economic performance of the entity and (ii) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the entity. 74 Table of Contents For those entities that qualify as a VIE, the primary beneficiary is generally defined as the party who has a controlling financial interest in the VIE. The Company consolidates the financial position and results of operations of every VOE in which it has a controlling financial interest and VIEs in which it is considered to be the primary beneficiary. See Note 6, “Investments in and Advances to Unconsolidated Affiliates.” Note 3—New Accounting Pronouncements Accounting Pronouncements Adopted In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 updates the requirements for a public entity to enhance income tax disclosures to provide a better assessment on how an entity’s operations, related tax risks, tax planning, and operational opportunities affect its tax rate and prospects for future cash flows. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and was adopted on a prospective basis. The adoption of ASU 2023-09 resulted in additional disclosures in the notes to the Consolidated Financial Statements. See Note 13 , “ Income Taxes. ” Accounting Pronouncements to be Implemented In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”). ASU 2024-03 updates the requirements for a public entity to disclose additional information about specific income statement expense categories in the notes to financial statements. ASU 2024-03 does not change or remove current expense disclosure requirements, however, it affects where this information appears in the notes to financial statements. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, on a prospective or retrospective basis, with early adoption permitted. We are assessing the guidance and currently expect adoption of the new standard to result in additional disclosures in the notes to the Consolidated Financial Statements. In November 2024, the FASB issued ASU 2024-04, “Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments” (“ASU 2024-04”). ASU 2024-04 clarifies the determination of accounting treatment required for settlement of convertible debt (particularly, cash convertible instruments) at terms that differ from the original conversion terms. ASU 2024-04 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, on a prospective or retrospective basis, with early adoption permitted. The primary purpose of the new ASU 2024-04 is to improve the relevance and consistency in application of the induced conversion guidance in ASC 470-20. We have assessed the guidance and do not expect the new standard to have a material impact on the Consolidated Financial Statements. We plan on adopting the standard on a prospective basis, which is applicable for the interim period commencing on January 1, 2026. In July 2025, the FASB issued ASU 2025-05, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”). ASU 2025-05 introduces optional relief for entities estimating expected credit losses on accounts receivable and contract assets arising from revenue transactions under ASC 606, “Revenue from Contracts with Customers.” The guidance allows entities to apply a practical expedient assuming current conditions persist over the asset’s life, and for certain non-public entities, to consider post-balance sheet cash collections when estimating credit losses. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. We have assessed the impact of this guidance, and do not expect the new standard to have a material impact on the Consolidated Financial Statements. We plan on adopting the standard on a prospective basis, which is applicable for the interim period commencing on January 1, 2026. In September 2025, the FASB issued ASU 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”). The amendments in ASU 2025-06 improve the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods, which may impact the timing and extent of cost capitalization for internal-use software. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods, on a prospective, modified, or retrospective basis, with early adoption permitted. We are currently assessing the guidance, and we do not expect the new standard to have a material impact on the Consolidated Financial Statements. 75 Table of Contents Note 4—Revenue Disaggregation Our revenues are generated primarily by providing the following types of services: (i) gaming, inclusive of retail sports betting, iCasino, and OSB; (ii) food and beverage; (iii) hotel; and (iv) other. Other revenues are primarily comprised of PENN Interactive’s revenues generated from third-party iCasino and OSB, in addition to the related gross-up for taxes, racing operations, advertising, retail, and commissions received on ATM transactions. Our revenue is disaggregated by type of revenue and geographic location (with no single foreign country’s revenue representing more than 10% of total consolidated revenues) of the related properties, which is consistent with our reportable segments, as follows: For the year ended December 31, 2025 (in millions) Northeast South West Midwest Interactive (1) Other Intersegment Eliminations (2) Total Revenues: Gaming $ 2,473.6 $ 877.2 $ 383.5 $ 1,051.6 $ 564.1 $ — $ — $ 5,350.0 Food and beverage 153.1 148.0 75.7 65.5 — 3.6 — 445.9 Hotel 53.0 100.0 65.2 35.1 — — — 253.3 Other 89.5 41.9 18.8 29.2 738.5 14.9 ( 21.0 ) 911.8 Total revenues $ 2,769.2 $ 1,167.1 $ 543.2 $ 1,181.4 $ 1,302.6 $ 18.5 $ ( 21.0 ) $ 6,961.0 For the year ended December 31, 2024 (in millions) Northeast South West Midwest Interactive (1) Other Intersegment Eliminations (2) Total Revenues: Gaming $ 2,465.0 $ 904.1 $ 366.6 $ 1,043.6 $ 390.2 $ — $ — $ 5,169.5 Food and beverage 147.8 132.7 73.9 62.3 — 3.5 — 420.2 Hotel 54.3 91.6 66.2 37.9 — — — 250.0 Other 88.6 40.6 18.6 28.4 569.7 16.1 ( 23.6 ) 738.4 Total revenues $ 2,755.7 $ 1,169.0 $ 525.3 $ 1,172.2 $ 959.9 $ 19.6 $ ( 23.6 ) $ 6,578.1 For the year ended December 31, 2023 (in millions) Northeast South West Midwest Interactive (1) Other Intersegment Eliminations (2) Total Revenues: Gaming $ 2,451.4 $ 950.3 $ 376.5 $ 1,046.5 $ 81.1 $ — $ — $ 4,905.8 Food and beverage 144.0 132.1 71.8 59.9 — 3.1 — 410.9 Hotel 55.3 93.7 61.0 37.3 — — — 247.3 Other 87.7 40.3 19.2 28.9 637.7 17.1 ( 32.0 ) 798.9 Total revenues $ 2,738.4 $ 1,216.4 $ 528.5 $ 1,172.6 $ 718.8 $ 20.2 $ ( 32.0 ) $ 6,362.9 (1) Other revenues within the Interactive segment are inclusive of gaming tax reimbursement amounts related to third-party OSB and/or iCasino partners for OSB and iCasino market access of $ 588.3 million, $ 435.6 million, and $ 390.4 million for the years ended December 31, 2025, 2024, and 2023, respectively. Additionally, due to the inclusion of Barstool operating results prior to the disposition on August 8, 2023, other revenues within the Interactive segment for the year ended December 31, 2023 included $ 105.8 million in advertising revenue and $ 29.8 million in retail revenue. (2) Primarily represents the elimination of intersegment revenues associated with our retail sportsbooks, which are operated by PENN Interactive. 76 Table of Contents Note 5—Acquisitions and Dispositions Barstool Acquisition and Disposition On February 17, 2023, we acquired the remaining 64 % of the outstanding shares of Barstool common stock not already owned by us for consideration of approximately $ 405.5 million, which is inclusive of cash and common stock issuance, repayment of Barstool indebtedness of $ 23.8 million, transaction expenses and other purchase price adjustments in accordance with GAAP (the “Barstool Acquisition”). Prior to the acquisition, we held a 36 % ownership interest, which was accounted for under the equity method. At the closing of the Barstool Acquisition, we obtained 100 % of the Barstool common stock, and determined the fair value of Barstool to be $ 660.0 million based on market participant assumptions. Upon the completion of the Barstool Acquisition, Barstool became an indirect wholly owned subsidiary of PENN. We issued 2,442,809 shares of our common stock to certain former stockholders of Barstool for the Barstool Acquisition (see Note 14, “Stockholders’ Equity” for further information) and utilized $ 315.3 million of cash to complete the Barstool Acquisition, inclusive of transaction expenses and repayment of Barstool indebtedness. The Company held 36 % of the outstanding shares of Barstool common stock prior to the Barstool Acquisition and, as such, the acquisition date estimated fair value of this previously held investment was a component of the purchase consideration. Based on the acquisition date fair value of Barstool of $ 660.0 million and the carrying amount of this investment of $ 171.1 million, the Company recorded a gain of $ 66.5 million related to remeasurement of the equity investment immediately prior to the acquisition date, which is included in “Gain on Barstool Acquisition, net” within our Consolidated Statements of Operations. The Company also recorded a gain of $ 16.9 million related to the acquisition of the remaining 64 % of Barstool common stock, which is included in “Gain on Barstool Acquisition, net” within our Consolidated Statements of Operations. Barstool’s revenue and net loss were included in our results for the period beginning February 17, 2023 through August 7, 2023, the day prior to the Barstool SPA, as described below. Barstool’s revenue and net loss for the period beginning February 17, 2023 through August 7, 2023, included in the Consolidated Statements of Operations, were $ 99.2 million and $ 23.9 million, respectively. On August 8, 2023, PENN entered into the Barstool SPA with David Portnoy to sell 100 % of the outstanding shares of Barstool to David Portnoy in exchange for nominal cash consideration and certain non-compete and other restrictive covenants. Pursuant to the Barstool SPA, PENN has the right to receive 50 % of the gross proceeds received by David Portnoy in any subsequent sale or other monetization event of Barstool. On August 8, 2023, the Company’s Board of Directors (the “Board”) approved the sale of Barstool to David Portnoy, and we classified the assets and liabilities to be disposed of as held-for-sale. These assets and liabilities were measured at the lower of (i) the carrying value when we classified the disposal group as held-for-sale or (ii) the fair value of the disposal group, less costs to sell. The Company recognized a pre-tax loss on disposal of $ 923.2 million (inclusive of $ 714.8 million in goodwill and intangible assets write offs and a $ 70.0 million indemnification liability discussed below) during the third quarter of 2023, included in “Loss on disposal of Barstool” within our Consolidated Statements of Operations. Pursuant to the Barstool SPA, PENN will indemnify Barstool and its subsidiaries and David Portnoy for certain tax matters. The indemnity provisions generally provide for the Company’s control of defense and settlement of claims, as well as certain other costs, associated with potential tax matters related to Barstool and its subsidiaries and David Portnoy. Claims under the indemnification are paid upon demand. Provisions in the Barstool SPA limit the time within which an indemnification claim can be made to the later of the resolution of the indemnification claim or the relevant statutes of limitations. In the second quarter of 2024, the Company paid $ 30.5 million in settlement costs under this indemnification obligation. The maximum potential amount of future payments the Company could be required to make under this indemnification agreement is not estimable at this time due to uncertainties related to potential outcomes and other unique facts and circumstances involved in the Barstool SPA. For information on the tax-related impacts from the Barstool transactions, see Note 13, “Income Taxes.” 77 Table of Contents Note 6—Investments in and Advances to Unconsolidated Affiliates Investment in Barstool In February 2020, we closed on our investment in Barstool pursuant to a stock purchase agreement with Barstool and certain stockholders of Barstool, in which we purchased 36 % (inclusive of 1 % on a delayed basis) of the common stock, par value $ 0.0001 per share, of Barstool for a purchase price of $ 161.2 million. The purchase price consisted of $ 135.0 million in cash and $ 23.1 million in shares of a new class of non-voting convertible preferred stock of the Company, in which we issued 883 shares of Series D Preferred Stock, par value $ 0.01 (the “Series D Preferred Stock”), to certain individual stockholders affiliated with Barstool. With respect to the remaining Barstool shares, we had immediately exercisable call rights and the existing Barstool stockholders had put rights, exercisable beginning three years after closing. Pursuant to the Barstool SPA, on August 11, 2023, all remaining outstanding shares of Series D Preferred Stock were converted to common stock. See Note 14, “Stockholders’ Equity” for further information. Prior to the acquisition of the remaining Barstool shares (which occurred on February 17, 2023 as discussed in Note 5, “Acquisitions and Dispositions” ), the Company determined that it did not qualify as the primary beneficiary of Barstool either at the commencement date of its investment or for subsequent periods prior to the acquisition, primarily as a result of the Company not having the power to direct the activities of the VIE that most significantly affect Barstool’s performance. Therefore, the Company did not consolidate the financial position nor the results of operations of Barstool and we recorded our proportionate share of Barstool’s net income or loss one quarter in arrears during the period January 1, 2023 through February 16, 2023. Kansas Joint Venture As of December 31, 2025 and 2024, our investment in Kansas Entertainment was $ 77.8 million and $ 80.9 million, respectively. During the years ended December 31, 2025, 2024, and 2023, the Company received distributions from Kansas Entertainment totaling $ 37.4 million, $ 33.4 million, and $ 33.3 million, respectively. The Company deems these distributions to be returns on its investment based on the source of those cash flows from the normal business operations of Kansas Entertainment. The Company has determined that Kansas Entertainment does not qualify as a VIE. Using the guidance for entities that are not VIEs, the Company determined that it did not have a controlling financial interest in the joint venture, primarily as it did not have the ability to direct the activities of the joint venture that most significantly impacted the joint venture’s economic performance without the input of NASCAR. Therefore, the Company did not consolidate the financial position of Kansas Entertainment as of December 31, 2025 and 2024, nor the results of operations for the years ended December 31, 2025, 2024, and 2023. The following table provides summarized balance sheet and results of operations information related to Kansas Entertainment and our share of income from unconsolidated affiliates from our investment in Kansas Entertainment: December 31, (in millions) 2025 2024 Current assets $ 25.7 $ 24.1 Long-term assets $ 133.6 $ 139.5 Current liabilities $ 17.8 $ 16.2 For the year ended December 31, (in millions) 2025 2024 2023 Revenues $ 188.4 $ 175.9 $ 170.8 Operating expenses 120.0 109.1 105.6 Operating income 68.4 66.8 65.2 Net income $ 68.5 $ 66.9 $ 65.2 Net income attributable to PENN Entertainment, Inc. $ 34.3 $ 33.5 $ 32.6 78 Table of Contents Note 7—Property and Equipment, Net Property and equipment, net, consisted of the following: December 31, (in millions) 2025 2024 Property and equipment - Not Subject to Master Leases Land and improvements $ 120.0 $ 125.5 Building, vessels, and improvements 325.7 323.4 Furniture, fixtures, and equipment 1,995.5 1,852.9 Leasehold improvements 752.7 584.4 Construction in progress 427.1 491.4 3,621.0 3,377.6 Less: Accumulated depreciation ( 2,027.8 ) ( 1,900.3 ) 1,593.2 1,477.3 Property and equipment - Subject to Master Leases Land and improvements 1,427.0 1,427.1 Building, vessels, and improvements 1,591.2 1,591.3 3,018.2 3,018.4 Less: Accumulated depreciation ( 894.1 ) ( 790.7 ) 2,124.1 2,227.7 Property and equipment, net $ 3,717.3 $ 3,705.0 Depreciation expense was as follows: For the year ended December 31, (in millions) 2025 2024 2023 Depreciation expense (1) $ 316.3 $ 293.9 $ 288.7 (1) During the years ended December 31, 2025, 2024, and 2023, we recorded depreciation expense of $ 103.4 million, $ 99.3 million, and $ 112.4 million, respectively, related to real estate assets subject to our Master Leases. 79 Table of Contents Note 8—Goodwill and Other Intangible Assets A reconciliation of goodwill and accumulated goodwill impairment losses, by reportable segment, is as follows: (in millions) Northeast South West Midwest Interactive Other Total Balance as of January 1, 2024 Goodwill, gross $ 923.5 $ 236.6 $ 216.8 $ 1,116.7 $ 1,664.0 $ 87.7 $ 4,245.3 Accumulated goodwill impairment losses ( 828.8 ) ( 61.0 ) ( 16.6 ) ( 556.1 ) — ( 87.7 ) ( 1,550.2 ) Goodwill, net $ 94.7 $ 175.6 $ 200.2 $ 560.6 $ 1,664.0 $ — $ 2,695.1 Effect of foreign currency exchange rates — — — — ( 119.7 ) — ( 119.7 ) Impairment losses during year — ( 6.1 ) — ( 6.2 ) — — ( 12.3 ) Balance as of December 31, 2024 Goodwill, gross $ 923.5 $ 236.6 $ 216.8 $ 1,116.7 $ 1,544.3 $ 87.7 $ 4,125.6 Accumulated goodwill impairment losses ( 828.8 ) ( 67.1 ) ( 16.6 ) ( 562.3 ) — ( 87.7 ) ( 1,562.5 ) Goodwill, net $ 94.7 $ 169.5 $ 200.2 $ 554.4 $ 1,544.3 $ — $ 2,563.1 Effect of foreign currency exchange rates — — — — 55.5 — 55.5 Impairment losses during year — ( 7.0 ) — — ( 825.0 ) — ( 832.0 ) Balance as of December 31, 2025 Goodwill, gross $ 923.5 $ 236.6 $ 216.8 $ 1,116.7 $ 1,599.8 $ 87.7 $ 4,181.1 Accumulated goodwill impairment losses ( 828.8 ) ( 74.1 ) ( 16.6 ) ( 562.3 ) ( 825.0 ) ( 87.7 ) ( 2,394.5 ) Goodwill, net $ 94.7 $ 162.5 $ 200.2 $ 554.4 $ 774.8 $ — $ 1,786.6 Summary of Impairment Charges by Reportable Segment For the year ended December 31, 2025 2024 2023 (in millions) Goodwill Gaming Licenses Trademarks Goodwill Gaming Licenses Trademarks Goodwill Gaming Licenses Segment Northeast $ — $ 23.5 $ — $ — $ 66.0 $ 1.0 $ 30.0 $ 100.6 South 7.0 64.8 4.5 6.1 3.3 6.5 — — West — — 5.5 — — — — — Midwest — — 15.0 6.2 — — — — Interactive 825.0 — — — — — — — Total $ 832.0 $ 88.3 $ 25.0 $ 12.3 $ 69.3 $ 7.5 $ 30.0 $ 100.6 Impairment charges on goodwill, gaming licenses, and trademarks are recorded to “ Impairment losses ” within our Consolidated Statement of Operations. Interim Assessments for Impairment During the third quarter of 2025, PENN announced the mutual decision for an early termination (the “Termination Agreement”) of its Sportsbook Agreement with ESPN (as defined in Note 12, “Commitments and Contingencies” ). Pursuant to the Termination Agreement, PENN’s exclusive right to use the ESPN BET trademark for OSB in the U.S. ended on December 1, 2025. As a result, the Company realigned its digital focus to leverage the strength of its U.S. iCasino and Canadian operations, while continuing to use OSB to drive both the acquisition of customers with significant lifetime value and unique cross-sell opportunities across PENN’s retail and digital assets. The Company rebranded its OSB offering in the U.S. to theScore Bet. 80 Table of Contents The realignment of its digital focus led the Company to revise its future cash flow projections for the Interactive reporting unit and to perform an interim quantitative impairment test during the third quarter of 2025, which resulted in a non-cash impairment charge of $ 825.0 million. The impairment charge is presented in “Impairment losses” within the Consolidated Statements of Operations. The estimated fair value of the Interactive goodwill was determined through a combination of a discounted cash flow model and a market-based approach, which utilized Level 3 inputs. Additionally, during the second quarter of 2025, PENN announced a development project to relocate its Ameristar Council Bluffs (“ACB”) riverboat casino operations to a new, land-based facility to be rebranded as Hollywood Casino Council Bluffs. As a result of this strategic rebranding decision, the Company reassessed the indefinite-lived classification of the ACB trademark and concluded the trademark is no longer considered to have an indefinite useful life. The Company performed a quantitative impairment test, then assigned the remaining carrying amount of $ 7.0 million a finite useful life of approximately 2.5 years. The interim assessment for impairment resulted in a non-cash impairment charge of $ 15.0 million, recorded within the Midwest segment, reflecting the decline in the trademark’s fair value. The primary driver of the impairment was a reduction in the projected revenues attributable to the ACB trademark compared to its prior valuation. The impairment charge is presented in “ Impairment losses ” within the Consolidated Statements of Operations. The fair value of the ACB trademark was estimated using a relief-from-royalty discounted cash flow model incorporating Level 3 inputs. Annual Assessments for Impairment In 2025, the annual assessment for impairment resulted in a non-cash impairment charge of $ 7.0 million to goodwill in our South segment due to reductions in long-term cash flow projections as a result of economic challenges in a specific operating region. In 2024, we recorded goodwill impairment charges totaling $ 12.3 million in our South and Midwest segments due to increased competition that led to slight reductions in long-term cash flow projections at certain of our properties. In 2023, we recorded a goodwill impairment charge of $ 30.0 million at our Hollywood Casino Greektown (“Greektown”) reporting unit due to economic challenges in the region in which it operates. The estimated fair value of the reporting units was determined through a combination of a discounted cash flow model and a market-based approach, which utilized Level 3 inputs. In 2025, 2024, and 2023, the annual assessment for impairment resulted in non-cash impairment charges of $ 88.3 million, $ 69.3 million, and $ 100.6 million, respectively, on our gaming licenses in our Northeast and South segments. A former expansion of legislation in the market and increased supply resulted in reductions in long-term cash flow projections for certain of our properties, resulting in impairment of gaming licenses. The estimated fair values of the gaming licenses were determined by using a discounted cash flow model, which utilized Level 3 inputs. In 2025 and 2024, the annual assessment for impairment resulted in non-cash impairment charges of $ 10.0 million and $ 7.5 million, respectively, on our trademarks. These charges primarily related to properties in our South and West segments due to reductions in long-term cash flow projections as a result of increased competition and economic challenges in specific operating regions. The estimated fair values of trademarks were determined by using discounted cash flow models, which utilized Level 3 inputs. Carrying Values of Goodwill and Other Intangible Assets As of October 1, 2025, the date of the most recent annual impairment test, five reporting units had negative carrying amounts. The amount of goodwill at these reporting units was as follows: (in millions) Northeast segment Plainridge Park Casino $ 6.3 South segment Ameristar Vicksburg $ 19.5 Boomtown New Orleans $ 5.2 West segment Cactus Petes and Horseshu $ 10.2 Midwest segment Ameristar Council Bluffs $ 36.2 81 Table of Contents The table below presents the gross carrying amount, accumulated amortization, and net carrying amount of each major class of other intangible assets: December 31, 2025 December 31, 2024 (in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets Gaming licenses $ 976.7 $ — $ 976.7 $ 1,064.9 $ — $ 1,064.9 Trademarks 291.7 — 291.7 319.5 — 319.5 Other 0.6 — 0.6 0.6 — 0.6 Amortizing intangible assets Customer relationships 111.9 ( 110.0 ) 1.9 111.6 ( 106.6 ) 5.0 Technology 370.7 ( 252.6 ) 118.1 303.0 ( 184.9 ) 118.1 Other 37.3 ( 21.5 ) 15.8 40.1 ( 18.3 ) 21.8 Total other intangible assets, net $ 1,788.9 $ ( 384.1 ) $ 1,404.8 $ 1,839.7 $ ( 309.8 ) $ 1,529.9 During the year ended December 31, 2024, we acquired a gaming license for operating online sports wagering in the state of New York, which was recorded to “Gaming licenses” at its fair value of $ 25.0 million. Amortization expense related to our amortizing intangible assets was $ 39.6 million, $ 49.9 million, and $ 58.8 million for the years ended December 31, 2025, 2024, and 2023, respectively. The following table presents the estimated amortization expense based on our amortizing intangible assets as of December 31, 2025: (in millions) Years ending December 31: 2026 $ 58.0 2027 40.1 2028 22.4 2029 4.7 2030 3.7 Thereafter 6.9 Total $ 135.8 82 Table of Contents Note 9—Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: December 31, (in millions) 2025 2024 Accrued salaries and wages $ 152.8 $ 141.3 Accrued gaming, pari-mutuel, property, and other taxes 120.8 120.2 Accrued interest 20.9 20.3 Other accrued expenses and other current liabilities: Deferred compensation (1) 119.3 107.2 Progressive jackpot liability 79.1 63.3 Advanced deposits 75.3 90.0 Unpaid wagers 52.4 56.5 Self-insurance liabilities 33.1 31.8 PENN Play loyalty point obligation 29.8 29.7 Other 222.1 247.0 Accrued expenses and other current liabilities $ 905.6 $ 907.3 (1) Includes expenses related to the Company’s non-qualified deferred compensation plan that covers most management and other highly-compensated employees. See Note 12, “Commitments and Contingencies.” Note 10—Long-Term Debt The table below presents long-term debt, net of current maturities, debt discounts, and issuance costs: December 31, (in millions) 2025 2024 Amended Credit Facilities: Amended Revolving Credit Facility due 2027 $ 570.0 $ — Amended Term Loan A Facility due 2027 453.8 481.3 Amended Term Loan B Facility due 2029 965.0 975.0 5.625 % Notes due 2027 400.0 400.0 4.125 % Notes due 2029 400.0 400.0 2.75 % Convertible Notes due 2026 106.7 330.5 Other long-term obligations 8.6 210.5 2,904.1 2,797.3 Less: Current maturities of long-term debt ( 38.2 ) ( 38.2 ) Less: Debt discounts and debt issuance costs ( 17.0 ) ( 26.6 ) $ 2,848.9 $ 2,732.5 The following is a schedule of future minimum repayments of long-term debt as of December 31, 2025: (in millions) Years ending December 31: 2026 $ 145.0 2027 1,407.0 2028 10.8 2029 1,335.8 2030 0.8 Thereafter 4.7 Total minimum payments $ 2,904.1 83 Table of Contents Amended Credit Facilities On May 3, 2022, the Company entered into an agreement with its various lenders to amend and restate its previous credit agreement (the “Second Amended and Restated Credit Agreement”). The Second Amended and Restated Credit Agreement provides for a $ 1.0 billion revolving credit facility, (the “Amended Revolving Credit Facility”), a five-year $ 550.0 million term loan A facility (the “Amended Term Loan A Facility”) and a seven-year $ 1.0 billion term loan B facility (the “Amended Term Loan B Facility”) (together, the “Amended Credit Facilities”). The proceeds from the Amended Credit Facilities were used to repay the balances of the previous credit facilities. The interest rates per annum applicable to loans under the Amended Credit Facilities are, at the Company’s option, equal to either an adjusted secured overnight financing rate (“Term SOFR”) or a base rate, plus an applicable margin. The applicable margin for each of the Amended Revolving Credit Facility and the Amended Term Loan A Facility ranges from 2.25 % to 1.50 % per annum for Term SOFR loans and 1.25 % to 0.50 % per annum for base rate loans, in each case depending on the Company’s total net leverage ratio (as defined within the Second Amended and Restated Credit Agreement). The applicable margin for the Amended Term Loan B Facility was 2.75 % per annum for Term SOFR loans and 1.75 % per annum for base rate loans until the margins were both reduced by 25 basis points pursuant to the Second Amendment Agreement, as discussed and defined below, and effective December 4, 2024. The Amended Term Loan B Facility is subject to a Term SOFR “floor” of 0.50 % per annum and a base rate “floor” of 1.50 % per annum. In addition, the Company pays a commitment fee on the unused portion of the commitments under the Amended Revolving Credit Facility at a rate that ranges from 0.35 % to 0.20 % per annum, depending on the Company’s total net leverage ratio (as defined within the Second Amended and Restated Credit Agreement). The Amended Credit Facilities contain customary covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and certain of its subsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations, pay dividends and make other restricted payments and prepay certain indebtedness that is subordinated in right of payment to the obligations under the Amended Credit Facilities. The Amended Credit Facilities contain two financial covenants: a maximum total net leverage ratio (as defined within the Second Amended and Restated Credit Agreement) of 4.50 to 1.00, which is subject to a step up to 5.00 to 1.00 in the case of certain significant acquisitions, and a minimum interest coverage ratio (as defined within the Second Amended and Restated Credit Agreement) of 2.00 to 1.00. The Amended Credit Facilities also contain certain customary affirmative covenants and events of default, including the occurrence of a change of control (as defined in the documents governing the Second Amended and Restated Credit Agreement), termination, and certain defaults under the Master Leases, which are discussed in Note 11, “Leases.” On December 4, 2024 (the “Second Amendment Effective Date”), PENN entered into a Second Amendment (the “Second Amendment Agreement”) with its various lenders to reduce the interest rate margins applicable to the Company’s approximately $ 978.0 million in existing Amended Term Loan B Facility loans from 2.75 % to 2.50 % for Term SOFR loans, and from 1.75 % to 1.50 % for base rate loans. As of December 31, 2025, the Company had $ 570.0 million drawn on the Amended Revolving Credit Facility. No amounts were drawn on the revolver as of December 31, 2024. As of December 31, 2025 and 2024, the Company had conditional obligations under letters of credit issued pursuant to the Amended Credit Facilities with face amounts aggregating to $ 23.9 million and $ 20.9 million, respectively, resulting in $ 406.1 million and $ 979.1 million of available borrowing capacity under the Amended Revolving Credit Facility, respectively. As of February 25, 2026, the Company had $ 565.0 million in outstanding borrowings under its Amended Revolving Credit Facility, resulting in $ 411.1 million in available borrowing capacity. 5.625 % Senior Unsecured Notes On January 19, 2017, the Company completed an offering of $ 400.0 million aggregate principal amount of  5.625 % senior unsecured notes that mature on January 15, 2027 (the “ 5.625 % Notes”) at a price of par. Interest on the  5.625 % Notes is payable semi-annually on January 15th and July 15th of each year. The  5.625 % Notes are not guaranteed by any of the Company’s subsidiaries except in the event that the Company, in the future, issues certain subsidiary-guaranteed debt securities. The Company may redeem the  5.625 % Notes at any time, beginning on or after January 15, 2022, at the declining redemption premiums set forth in the indenture governing the  5.625 % Notes. 84 Table of Contents 4.125 % Senior Unsecured Notes On July 1, 2021, the Company completed an offering of $ 400.0 million aggregate principal amount of 4.125 % senior unsecured notes that mature on July 1, 2029 (the “ 4.125 % Notes”). The  4.125 % Notes were issued at par and interest is payable semi-annually on January 1st and July 1st of each year. The  4.125 % Notes are not guaranteed by any of the Company’s subsidiaries except in the event that the Company, in the future, issues certain subsidiary-guaranteed debt securities. The Company may redeem the  4.125 % Notes at any time on or after July 1, 2024, at the declining redemption premiums set forth in the indenture governing the  4.125 % Notes, and, prior to July 1, 2024, at a “make-whole” redemption premium set forth in the indenture governing the  4.125 % Notes. 2.75 % Unsecured Convertible Notes In May 2020, the Company completed a public offering of $ 330.5 million aggregate principal amount of 2.75 % unsecured convertible notes (the “Convertible Notes”) that mature, unless earlier converted, redeemed or repurchased, on May 15, 2026 at a price of par. After underwriting fees and discounts, net proceeds received by the Company were $ 322.2 million. Interest on the Convertible Notes is payable semi-annually on May 15 and November 15. On June 13, 2025, the Company entered into separate and privately negotiated agreements with certain holders of the Convertible Notes to repurchase $ 223.8 million aggregate principal amount of the Convertible Notes. The repurchases were completed on June 20, 2025, and the Company recorded an $ 11.8 million loss on the early extinguishment of debt during the year ended December 31, 2025, which is included in “Loss on early extinguishment of debt” within the Consolidated Statements of Operations. As of December 31, 2025, the Convertible Notes are scheduled to mature within the next twelve months. However, the Company has classified this obligation as long-term based on its intent and ability to refinance on a long-term basis. The Convertible Notes are convertible into shares of the Company’s common stock at an initial conversion price of $ 23.40 per share, or 42.7350 shares, per $1,000 principal amount of Convertible Notes, subject to adjustment if certain corporate events occur. However, in no event will the conversion rate exceed 55.5555 shares of common stock per $1,000 principal amount of Convertible Notes. As of December 31, 2025, the maximum number of shares that could be issued to satisfy the conversion feature of the Convertible Notes is 5,928,661 . Starting on February 15, 2026, holders may convert the Convertible Notes at any time until the close of business on the second scheduled trading day immediately before May 15, 2026. The Convertible Notes may, at the Company’s election, be settled upon conversion in cash, shares of common stock of the Company, or a combination thereof. Beginning on November 20, 2023, the Company has the option to redeem the Convertible Notes, in whole or in part, subject to certain specified conditions. In addition, holders may require the Company to repurchase the Convertible Notes upon the occurrence of certain corporate events that constitute a fundamental change under the indenture governing the Convertible Notes at a purchase price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the date of repurchase, subject to the terms therein. In connection with certain corporate events or if the Company issues a notice of redemption, the conversion rate will, under certain circumstances, be increased as set forth in the indenture governing the Convertible Notes. As of December 31, 2025, none of the Convertible Notes have been converted into shares of the Company’s common stock. The Convertible Notes consisted of the following components: December 31, (in millions) 2025 2024 Liability: Principal $ 106.7 $ 330.5 Unamortized debt issuance costs ( 0.2 ) ( 2.6 ) Net carrying amount $ 106.5 $ 327.9 85 Table of Contents Interest expense, net The table below presents interest expense, net: For the year ended December 31, (in millions) 2025 2024 2023 Interest expense $ 447.6 $ 487.1 $ 469.6 Capitalized interest ( 41.8 ) ( 16.6 ) ( 4.9 ) Interest expense, net $ 405.8 $ 470.5 $ 464.7 The table below presents interest expense related to the Convertible Notes: For the year ended December 31, (in millions) 2025 2024 2023 Coupon interest $ 5.8 $ 9.1 $ 9.1 Amortization of debt issuance costs 1.1 1.8 1.7 Convertible Notes interest expense $ 6.9 $ 10.9 $ 10.8 Debt issuance costs will be amortized to interest expense through May 2026, the remaining term of the Convertible Notes, at an effective interest rate of 3.3 %. Covenants Our Amended Credit Facilities, 5.625 % Notes, and 4.125 % Notes, require us, among other obligations, to maintain specified financial ratios and to satisfy certain financial tests. In addition, our Amended Credit Facilities, 5.625 % Notes, and 4.125 % Notes, restrict, among other things, our ability to incur additional indebtedness, incur guarantee obligations, amend debt instruments, pay dividends, create liens on assets, make investments, engage in mergers or consolidations, and otherwise restrict corporate activities. Our debt agreements also contain customary events of default, including cross-default provisions that require us to meet certain requirements under the Master Leases (which are discussed in Note 11, “Leases” ), each with GLPI. 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, 2025, the Company was in compliance with all required financial covenants. The Company believes that it will remain in compliance with all of its required financial covenants for at least the next 12 months following the date of filing this Annual Report on Form 10-K with the SEC. Other Long-Term Obligation In February 2021, we entered into a third-party financing arrangement providing the Company with upfront and non-refundable cash proceeds of $ 72.5 million while permitting us to participate in future proceeds on certain claims for insurance coverage benefits from the Company’s insurers (the “Insurers”) for economic losses PENN sustained due to the COVID-19 pandemic. On May 7, 2025, the Superior Court of Pennsylvania (the “SCP”) issued a ruling on the Company’s appeal of a lower court’s summary judgment that found in favor of the Insurers, affirming the lower court’s ruling. As a result of the SCP’s ruling, the Company has determined that obligations under these claims are no longer probable. Accordingly, during the quarter ended March 31, 2025, we recognized a non-cash gain, which consists of the cash proceeds received in 2021 of $ 72.5 million and $ 142.6 million of accreted non-cash interest. The gain is recorded as “Gain on financing arrangement” within the Consolidated Statements of Operations for the year ended December 31, 2025. Prior to recognizing the non-cash gain, as described above, the financing obligation was classified as a non-current liability and had a $ 201.2 million balance as of December 31, 2024. Consistent with an obligor’s accounting under a debt instrument, period interest was accreted using an effective interest rate of 27.0 % until the time that the claims and related obligations were resolved. The amount included in “Interest expense, net” related to this obligation was $ 13.9 million, $ 47.1 million, and $ 36.1 million for the years ended December 31, 2025, 2024, and 2023, respectively. 86 Table of Contents Note 11—Leases Master Leases The components contained within the Master Leases are accounted for as either (i) operating leases, (ii) finance leases, or (iii) financing obligations. Changes to future lease payments that are not fixed within the Master Leases (i.e., when future escalators become known or future variable rent resets occur), which are discussed below, require the Company to either (i) increase both the ROU assets and corresponding lease liabilities with respect to operating and finance leases or (ii) record the incremental variable payment associated with the financing obligation to interest expense. AR PENN Master Lease On February 21, 2023, the Company and GLPI entered into an agreement to amend and restate the triple net master lease dated November 1, 2013 (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). Subsequent to the execution of the AR PENN Master Lease, the lease contains real estate assets associated with 14 of the Company’s gaming facilities used in its operations. The current term of the AR PENN Master Lease expires on October 31, 2033 and thereafter contains three renewal periods of five years each on the same terms and conditions, exercisable at the Company’s option. The AR PENN Master Lease along with the 2023 Master Lease (as defined and discussed below) are cross-defaulted, cross-collateralized, and coterminous, and subject to a parent guarantee. The payment structure under the AR PENN Master Lease includes a fixed component, a portion of which is subject to an annual escalator of up to 2 %, depending on the Adjusted Revenue to Rent Ratio (as defined in the AR PENN Master Lease) of 1.8 :1, and a component that is based on performance, which is prospectively adjusted every five years by an amount equal to 4 % of the average change in net revenues of all properties associated with the AR PENN Master Lease compared to a contractual baseline during the preceding five years (“AR PENN Percentage Rent”). The land and building components contained within the AR PENN Master Lease are classified as operating leases and the related expenses are included in “General and administrative” within the Consolidated Statements of Operations. As a result of the annual escalator, effective as of November 1 for the lease years ended October 31, the fixed components of rent and an additional ROU asset and corresponding lease liability were recognized as follows: (in millions) 2025 2024 2023 Annual escalator $ 4.3 $ 4.2 $ 4.2 Operating ROU asset and lease liability recognized $ 25.6 $ 27.2 $ 28.7 The AR PENN Percentage Rent most recently reset on November 1, 2023, and will be effective until the next AR PENN Percentage Rent reset, scheduled to occur on November 1, 2028. As a result of the AR PENN Percentage Rent reset for the lease year ended October 31, 2023, the performance-based component of rent and an additional ROU asset and corresponding lease liability were recognized as follows: (in millions) 2023 Reduction to the performance-based component of rent $ 4.4 Operating ROU asset and lease liability recognized $ 117.4 The execution of the AR PENN Master Lease, as described above, constituted a modification under ASC 842, which required us to reassess the classifications of the lease components and remeasure the associated lease liabilities. We concluded the lease term should end at the current lease expiration date of October 31, 2033 and the optional three renewal periods of five years each were not included in the lease term. The Company continues to evolve from a leading retail gaming operator to a leading provider of integrated entertainment, sports content, and casino gaming experiences. The execution of our omni-channel strategy continues to diversify our earning streams and precluded us from concluding all renewal options were reasonably assured to be exercised. 87 Table of Contents As a result of the January 1, 2023 lease modification, we concluded (i) the land components contained within the AR PENN Master Lease, which were previously primarily classified as finance leases, to be classified as operating leases, and (ii) control of the building assets have transferred from the Company to the lessor allowing for sale recognition in accordance with ASC 842 which results in the building components to be classified as operating leases. Prior to the January 1, 2023 lease modification event, control of substantially all of the building components were concluded not to have passed from the Company to the lessor in accordance with ASC 842 which required recognition of a financing obligation in accordance with ASC 470 and continued recognition of the underlying asset in “Property and equipment, net” within our Consolidated Balance Sheets. In conjunction with the sale recognition on the building components, we (i) derecognized $ 1.6 billion of financing obligations within our Consolidated Balance Sheets, offset to “Gain on REIT transactions, net” within our Statements of Operations; and (ii) derecognized $ 1.1 billion of “Property and equipment, net” associated with the building assets within our Consolidated Balance Sheets, offset to “Gain on REIT transactions, net” within our Consolidated Statements of Operations. As a result of our measurement of the associated operating lease liabilities, we recognized a reduction of the ROU assets and corresponding lease liabilities of $ 1.2 billion within our Consolidated Balance Sheets as of January 1, 2023. 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”). 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. The 2023 Master Lease and AR PENN Master Lease are cross-defaulted, cross-collateralized, and coterminous, and subject to a parent guarantee. The AR PENN Master Lease and the 2023 Master Lease are coterminous. As such, consistent with the AR PENN Master Lease, we concluded the 2023 Master Lease term ends at the current lease expiration date of October 31, 2033 and does not include any of the remaining three renewal periods of five years each. (See the above lease term discussion associated with the AR PENN Master Lease.) As a result of our lease classification assessment, we concluded all land and building components contained within the 2023 Master Lease to be operating leases. As a result of our measurement of the operating lease liabilities, we recognized ROU assets and corresponding lease liabilities of $ 1.8 billion. Additionally, the 2023 Master Lease terminated the individual triple net leases with GLPI for the real estate assets associated with Perryville and Meadows, as such we (i) derecognized $ 171.9 million in ROU assets within our Consolidated Balance Sheets; (ii) derecognized $ 165.5 million in lease liabilities within our Consolidated Balance Sheets; and (iii) recognized a $ 6.5 million loss on the termination which is included in “Gain on REIT transactions, net” within our Consolidated Statements of Operations. Expenses related to lease components classified as operating leases are included in “General and administrative” within our Consolidated Statements of Operations. The 2023 Master Lease includes a 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 the relocation of our 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 development projects with respect to Joliet (the “Joliet Project”), M Resort (the “M Resort Project”), and Columbus (the “Columbus Project” and together with the Joliet Project and M Resort Project, the “Other Development Projects,” and together with the Aurora Project, referred to as the “PENN Development Projects”). The Master Development Agreement provides that GLPI will fund up to $ 225.0 million for the Aurora Project and, upon our request, up to $ 350.0 million in aggregate for the Other Development Projects, as discussed below. 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 is subject to an annual fixed escalator rent increase of 1.5 % which began on November 1, 2023 and will continue to increase annually thereafter. 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 PENN Development Projects still under construction are all subject to necessary regulatory and other government approvals. 88 Table of Contents On August 1, 2025, the Company received the full $ 130.0 million in committed funding from GLPI for the Joliet Project which opened on August 11, 2025, and on November 3, 2025, the Company received the full $ 150.0 million in committed funding from GLPI for the M Resort Project, of which the new hotel tower opened on December 1, 2025. Effective August 1, 2025, we determined that the sale-and-lease back of real estate assets related to the new Joliet facility to GLPI for $ 130.0 million constituted a lease modification under ASC 842. In connection with the August 1, 2025 lease modification, the Company reassessed the land and building components contained within the 2023 Master Lease and remeasured the related lease liabilities. The assessment and remeasurement included the following elements: (i) the removal of the previously leased Joliet facility assets; (ii) the addition of the newly leased Joliet facility assets; and (iii) a $ 10.1 million increase in annual rent, which is specific to the lease back of the real estate assets related to the new Joliet facility, subject to annual escalation in accordance with the 2023 Master Lease. The modification did not result in a change to the lease classification and all lease components continue to be accounted for as operating leases. Remeasurement of the related operating lease liabilities resulted in a $ 3.3 million gain, recognized in “Gain on REIT transactions, net” in the Consolidated Statements of Operations. As of the modification date, the Company recognized $ 166.3 million in ROU assets and $ 163.0 million in corresponding lease liabilities in the Consolidated Balance Sheets. Effective November 3, 2025, we also determined that the sale-and-lease back of real estate assets related to the new M Resort hotel tower to GLPI for $ 150.0 million constituted a lease modification under ASC 842. In connection with the November 3, 2025 lease modification, the Company reassessed the land and building components contained within the 2023 Master Lease and remeasured the related lease liabilities. The assessment and remeasurement included an $ 11.7 million increase in annual rent, which is specific to the lease back of the real estate assets related to the new M Resort hotel tower, subject to annual escalation in accordance with the 2023 Master Lease. The modification did not result in a change to the lease classification and all lease components continue to be accounted for as operating leases. As of the modification date, the Company recognized an additional ROU asset and corresponding lease liability of $ 94.0 million in the Consolidated Balance Sheets. With respect to both the August 1, 2025 and November 3, 2025 lease modifications, we concluded the lease term ends at the current lease expiration date of October 31, 2033, and that the three optional five-year renewal periods are not included in the lease term. As the Company continues to transition from a leading retail gaming operator to a diversified provider of integrated entertainment, sports content, and casino gaming experiences, the execution of its omni-channel strategy has diversified earnings streams and does not provide reasonable assurance that the renewal options will be exercised. We have neither requested nor received any funding from GLPI for the Aurora Project. We did not request or receive any funding from GLPI for the Columbus Project, and GLPI’s funding commitment expired on December 31, 2025. Pinnacle Master Lease In connection with the acquisition of Pinnacle Entertainment, Inc. 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. 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. The Company has determined that the lease term is 32.5 years. The payment structure under the Pinnacle Master Lease includes a fixed component, a portion of which is subject to an annual escalator of up to 2 %, depending on the Adjusted Revenue to Rent Ratio (as defined in the Pinnacle Master Lease) of 1.8 :1, and a component that is based on performance of the properties, which is prospectively adjusted every two years by an amount equal to 4 % of the average change in net revenues compared to a contractual baseline during the preceding two years (“Pinnacle Percentage Rent”). As a result of the annual escalator test, effective as of May 1 for the lease years ended April 30, the fixed components of rent and an additional ROU asset and corresponding lease liability were recognized as follows: (in millions) 2025 (1) 2024 2023 Annual escalator $ — $ 4.8 $ 4.7 Finance ROU asset and lease liability recognized $ — $ 33.4 $ 33.3 (1) We did not incur an annual escalator for the lease year ended April 30, 2025. 89 Table of Contents The Pinnacle Percentage Rent most recently reset on May 1, 2024 and will be effective until the next Pinnacle Percentage Rent reset, scheduled to occur on May 1, 2026. As a result of the Pinnacle Percentage Rent reset for the lease year ended April 30, 2024, the performance-based component of rent and an additional ROU asset and corresponding lease liability were recognized as follows: (in millions) 2024 Increase to the performance-based component of rent $ 3.8 Finance ROU asset and lease liability recognized $ 29.6 The Pinnacle Master Lease contains land and building components that are classified as finance leases and financing obligations. Expenses related to lease components classified as finance leases are recorded to “Depreciation and amortization” and “Interest expense, net” within the Consolidated Statements of Operations. The Company recognizes interest expense on the lease payments related to the financing obligation under the effective yield method. Other Triple Net Leases with REIT Landlords VICI Master Lease On December 4, 2025, the Company entered into a triple net master lease with VICI Properties Inc. (NYSE: VICI) (“VICI”) (“VICI Master Lease”) which amended and restated the Margaritaville Lease and the Greektown Lease (both as defined below) into a single combined lease. The VICI Master Lease has an initial term through May 23, 2034, with four subsequent five-year renewal periods on the same terms and conditions, exercisable at the Company’s option. Upon execution of the VICI Master Lease, initial annual rent was set at $ 80.7 million, representing the aggregate annual rent under the Margaritaville Lease and the Greektown Lease in effect immediately prior to December 4, 2025. Annual rent will increase by 1.0 % to $ 81.5 million effective June 1, 2026 and, thereafter, will be subject to an annual escalator of up to 1.0 % each June 1, depending on a minimum coverage floor ratio of Net Revenue to Rent to be determined over the performance period from June 1, 2025 to May 31, 2026 (as defined within the VICI Master Lease). We determined that the execution of the VICI Master Lease constituted a lease modification under ASC 842. As such, the Company reassessed the land and building components and remeasured the related lease liabilities. The modification did not result in a change to the lease classification, and all lease components continue to be accounted for as operating leases. As of the modification date, the Company recognized an additional ROU asset and corresponding lease liability of $ 53.5 million in our Consolidated Balance Sheets. With respect to the December 4, 2025 lease modification, we concluded that the lease term ends on May 23, 2034, the expiration of the initial 15-year lease period and that the four optional five-year renewal periods are not included in the lease term. As the Company continues to transition from a leading retail gaming operator to a diversified provider of integrated entertainment, sports content, and casino gaming experiences, the execution of its omni-channel strategy has diversified earnings streams and does not provide reasonable assurance that the renewal options will be exercised. Margaritaville Lease Prior to the execution of the VICI Master Lease as described above, on January 1, 2019, the Company had entered into an individual triple net lease with VICI for the real estate assets used in the operations of Margaritaville Resort Casino (the “Margaritaville Lease”). The Margaritaville 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 payment structure under the Margaritaville Lease included a fixed component, a portion that was subject to an annual escalator of up to 2 % depending on a minimum coverage floor ratio of Net Revenue to Rent of 6.1 :1, and a component that was based on performance, which was prospectively adjusted every two years by an amount equal to 4 % of the average change in net revenues of the property compared to a contractual baseline during the preceding two years (“Margaritaville Percentage Rent”). As a result of the annual escalator test, effective as of February 1 for the lease years ended January 31, the fixed components of rent and an additional ROU asset and corresponding lease liability were recognized as follows: (in millions) 2025 2024 2023 Annual escalator $ 0.4 $ 0.4 $ 0.4 Operating ROU asset and lease liability recognized $ 2.5 $ 2.7 $ 2.8 90 Table of Contents The Margaritaville Percentage Rent reset on February 1, 2025. As a result of the Margaritaville Percentage Rent resets for the lease years ended January 31, the performance-based component of rent and an additional ROU asset and corresponding lease liability were recognized as follows: (in millions) 2025 2024 2023 Increase (decrease) to the performance-based component of rent $ ( 0.4 ) N/A $ 2.3 Operating ROU asset and lease liability recognized $ 9.0 N/A $ 9.8 N/A - There was no Margaritaville Percentage Rent reset scheduled for this period. Prior to the effective date of the VICI Master Lease, the land and building components within the Margaritaville Lease were classified as operating leases and the related expenses were included in “General and administrative” within our Consolidated Statements of Operations. Greektown Lease Prior to the execution of the VICI Master Lease as described above, on May 23, 2019, the Company had entered into an individual triple net lease with VICI for the real estate assets used in the operations of Greektown (the “Greektown Lease”). The Greektown 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 payment structure under the Greektown Lease included a fixed component, a portion subject to an annual escalator of up to 2 % initially determined based on an Adjusted Revenue to Rent ratio, as defined in the Greektown Lease, and subsequently amended to be determined based on an agreed upon minimum coverage floor ratio of Net Revenue to Rent, and a component that was based on performance, which was prospectively adjusted every two years by an amount equal to 4 % of the average change in net revenues of the property compared to a contractual baseline during the preceding two years (“Greektown Percentage Rent”). We did not incur an annual escalator for the lease years ended May 31, 2025, 2024, and 2023. The Greektown Percentage Rent reset on June 1, 2025. As a result of the Greektown Percentage Rent resets for the lease years ended May 31, the performance-based component of rent and an additional ROU asset and corresponding lease liability were recognized as follows: (in millions) 2025 2024 2023 Increase to the performance-based component of rent $ 1.1 N/A $ 1.5 Operating ROU asset and lease liability recognized $ 9.0 N/A $ 7.0 N/A - There was no Greektown Percentage Rent reset scheduled for this period. Prior to the effective date of the VICI Master Lease, the land and building components within the Greektown Lease were classified as operating leases and the related expenses were included in “General and administrative” within our Consolidated Statements of Operations. Morgantown Lease On October 1, 2020, the Company entered into an individual triple net lease with a subsidiary of GLPI for the land underlying our development project in Morgantown, Pennsylvania (“Morgantown Lease”) in exchange for $ 30.0 million in rent credits. The initial term of the Morgantown Lease is 20 years with six subsequent, five-year renewal periods, exercisable at the Company’s option. Initial annual rent under the Morgantown Lease is $ 3.0 million, subject to a 1.50 % fixed annual escalation in each of the first three years subsequent to the facility opening, which occurred on December 22, 2021. Thereafter, the lease will be subject to an annual escalator consisting of either (i) 1.25 %, if the consumer price index increase is greater than 0.50 %, or (ii) zero , if the consumer price index increase is less than 0.50 %. All improvements made on the land, including the constructed building, will be owned by the Company while the lease is in effect, however, on the expiration or termination of the Morgantown Lease, ownership of all tenant improvements on the land will transfer to GLPI. We concluded control of the land underlying the Morgantown facility was not passed from the Company to the lessor in accordance with ASC 842. As such we recognized a financing obligation in accordance with ASC 470 and continue to recognize the underlying land asset in “Property and equipment, net” within our Consolidated Balance Sheets. The Company recognizes interest expense on the lease payments related to the financing obligation under the effective yield method. 91 Table of Contents We refer to the Master Leases, VICI Master Lease, Margaritaville Lease (prior to December 4, 2025), Greektown Lease (prior to December 4, 2025), and Morgantown Lease, collectively, as our “Triple Net Leases.” Non-REIT Operating Leases In addition to any operating lease components contained within the Master Leases, VICI Master Lease, Margaritaville Lease (prior to December 4, 2025), and Greektown Lease (prior to December 4, 2025, and collectively referred to as “triple net operating leases”), the Company’s operating leases consist of (i) ground and levee leases to landlords which were not assumed by our REIT Landlords and remain an obligation of the Company; and (ii) buildings and equipment not associated with our REIT Landlords. Certain of our lease agreements include rental payments based on a percentage of sales over specified contractual amounts, rental payments adjusted periodically for inflation, and rental payments based on usage. The Company’s leases include options to extend the lease terms. The Company’s operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. Information related to lease term and discount rate was as follows: December 31, 2025 2024 Weighted-Average Remaining Lease Term Operating leases 9.2 years 10.2 years Finance leases 25.3 years 26.3 years Financing obligations 25.6 years 26.6 years Weighted-Average Discount Rate Operating leases 7.1 % 7.7 % Finance leases 5.2 % 5.2 % Financing obligations 5.2 % 5.2 % The components of lease expense were as follows: Location on Consolidated Statements of Operations For the year ended December 31, (in millions) 2025 2024 2023 Operating Lease Costs Rent expense associated with triple net operating leases (1) General and administrative $ 631.7 $ 620.1 $ 591.1 Operating lease cost (2) Primarily General and administrative 16.9 19.3 22.4 Short-term lease cost Primarily Gaming expense 102.2 91.2 81.2 Variable lease cost (2) Primarily Gaming expense 3.2 3.4 3.6 Total $ 754.0 $ 734.0 $ 698.3 Finance Lease Costs Interest on lease liabilities (3) Interest expense, net $ 109.5 $ 110.8 $ 110.6 Amortization of ROU assets (3) Depreciation and amortization 91.0 89.8 87.5 Total $ 200.5 $ 200.6 $ 198.1 Financing Obligation Costs Interest on financing obligations (4) Interest expense, net $ 147.9 $ 148.5 $ 146.6 (1) Consists of the following: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease (for the period January 1, 2023 to December 3, 2025); (iv) Greektown Lease (for the period January 1, 2023 to December 3, 2025); and (v) VICI Master Lease (beginning December 4, 2025). (2) Excludes the operating lease costs and variable lease costs pertaining to our triple net leases with our REIT landlords classified as operating leases, discussed in footnote (1) above. (3) Pertains to the finance lease components associated with the Pinnacle Master Lease (land). (4) Pertains to the components contained within the Pinnacle Master Lease (buildings) and the Morgantown Lease. 92 Table of Contents Supplemental cash flow information related to leases was as follows: For the year ended December 31, (in millions) 2025 2024 2023 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ 109.5 $ 110.8 $ 110.6 Operating cash flows from operating leases $ 632.4 $ 620.1 $ 609.9 Financing cash flows from finance leases $ 53.4 $ 50.3 $ 47.1 Non-cash lease activities: Commencement of operating leases $ 480.0 $ 29.9 $ 3,820.4 Derecognition of operating lease liabilities $ 122.2 $ — $ 307.7 Commencement of finance leases $ 1.0 $ 63.0 $ 33.3 Derecognition of finance lease liabilities $ — $ — $ 2,933.6 Derecognition of finance obligations $ — $ — $ 1,567.8 Total payments made under the Triple Net Leases were as follows: For the year ended December 31, (in millions) 2025 2024 2023 AR PENN Master Lease $ 288.8 $ 284.6 $ 284.1 2023 Master Lease 245.9 236.2 232.8 Pinnacle Master Lease 349.6 346.7 339.4 VICI Master Lease (1) 6.7 — — Margaritaville Lease (1) 24.6 26.8 26.2 Greektown Lease (1) 49.0 52.9 52.2 Morgantown Lease 3.2 3.2 3.1 Total $ 967.8 $ 950.4 $ 937.8 (1) Prior to December 4, 2025, lease payments made to VICI related to the Margaritaville and Greektown individual triple net leases; effective December 4, 2025, lease payments made to VICI relate to the VICI Master Lease. The following is a maturity analysis of our operating leases, finance leases, and financing obligations as of December 31, 2025: (in millions) Operating Leases Finance Leases Financing Obligations Years ending December 31: 2026 $ 654.2 $ 152.5 $ 166.6 2027 657.3 147.2 166.6 2028 656.2 147.1 166.6 2029 636.1 147.0 166.7 2030 639.7 146.9 166.7 Thereafter 2,265.6 2,980.1 3,496.6 Total lease payments 5,509.1 3,720.8 4,329.8 Less: Imputed interest ( 1,530.7 ) ( 1,657.7 ) ( 1,986.2 ) Present value of future lease payments 3,978.4 2,063.1 2,343.6 Less: Current portion of lease obligations ( 386.0 ) ( 45.7 ) ( 45.8 ) Long-term portion of lease obligations $ 3,592.4 $ 2,017.4 $ 2,297.8 93 Table of Contents Lessor The Company leases its hotel rooms to patrons and records the corresponding lessor revenue in “Food, beverage, hotel, and other revenues” within our Consolidated Statements of Operations. For the years ended December 31, 2025, 2024, and 2023, the Company recognized $ 253.3 million, $ 250.0 million, and $ 247.3 million of lessor revenues related to the rental of hotel rooms, respectively. Hotel leasing arrangements vary in duration but are short-term in nature. The cost and accumulated depreciation of property and equipment associated with hotel rooms is included in “Property and equipment, net” within our Consolidated Balance Sheets. Note 12—Commitments and Contingencies ESPN Sportsbook and Investment Agreements On August 8, 2023, PENN entered into the Sportsbook Agreement (the “Sportsbook Agreement”) with ESPN relating to OSB in the U.S. Pursuant to the Sportsbook Agreement, PENN received the exclusive right to use the ESPN BET trademark for OSB in the U.S. The Sportsbook Agreement had an initial 10-year term, with the right for either party to terminate the agreement after the third year if specific market share performance thresholds were not met. In consideration for the media marketing services and brand and other rights provided by ESPN, PENN agreed to pay $ 150.0 million per year in cash pursuant to the Sportsbook Agreement. In connection with the Sportsbook Agreement, PENN and ESPN also entered into an Investment Agreement (the “Investment Agreement”) on August 8, 2023. The Investment Agreement provided for the issuance to ESPN of certain warrants to purchase shares of PENN common stock, par value $ 0.01 per share, and set forth certain other governance rights of ESPN. Pursuant to the Investment Agreement PENN issued to ESPN warrants to purchase approximately 31.8 million shares of PENN common stock, subject to vesting (“Initial Warrants”). The warrants were classified as equity and contained three separate tranches. At the grant date, the $ 550.4 million fair value of the Initial Warrants was determined using the Black-Scholes option-pricing model with contractual terms ranging from 9.5 to 11.5 years, and strike prices ranging from $ 26.08 to $ 32.60 . Additionally, if after February 29, 2024 and during the term of the Sportsbook Agreement had PENN achieved specified performance conditions based on an average market share based on gross gaming revenue in the states in which the Sportsbook operated (as defined within the Investment Agreement), PENN would have issued to ESPN warrants to purchase up to an additional 6.4 million shares of PENN common stock (“Bonus Warrants”). On November 5, 2025, PENN and ESPN entered into the Termination Agreement to terminate the Sportsbook Agreement, effective December 1, 2025 (the “Termination Date”). Pursuant to the Termination Agreement, PENN’s exclusive right to use the ESPN BET trademark for OSB in the U.S. ended on the Termination Date. The Termination Agreement provided that PENN pay ESPN a total of $ 38.1 million in the fourth quarter of 2025 in respect of all remaining fees owed through the Termination Date. In addition, PENN paid ESPN a total of $ 5.0 million following the Termination Date for traditional media to support theScore Bet and/or Hollywood iCasino offerings. Per the Termination Agreement, these payments settled all outstanding payment obligations from PENN to ESPN under the Sportsbook Agreement. On November 5, 2025, in connection with the Termination Agreement, PENN and ESPN entered into Amendment No. 1 to the Investment Agreement (the “Investment Agreement Amendment”) to amend certain terms of the Investment Agreement. Pursuant to the Investment Agreement Amendment, effective November 5, 2025, the Initial Warrants were deemed vested through and including February 8, 2026, the unvested portion of each of the Initial Warrants held by ESPN were forfeited and cancelled for no consideration, and PENN did not issue any Bonus Warrants. As of November 5, 2025, ESPN held (i) a warrant to purchase 3,177,610 shares of PENN common stock with an expiration date of February 8, 2033 and an exercise price of $ 26.08 ; (ii) a warrant to purchase 3,200,930 shares of PENN common stock with an expiration date of February 8, 2034 and an exercise price of $ 29.99 ; and (iii) a warrant to purchase 1,578,670 shares of PENN common stock with an expiration date of February 8, 2035 and an exercise price of $ 32.60 . During the years ended December 31, 2025, 2024 , and 2023, the Company recognized expenses of $ 155.6 million, $ 179.2 million and $ 33.3 million , respectively, related to the Sportsbook Agreement, and $ 57.1 million, $ 67.9 million, and $ 12.5 million, respectively, related to the Investment Agreement. Expenses related to the Sportsbook Agreement and the Investment Agreement are recorded within “Gaming” expenses on the Consolidated Statements of Operations and recognized in accordance with ou r policies. See Note 2, “Significant Accounting Policies and Basis of Presentation” for further information. 94 Table of Contents Litigation The Company is subject to various legal and administrative proceedings relating to personal injuries, employment matters, commercial transactions, development agreements and other matters arising in the ordinary course of business. Although the Company maintains what it believes to be adequate insurance coverage to mitigate the risk of loss pertaining to covered matters, legal and administrative proceedings can be costly, time-consuming, and unpredictable. The Company does not believe that the final outcome of these matters will have a material adverse effect on its financial position, results of operations, or cash flows. Location Share Agreements Prairie State Gaming (“PSG”) enters into location share agreements with bar and retail establishments in Illinois. These agreements are contracts which allow PSG to place VGTs in the bar or retail establishment in exchange for a percentage of the variable revenue generated by the VGTs. PSG holds the gaming license with the state of Illinois and the location share percentage is determined by the state of Illinois. The Company records the location share payments to “Gaming” expense within the Consolidated Statements of Operations. For the years ended December 31, 2025, 2024, and 2023, the total location share payments made by PSG were $ 43.6 million, $ 45.0 million, and $ 45.3 million, respectively. Purchase Obligations The Company has obligations to purchase various goods and services totaling $ 473.4 million as of December 31, 2025, including $ 268.5 million which will be incurred in 2026. Purchase obligations totaled $ 1.0 billion as of December 31, 2024. The decrease over the prior year is primarily due to the termination of the Sportsbook Agreement with ESPN, as well as the opening of the Joliet Project and the M Resort project during the year ended December 31, 2025. See Note 11, “Leases” for further information. Capital Expenditure Commitments Pursuant to each of our Triple Net Leases, with the exception of our Morgantown Lease (which is a land lease we entered into on October 1, 2020 with GLPI as discussed in Note 11, “Leases” ), we are obligated to spend a minimum of 1 % of annual net revenues, in the aggregate under each lease, on the maintenance of such facilities. Additionally, during the year ended December 31, 2025, we had project capital expenditures of $ 408.4 million, the majority of which are in connection with the PENN Development Projects as a result of our Master Development Agreement with GLPI (also discussed in Note 11, “Leases” ), for which we received $ 280.0 million in funding from GLPI during the year ended December 31, 2025. We expect to incur additional capital expenditures in 2026 and 2027, and will receive up to $ 225.0 million in funding from GLPI for the Aurora Project. Employee Benefit Plans The Company maintains a qualified retirement plan under the provisions of Section 401(k) of the Internal Revenue Code of 1986, as amended, which covers all eligible employees (the “PENN 401(k) Plan”). The PENN 401(k) Plan enables participating employees to defer a portion of their salary in a retirement fund to be administered by the Company. The Company makes a discretionary match contribution, where applicable, of 50 % of employees’ elective salary deferrals, up to a maximum of 6 % of eligible employee compensation. The matching contributions to the PENN 401(k) Plan for the years ended December 31, 2025, 2024, and 2023 were $ 14.9 million, $ 14.7 million, and $ 13.4 million, respectively. We maintain a non-qualified deferred compensation plan (the “EDC Plan”) that covers most management and other highly-compensated employees. The EDC Plan was effective beginning March 1, 2001. The EDC Plan allows the participants to defer, on a pre-tax basis, a portion of their base annual salary and/or their annual bonus and earn tax-deferred earnings on these deferrals. The EDC Plan also provides for matching Company contributions that vest over a five-year period. The Company has established a trust, and transfers to the trust, on a periodic basis, an amount necessary to provide for its respective future liabilities with respect to participant deferral and Company contribution amounts. The Company’s matching contributions for the EDC Plan for the years ended December 31, 2025, 2024, and 2023 were $ 4.9 million, $ 4.7 million, and $ 4.3 million, respectively. Our deferred compensation liability, which is included in “Accrued expenses and other current liabilities” within the Consolidated Balance Sheets, was $ 119.3 million and $ 107.2 million as of December 31, 2025 and 2024, respectively. Labor Agreements We are required to have agreements with the horsemen at the majority of our racetracks to conduct our live racing and/or simulcasting activities. In addition, in order to operate gaming machines and table games in West Virginia, the Company must maintain agreements with each of the Charles Town horsemen, pari-mutuel clerks and breeders. 95 Table of Contents Note 13—Income Taxes The following table summarizes the tax effects of temporary differences between the Consolidated Financial Statements carrying amount of assets and liabilities and their respective tax basis, which are recorded at the prevailing enacted tax rate that will be in effect when these differences are settled or realized. These temporary differences result in taxable or deductible amounts in future years. The Company assessed all available positive and negative evidence to estimate whether sufficient future taxable income will be generated to realize our existing net deferred tax assets. The components of the Company’s deferred tax assets and liabilities were as follows: December 31, (in millions) 2025 2024 Deferred tax assets: Stock-based compensation expense $ 8.6 $ 6.7 Accrued expenses 121.8 156.5 Financing and operating leasing obligations 2,150.9 2,185.6 Unrecognized tax benefits 8.5 9.5 Investments in and advances to unconsolidated affiliates 12.2 15.5 Discount on convertible notes — 0.2 Net operating losses and tax credit carryforwards 217.8 171.8 Capital loss carryforwards 129.0 127.2 Interest limitation carryforwards 13.3 26.7 Gross deferred tax assets 2,662.1 2,699.7 Less: Valuation allowance ( 290.7 ) ( 268.0 ) Net deferred tax assets 2,371.4 2,431.7 Deferred tax liabilities: Property and equipment, not subject to the Master Leases ( 143.2 ) ( 73.6 ) Property and equipment, subject to the Master Leases ( 564.4 ) ( 593.4 ) Intangible assets ( 257.1 ) ( 298.4 ) Lease right-of-use assets ( 1,494.5 ) ( 1,527.3 ) Net deferred tax liabilities ( 2,459.2 ) ( 2,492.7 ) Long-term deferred tax liabilities, net $ ( 87.8 ) $ ( 61.0 ) The realizability of the net deferred tax assets is evaluated quarterly by assessing the need for a valuation allowance and by adjusting the amount of the allowance, if necessary. Pursuant to ASC 740, the Company considers all available (both quantitative and qualitative) positive and negative evidence including, but not limited to, statutory carryback periods, projected future taxable income, and feasible tax planning strategies that could be implemented as a source of positive evidence to realize the net deferred tax assets. In accordance with ASC 740, the most objectively verifiable form of evidence is to evaluate an entity’s three-year history of pre-tax book income or loss by jurisdiction. ASC 740 suggests that additional scrutiny should be given to deferred taxes of an entity with cumulative pre-tax book losses during the three most recent years and is considered significant negative evidence that is objectively verifiable and therefore, an entity would need sufficient quality and quantity to support a conclusion to overcome. The Company maintained a valuation allowance of $ 290.7 million as of December 31, 2025, against certain net deferred tax assets primarily related to (i) capital losses realized of $ 129.0 million, primarily related to the sale of Barstool; (ii) foreign jurisdictions that were in a three-year cumulative pre-tax loss position as of the balance sheet date of $ 112.2 million, inclusive of unrealized foreign currency translation adjustment; (iii) certain state net operating loss (“NOL”) carryforwards of $ 40.8 million; and (iv) other state deferred tax assets of $ 8.7 million. The Company intends to continue to maintain a valuation allowance on its net deferred tax assets until there is sufficient objectively verifiable positive evidence to support the realization of all or some portion of these deferred tax assets. In the event the Company determines that the deferred income tax assets would be realized in the future more than their net recorded amount, an adjustment to the valuation allowance would be recorded, which would reduce the provision for income taxes. 96 Table of Contents As of December 31, 2025, the Company had the following pre-tax carryforwards: (i) pre-tax U.S. federal NOL carryforwards of $ 191.6 million, of which $ 80.0 million will expire at various dates through 2037, and the residual being carried forward indefinitely; (ii) pre-tax foreign NOL carryforwards of $ 353.0 million that will expire through 2045; (iii) pre-tax capital losses of $ 514.1 million, the majority of which was generated from the Barstool divestiture and will expire in 2028; and (iv) pre-tax interest expense limitation carryforwards of $ 43.8 million that can be carried forward indefinitely. All acquired tax attributes are subject to limitations under the Internal Revenue Code and underlying Treasury Regulations. As of December 31, 2025, the Company also had $ 1.7 billion of pre-tax state NOL carryforwards, primarily generated in the Commonwealth of Pennsylvania, Colorado, Illinois, Indiana, Iowa, Louisiana, Maryland, Missouri, New Mexico, and localities within Ohio. The tax benefit associated with these NOL carryforwards was $ 73.8 million and a partial valuation allowance as mentioned above has been recorded due to negative evidence of certain statutory limitations and level of earnings projections in the respective jurisdictions. The majority of the state NOL carryforwards, existing as of December 31, 2025, will expire at various dates through December 31, 2045 with the remaining being carried forward indefinitely. In general, the Company has not recognized any U.S. tax expense on undistributed foreign earnings, as we intend to reinvest and expand into new markets outside the U.S. for the foreseeable future. If our intent changes or if these earnings are needed for our U.S. operations, we would be required to accrue and pay U.S. taxes on a portion or all of these undistributed earnings. It is not practicable to estimate the amount of deferred tax liability related to investments in these foreign subsidiaries. The undistributed foreign earnings were immaterial at December 31, 2025. The domestic and foreign components of income (loss) before income taxes were as follows: For the year ended December 31, (in millions) 2025 2024 2023 Domestic $ 85.9 $ ( 179.3 ) $ ( 382.6 ) Foreign ( 906.6 ) ( 162.0 ) ( 117.0 ) Total $ ( 820.7 ) $ ( 341.3 ) $ ( 499.6 ) The components of income tax benefit (expense) were as follows: For the year ended December 31, (in millions) 2025 2024 2023 Current tax benefit (expense) Federal $ — $ ( 25.6 ) $ ( 20.8 ) State 1.7 ( 4.7 ) ( 4.9 ) Foreign — 0.2 — Total current 1.7 ( 30.1 ) ( 25.7 ) Deferred tax benefit (expense) Federal ( 24.5 ) 53.9 13.2 State ( 2.4 ) 4.0 22.8 Foreign 0.6 0.2 ( 2.1 ) Total deferred ( 26.3 ) 58.1 33.9 Total income tax benefit (expense) $ ( 24.6 ) $ 28.0 $ 8.2 97 Table of Contents The following tables reconcile the statutory federal income tax rate to the actual effective income tax rate, and related amounts of income tax benefit (expense): For the year ended December 31, 2025 (in millions, except percentages) Amount Percent US Federal statutory income tax rate $ 172.3 21.00 % Domestic state and local income taxes, net of federal effect (1) 0.2 0.02 % Foreign tax effects Canada Statutory tax rate differential ( 54.3 ) ( 6.61 ) % Changes in valuation allowances ( 13.4 ) ( 1.63 ) % Goodwill impairment ( 123.3 ) ( 15.02 ) % Other adjustments ( 1.1 ) ( 0.13 ) % Tax credits 9.0 1.10 % Changes in valuation allowances ( 2.0 ) ( 0.25 ) % Nontaxable and nondeductible items Other adjustments ( 14.4 ) ( 1.75 ) % Worldwide change in unrecognized tax benefits 3.4 0.41 % Other adjustments ( 1.0 ) ( 0.14 ) % Effective tax rate $ ( 24.6 ) ( 3.00 ) % (1) In 2025, state and local income taxes in Louisiana and Pennsylvania represented the majority of domestic state and local income taxes, net of federal effect. For the year ended December 31, (in millions, except tax rates) 2024 2023 Amount of pre-tax income Federal statutory rate $ 71.7 $ 105.0 State and local income taxes, net of federal benefits 17.7 16.1 Nondeductible expenses ( 4.0 ) ( 48.5 ) Compensation ( 6.8 ) ( 7.2 ) Foreign 4.4 1.9 Valuation allowance ( 61.1 ) ( 56.4 ) Tax credits 5.9 4.9 Equity investment write-off — ( 2.6 ) Other 0.2 ( 5.0 ) Income tax benefit $ 28.0 $ 8.2 Effective tax rate 8.2 % 1.7 % 98 Table of Contents A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows: (in millions) Unrecognized tax benefits Unrecognized tax benefits as of January 1, 2023 $ 42.7 Additions based on prior year positions 2.2 Decreases due to settlements and/or reduction in reserves ( 1.3 ) Unrecognized tax benefits as of December 31, 2023 43.6 Additions based on prior year positions 1.4 Decreases due to settlements and/or reduction in reserves ( 3.1 ) Unrecognized tax benefits as of December 31, 2024 41.9 Additions based on prior year positions 0.7 Decreases due to settlements and/or reduction in reserves ( 5.2 ) Unrecognized tax benefits as of December 31, 2025 $ 37.4 During the year ended December 31, 2025, we did no t record any new tax reserves or accrued interest and penalties related to current year uncertain tax positions. Regarding prior year tax positions, we recorded $ 2.4 million of tax reserves and accrued interest and reversed $ 6.7 million of previously recorded tax reserves and accrued interest for uncertain tax positions. As of December 31, 2025 and 2024, unrecognized tax benefits, inclusive of accruals for income tax related interest and penalties, of $ 40.5 million and $ 44.8 million, respectively, were included in “Other long-term liabilities” within the Company’s Consolidated Balance Sheets. Overall, the Company recorded a net tax benefit of $ 3.4 million in connection with its uncertain tax positions for the year ended December 31, 2025. The liability for unrecognized tax benefits as of December 31, 2025 and 2024, included $ 32.0 million and $ 35.4 million, respectively, of tax positions that, if reversed, would affect the effective tax rate. We recognized expense of $ 0.2 million to interest and penalties, net of deferred taxes, as compared to income of $ 0.5 million and $ 0.2 million to interest and penalties, net of deferred taxes, for the years ended December 31, 2025, 2024 and 2023, respectively. We classify any income tax related penalties and interest accrued related to unrecognized tax benefits in “Income tax benefit (expense)” within the Consolidated Statements of Operations. The Company is currently in various stages of the examination process in connection with its open audits. Generally, it is difficult to determine when these examinations will be closed. As of December 31, 2025, the Company has open tax years 2022 through 2024 that could be subject to examination for U.S. federal income taxes. In addition, we are subject to state and local income tax examinations for various tax years in the taxing jurisdictions in which we operate. Such audits could result in increased tax liabilities and interest and penalties. While the Company believes its tax positions are appropriate, we cannot assure the outcome will remain consistent with our expectation. The Company believes we have adequately reserved for potential audit exposures of uncertain tax positions. In the event the final outcome of these matters is different than the amounts recorded, such differences will impact our income tax provision in the period in which the determination is made. As of December 31, 2025 and 2024, prepaid income taxes of $ 35.7 million and $ 31.9 million, respectively, were included in “Prepaid expenses” within the Company’s Consolidated Balance Sheets. 99 Table of Contents A reconciliation of income taxes paid (refunds received), net was as follows: (in millions) For the year ended December 31, 2025 Federal $ 4.3 State and Local Iowa ( 0.5 ) Michigan ( 0.3 ) Missouri 0.4 Pennsylvania 1.3 Other ( 0.2 ) Foreign Canada ( 0.3 ) Income taxes paid, net $ 4.7 For the years ended December 31, 2024 and 2023, income tax refunds received, net was $ 3.8 million, and income taxes paid, net was $ 73.9 million, respectively. The Company’s policy is to record interest and penalties related to income tax matters, as part of income tax expense. Tax Legislation On July 4, 2025, the One Big Beautiful Bill Act (“OBBB”) was enacted. The impacts were limited to timing differences, including bonus depreciation, accelerated research and experimental expenses, and utilization of interest carryforwards, with no material effect on the Company’s effective tax rate. The enactment lowered current year cash taxes, and the resulting current year federal net operating loss and tax credit carryforwards are expected to be fully utilized in future periods. Note 14—Stockholders' Equity Common and Preferred Stock In connection with the acquisition of Score Media and Gaming, Inc. (“theScore”) in October 2021, the Company issued 12,319,340 shares of PENN common stock with a par value of $ 0.01 , and 697,539 par value $ 0.01 of exchangeable shares through the capital of an indirect wholly-owned subsidiary of PENN (“Exchangeable Shares”), in addition to cash consideration. Each Exchangeable Share is exchangeable into one share of PENN common stock at the option of the holder, subject to certain adjustments. Upon the acquisition of theScore, certain employees of theScore elected to have their outstanding equity awards, which were assumed under theScore plan (as defined below), issued as Exchangeable Shares, once the shares vest or are exercised. In addition, the Company may redeem all outstanding Exchangeable Shares in exchange for shares of PENN common stock at any time following the fifth anniversary of the closing, or earlier under certain circumstances. During the year ended December 31, 2025, we did not issue Exchangeable Shares. During the years ended 2024, and 2023, we issued 68,048 , and 2,854 Exchangeable Shares, respectively. As of both periods ended December 31, 2025 and 2024, there were 768,441 Exchangeable Shares authorized, of which 379,821 shares and 466,534 shares were outstanding, respectively. In conjunction with the February 2020 stock purchase agreement between PENN and Barstool, the Company issued 883 shares of non-voting convertible Series D Preferred Stock, par value $ 0.01 , to certain individual stockholders affiliated with Barstool. The Series D Preferred stockholders were entitled to participate equally and ratably in all dividends and distributions paid to holders of PENN common stock based on the number of shares of PENN common stock into which such Series D Preferred Stock could convert. 1/1,000th of a share of Series D Preferred Stock was convertible into one share of PENN common stock. The Series D Preferred Stock was available for conversion into PENN common stock in tranches over four years . On February 17, 2023, as part of the Barstool Acquisition as discussed in Note 5, “Acquisitions and Dispositions,” the Company issued 2,442,809 shares of common stock with a par value of $ 0.01 , to certain former stockholders of Barstool (the “Share Consideration”). The issuance of the Share Consideration was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof, because such issuance did not involve a public offering. The Share Consideration was subject to transfer restrictions which were waived on August 11, 2023, pursuant to the Barstool SPA. See Note 5, “Acquisitions and Dispositions” for additional information related to the Barstool SPA. 100 Table of Contents On March 3, 2023, 227 shares of Series D Preferred Stock were converted to common stock. As a result of the conversion, the Company issued 226,800 shares of common stock with a par value of $ 0.01 . Pursuant to the Barstool SPA, on August 11, 2023, all remaining 354 outstanding shares of Series D Preferred Stock were converted to common stock. As a result of the conversion, the Company issued 353,800 shares of common stock with a par value of $ 0.01 . The issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act. As of both periods ended December 31, 2025 and 2024, there were 5,000 shares authorized of Series D Preferred Stock of which no shares were outstanding. The Company previously issued two series of preferred stock, Series B and Series C, each with a par value of $ 0.01 per share. As of both periods ended December 31, 2025 and 2024, there were 1,000,000 and 18,500 shares authorized of our Series B and Series C preferred stock, respectively. There were no shares outstanding of either Series B or Series C preferred stock as of both periods ended December 31, 2025 and 2024. Share Repurchase Authorization On February 1, 2022, the Board authorized a $ 750.0 million share repurchase program (the “February 2022 Authorization”). The repurchase authorization expired on January 31, 2025. On December 6, 2022, the Board authorized an additional $ 750.0 million share repurchase program (the “December 2022 Authorization”), which expired on December 31, 2025. On October 30, 2025, the Board approved a new $ 750.0 million share repurchase program, which commenced on January 1, 2026 and expires on December 31, 2028. 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. 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. During the year ended December 31, 2025, the Company repurchased 20,090,831 shares of its common stock in open market transactions for $ 354.4 million at an average price of $ 17.64 per share under the December 2022 Authorization. No shares of the Company’s common stock were repurchased during the year ended December 31, 2024. During the year ended December 31, 2023, the Company repurchased 5,438,221 shares of its common stock in open market transactions for $ 149.8 million at an average price of $ 27.54 per share under the February 2022 and December 2022 Authorizations. The cost of all repurchased shares is recorded to “Treasury stock” within the Consolidated Balance Sheets. Note 15—Stock-Based Compensation 2022 Long Term Incentive Compensation Plan On June 7, 2022, the Company’s shareholders, upon the recommendation of the Board, approved the Company’s 2022 Long Term Incentive Compensation Plan (the “2022 Plan”). The 2022 Plan authorizes the Company to issue stock options (incentive and/or non-qualified), stock appreciation rights (“SARs”), restricted stock (shares and/or units), performance awards (shares and/or units), and cash awards to executive officers, non-employee directors, other employees, consultants, and advisors of the Company and its subsidiaries. Non-employee directors and consultants are eligible to receive all such awards, other than incentive stock options. Pursuant to the 2022 Plan, an initial 6,870,000 shares of the Company’s common stock were reserved for issuance, plus any shares of common stock subject to outstanding awards under both the previous 2018 Long Term Incentive Compensation Plan, as amended (“2018 Plan”) and Score Media and Gaming Inc. Second Amended and Restated Stock Option and Restricted Stock Unit Plan (the “theScore Plan”) as of June 7, 2022, and outstanding awards that are forfeited or settled for cash under each of the prior plans. In connection with the approval of the 2022 Plan, the 2018 Plan and theScore Plan remain in place until all the awards previously granted thereunder have been paid, forfeited, or expired. However, no shares are available for issuance and all future equity awards will be granted pursuant to the 2022 Plan. On June 6, 2023, the Company’s shareholders, upon the recommendation of the Board, approved an amendment to the 2022 Plan (as amended, the “2022 Amended Plan”), which increased the number of shares reserved for issuance under the plan by 7,000,000 shares. On June 17, 2025, upon the recommendation of the Board, shareholders approved a second amendment to the 2022 Plan (as amended, the “2022 Plan – Second Amendment”). Among other changes, this amendment increased the total number of shares reserved for issuance to 22,067,275 shares. 101 Table of Contents For purposes of determining the number of shares available for issuance under the 2022 Plan – Second Amendment, stock options, restricted stock, and all other equity settled awards count against the 22,067,275 share limit as one share of common stock for each share granted. Any awards that are not settled in shares of common stock are not counted against the share limit. As of December 31, 2025, there are 9,309,563 shares available for future grants under the 2022 Plan – Second Amendment. Stock-based Compensation Expense Stock-based compensation expense pertains to our stock options and restricted stock, including restricted stock with performance and market conditions. For options, restricted stock, and performance awards, the expense is recognized ratably over the total requisite service period for the entire award, which is generally three to four years , based on the grant date fair value. We recognize forfeitures as they occur. For performance awards, the expense is adjusted based on the expectation of the achievement of the performance conditions. For awards with market conditions, we recognize the expense over the service period derived from the related valuation. The Company recognized $ 60.9 million, $ 52.9 million, and $ 85.9 million stock-based compensation expense for the years ended December 31, 2025, 2024, and 2023, respectively, which is included within the Consolidated Statements of Operations as a component of “General and administrative” expense. Stock Options Stock options are usually awarded to officers, directors and employees. The Company determines the grant date fair value of these options using the Black-Scholes option-pricing model. Typically, stock options are awarded with a ten-year contractual term. To fulfill stock option exercises, the Company issues new authorized common shares. The following table presents activity related to our stock options for the year ended December 31, 2025: Number of Stock Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in millions) Outstanding as of January 1, 2025 4,611,862 $ 28.07 Granted 810,502 $ 19.18 Exercised ( 30,701 ) $ 11.99 Expired ( 196,410 ) $ 30.05 Forfeited ( 8,704 ) $ 22.42 Outstanding as of December 31, 2025 5,186,549 $ 26.71 6.3 $ 0.1 Exercisable as of December 31, 2025 3,049,612 $ 28.72 5.0 $ 0.1 Expected to vest as of December 31, 2025 2,136,937 $ 23.84 8.2 $ 0.0 The following table presents information related to the fair value and intrinsic value of our stock options: For the year ended December 31, 2025 2024 2023 Weighted-average grant-date fair value of options $ 12.72 $ 15.28 $ 18.60 Aggregate intrinsic value of stock options exercised (in millions) $ 0.2 $ 1.2 $ 4.1 Fair value of stock options vested (in millions) $ 13.2 $ 11.6 $ 15.9 As of December 31, 2025, the unamortized compensation costs not yet recognized related to stock options granted totaled $ 19.8 million and the weighted-average period over which the costs are expected to be recognized was 1.4 years. 102 Table of Contents The following table provides the weighted-average assumptions used in the Black-Scholes option-pricing model: For the year ended December 31, 2025 2024 2023 Risk-free interest rate 4.38 % 4.07 % 3.88 % Expected volatility 77.30 % 75.96 % 74.85 % Dividend yield (1) — — — Weighted-average expected life (in years) 5.2 5.2 5.1 (1) The expected dividend yield is zero , as the Company has not historically paid dividends. Restricted Stock Awards and Restricted Stock Units As noted above, the Company grants restricted stock to our employees and certain non-employee directors. In addition, the Company issues its named executive officers (“NEOs”) and other key executives restricted stock with performance and market conditions, which are discussed in further detail below. The grant date fair value for restricted stock is generally based on the closing stock price of the Company’s shares of common stock on the trading day preceding the grant date. On April 12, 2021, the Board granted 600,000 restricted stock units and 300,000 restricted stock awards with market-based and service-based vesting conditions (collectively the “Stock Awards”), solely to the Company’s Chief Executive Officer and President pursuant to the 2018 Plan. The Stock Awards were classified as equity with separate tranches and requisite service periods identified for each separately achievable component. As of the grant date, the fair value of the Stock Awards was $ 48.7 million and was calculated using a Monte Carlo simulation. The fair value of the restricted stock awards was estimated at $ 19.4 million and segregated into 15 tranches with expense recognition periods ranging from 2.2 to 6.0 years. The fair value of the restricted stock units was estimated at $ 29.3 million and segregated into four tranches with expense recognition periods ranging from 6.7 to 8.7 years. We recognized $ 5.8 million, $ 7.4 million, and $ 8.4 million of stock compensation expense for the Stock Awards during the years ended December 31, 2025, 2024, and 2023, respectively. The market-based conditions associated with the Stock Awards were not achieved by December 31, 2025; therefore, in accordance with the terms of the agreement, all Stock Awards were forfeited as of that date. Performance Share Programs The Company’s performance share programs were adopted to provide our NEOs and certain other key executives with stock-based compensation tied directly to the Company’s performance, which further aligns their interests with our shareholders and provides compensation only if the designated performance goals are met for the applicable performance periods. The Company granted 1,254,323 and 1,317,269 restricted units with performance-based vesting conditions, at target, during the years ended December 31, 2025 and 2024, respectively. The restricted performance units were granted under the 2022 Amended Plan, and each grant consists of one three-year performance period over a three-year service period. The awards have the potential to be earned at between 0 % and 200 % of the number of shares granted depending on achievement of the performance goals, and remain subject to vesting for the full three-year service period. During the year ended December 31, 2023, the Company granted 461,747 restricted units with performance-based vesting conditions, at target, under the 2022 Plan. The restricted performance units granted in 2023 consist of three one-year performance periods over a three-year service period. The awards have the potential to be earned at between 0 % and 150 % of the number of shares granted depending on achievement of the annual performance goals, and remain subject to vesting for the full three-year service period. 103 Table of Contents The following table presents activity related to our restricted stock for the year ended December 31, 2025: With Performance Conditions Without Performance Conditions Number of Shares Weighted- Average Grant Date Fair Value Number of Shares Weighted- Average Grant Date Fair Value Nonvested as of January 1, 2025 2,995,735 $ 31.21 2,509,623 $ 26.11 Granted 1,569,647 $ 14.76 2,762,449 $ 18.72 Vested ( 237,746 ) $ 39.14 ( 907,738 ) $ 27.03 Forfeited ( 1,081,198 ) $ 47.89 ( 893,265 ) $ 23.90 Nonvested as of December 31, 2025 3,246,438 $ 17.12 3,471,069 $ 20.56 As of December 31, 2025, the unamortized compensation costs not yet recognized related to restricted stock totaled $ 65.8 million and the weighted-average period over which the costs are expected to be recognized is 1.5 years. The total fair values of restricted stock that vested during the years ended December 31, 2025, 2024, and 2023 were $ 33.8 million, $ 38.3 million, and $ 57.2 million, respectively. Note 16—Loss per Share We recorded a net loss attributable to PENN for the years ended December 31, 2025, 2024, and 2023. As such, the dilution from potential common shares was anti-dilutive, and therefore, we used basic weighted-average common shares outstanding rather than diluted weighted-average common shares outstanding when calculating diluted loss per share. Stock options, restricted stock, convertible preferred shares, and convertible debt that could potentially dilute basic EPS in the future, that were not included in the computation of diluted loss per share, are as follows: For the year ended December 31, (in millions) 2025 2024 2023 Assumed conversion of dilutive stock options — 0.1 0.6 Assumed conversion of dilutive restricted stock 0.7 0.4 0.3 Assumed conversion of convertible preferred shares — — 0.3 Assumed conversion of convertible debt 9.0 14.1 14.1 As we recorded a net loss for the years ended December 31, 2025, 2024, and 2023, there are no reconciling items between the weighted-average common shares outstanding for basic and diluted EPS calculations. Restricted stock with performance and market based vesting conditions that have not been met as of December 31, 2025 were excluded from the computation of diluted EPS. Anti-dilutive equity-based awards are excluded from the computation of diluted EPS, and primarily consists of stock options awarded under the Company’s previous and current long-term incentive compensation plans and warrants previously issued under the terms of the Investment Agreement. Pursuant to the Investment Agreement Amendment, the Initial Warrants were deemed vested through and including February 8, 2026, and the remaining unvested warrants were forfeited and cancelled for no consideration. See Note 12, “Commitments and Contingencies.” Anti-dilutive options and warrants to purchase 33.2 million, 35.1 million, and 14.5 million shares were outstanding during each of the years ended December 31, 2025, 2024, and 2023, but were not included in the computation of diluted EPS because they were anti-dilutive. Additionally, the assumed conversion of 0.3 million preferred shares were excluded from the computation of diluted EPS for the year ended December 31, 2023 because including them would have been anti-dilutive. 104 Table of Contents The Company’s calculation of weighted-average common shares outstanding includes the Exchangeable Shares issued in connection with theScore acquisition, as discussed in Note 14, “Stockholders’ Equity.” The following table presents the calculation of basic and diluted loss per share for the Company’s common stock for the years ended December 31, 2025, 2024, and 2023: For the year ended December 31, (in millions, except per share data) 2025 2024 2023 Calculation of basic loss per share: Net loss applicable to common stock $ ( 843.1 ) $ ( 311.5 ) $ ( 490.0 ) Weighted-average shares outstanding - PENN Entertainment, Inc. 144.2 151.6 151.5 Weighted-average shares outstanding - Exchangeable Shares 0.4 0.5 0.6 Weighted-average common shares outstanding - basic 144.6 152.1 152.1 Basic loss per share $ ( 5.83 ) $ ( 2.05 ) $ ( 3.22 ) Calculation of diluted loss per share: Net loss applicable to common stock $ ( 843.1 ) $ ( 311.5 ) $ ( 490.0 ) Weighted-average common shares outstanding - diluted 144.6 152.1 152.1 Diluted loss per share $ ( 5.83 ) $ ( 2.05 ) $ ( 3.22 ) Note 17—Segment Information We have five reportable segments: Northeast, South, West, Midwest, and Interactive. 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 VGT operations, by state, to be separate operating segments. The retail segments primarily generate revenue from gaming operations (such as slot machines and table games), food and beverage offerings, and hotel visitation. The accounting policies of our retail segments are the same as those described in our significant accounting policies. See Note 2, “Significant Accounting Policies and Basis of Presentation” for further information. The Interactive segment includes all of our online gaming operations, management of retail sports betting, and media operations. The accounting policies of our Interactive segment are the same as those described in our significant accounting policies. See Note 2, “Significant Accounting Policies and Basis of Presentation” for further information. Additionally, the Interactive segment included the operating results of Barstool subsequent to the Barstool Acquisition on February 17, 2023 and prior to the Barstool divestiture on August 8, 2023 (as discussed in Note 5, “Acquisitions and Dispositions” ) as well as our 36 % proportionate share of Barstool’s net loss during the period January 1, 2023 through February 16, 2023. The Other category, included in the tables to reconcile the segment information to the consolidated information, consists of our stand-alone racing operations, namely Sanford-Orlando Kennel Club, Sam Houston and Valley Race Park, the Company’s joint venture interest in Freehold Raceway (which ceased operations on December 28, 2024), and our management contract for Retama Park Racetrack. The Other category also includes corporate overhead expenses, which consist of certain expenses, such as: payroll, professional fees, travel expenses, and other general and administrative expenses that have not otherwise been allocated. The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer and President. Segment Adjusted EBITDAR (as defined below) is our measure of segment profit or loss for each segment and is utilized by the CODM as follows: • within the annual budget and forecasting process when making decisions about the allocation of operating and capital resources to each segment; • to evaluate monthly budget-to-actual variances which are used in assessing segment performance; • to determine whether to reinvest profits into the segment or into other parts of the Company, such as new development projects, return generating investments in our retail operations and Interactive segment; and • to determine various capital allocation initiatives such as mergers and acquisitions, share repurchases, and delevering. 105 Table of Contents The tables below provide information about our revenues, expenses, and Segment Adjusted EBITDAR and provide a reconciliation to net loss. For the year ended December 31, 2025 (in millions) Northeast South West Midwest Interactive (1) Other Intersegment Eliminations (2) Total Total revenues $ 2,769.2 $ 1,167.1 $ 543.2 $ 1,181.4 $ 1,302.6 $ 18.5 $ ( 21.0 ) $ 6,961.0 Less: Gaming taxes ( 1,126.4 ) ( 248.0 ) ( 98.9 ) ( 308.0 ) ( 780.8 ) Compensation and benefits ( 417.5 ) ( 235.9 ) ( 127.9 ) ( 184.8 ) ( 138.7 ) Media and advertising (3) ( 310.4 ) Other segment items (4) ( 430.3 ) ( 281.6 ) ( 118.8 ) ( 214.0 ) ( 340.2 ) Segment Adjusted EBITDAR (5) $ 795.0 $ 401.6 $ 197.6 $ 474.6 $ ( 267.5 ) $ 1,601.3 Other operating benefits (costs) and other income (expenses): Other category (6) ( 139.5 ) Rent expense associated with triple net operating leases (7) ( 631.7 ) Stock-based compensation ( 60.9 ) Cash-settled stock-based awards variance 12.9 Loss on disposal of assets ( 0.4 ) Pre-opening expenses ( 17.3 ) Depreciation and amortization ( 446.9 ) Impairment losses (8) ( 945.3 ) Non-operating items of equity method investments (9) ( 4.5 ) Interest expense, net ( 405.8 ) Interest income 9.7 Gain on REIT transactions, net 3.3 Gain on financing arrangement (10) 215.1 Loss on early extinguishment of debt ( 11.8 ) Other 1.1 Loss before income taxes ( 820.7 ) Income tax expense ( 24.6 ) Net loss $ ( 845.3 ) (1) Revenues and gaming taxes expense within the Interactive segment are inclusive of gaming tax reimbursement amounts related to third-party OSB and/or iCasino partners for OSB and iCasino market access of $ 588.3 million for the year ended December 31, 2025. (2) Primarily represents the elimination of intersegment revenues associated with our retail sportsbooks, which are operated by PENN Interactive. (3) Includes advertising expenses of $ 155.6 million related to the Sportsbook Agreement and $ 57.1 million related to the Investment Agreement with ESPN. Also, includes advertising and media expenses across various platforms for theScore BET and its launch in the US following the termination of the Sportsbook Agreement. Such platforms include television, radio, out-of-home, social media, both paid and organic search, as well as sponsorships and media costs associated with partnerships with major sports leagues, and other professional sports teams. (4) For each reportable segment, the Other segment items category includes: a. Northeast segment - cost of goods sold, professional services, legal expenses, facility maintenance, utilities, supplies, property and liability insurance, advertising and promotional expenses, property taxes, sales and use taxes, other taxes and fees, non-REIT lease expenses, and allocated corporate expenses. b. South segment - cost of goods sold, professional services, legal expenses, facility maintenance, utilities, supplies, property and liability insurance, advertising and promotional expenses, property taxes, sales and use taxes, other taxes and fees, non-REIT lease expenses, and allocated corporate expenses. c. West segment - cost of goods sold, professional services, legal expenses, facility maintenance, utilities, supplies, property and liability insurance, advertising and promotional expenses, property taxes, sales and use taxes, other taxes and fees, non-REIT lease expenses, and allocated corporate expenses. d. Midwest segment - cost of goods sold, professional services, legal expenses, facility maintenance, utilities, supplies, property and liability insurance, advertising and promotional expenses, property taxes, sales and use taxes, other taxes and fees, non-REIT lease expenses, allocated corporate expenses, and third-party revenue share fees. 106 Table of Contents e. Interactive segment - professional services, legal expens es, software subscriptions and maintenance fees, software dev elopment costs, utilities, supplies, property and liability insurance, other taxes and fees, lease expense, allocated corporate expenses, and third-party revenue share fees. (5) We define Segment Adjusted EBITDAR as earnings before interest expense, net, interest income, income taxes, depreciation and amortization, rent expense associated with triple net operating leases (see footnote (7) below), 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, loss on disposal of a business, non-cash gains/losses associated with REIT transactions, and other. Segment Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (see footnote (9) below) added back for our Kansas Entertainment joint venture. (6) Primarily represents corporate overhead expenses of $ 134.8 million for the year ended December 31, 2025, which is inclusive of $ 22.4 million of legal and advisory costs related to activist activity in connection with our 2025 Annual Meeting. (7) Pertains to the following operating leases: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease (prior to December 4, 2025); (iv) Greektown Lease (prior to December 4, 2025); and (v) VICI Master Lease (beginning December 4, 2025). (8) Impairment charges of $ 120.3 million and $ 825.0 million relate to our retail segments and Interactive segment, respectively. See Note 8, “Goodwill and Other Intangible Assets.” (9) Consists primarily of depreciation expense associated with our Kansas Entertainment joint venture. (10) Relates to the $ 215.1 million non-cash gain on financing arrangement. See Note 10, “Long-Term Debt.” For the year ended December 31, 2024 (in millions) Northeast South West Midwest Interactive (1) Other Intersegment Eliminations (2) Total Total revenues $ 2,755.7 $ 1,169.0 $ 525.3 $ 1,172.2 $ 959.9 $ 19.6 $ ( 23.6 ) $ 6,578.1 Less: Gaming taxes ( 1,113.2 ) ( 251.9 ) ( 94.2 ) ( 305.1 ) ( 566.3 ) Compensation and benefits ( 414.5 ) ( 222.6 ) ( 123.5 ) ( 174.6 ) ( 168.3 ) Media and advertising (3) ( 407.0 ) Other segment items (4) ( 427.0 ) ( 261.3 ) ( 120.1 ) ( 205.7 ) ( 317.8 ) Segment Adjusted EBITDAR (5) $ 801.0 $ 433.2 $ 187.5 $ 486.8 $ ( 499.5 ) $ 1,409.0 Other operating benefits (costs) and other income (expenses): Other category (6) ( 116.7 ) Rent expense associated with triple net operating leases (7) ( 620.1 ) Stock-based compensation ( 52.9 ) Cash-settled stock-based awards variance 18.7 Loss on disposal of assets ( 10.0 ) Depreciation and amortization ( 433.6 ) Impairment losses (8) ( 89.1 ) Non-operating items of equity method investments (9) ( 4.4 ) Interest expense, net ( 470.5 ) Interest income 23.6 Loss on early extinguishment of debt ( 0.3 ) Other (10) 5.0 Loss before income taxes ( 341.3 ) Income tax benefit 28.0 Net loss $ ( 313.3 ) (1) Revenues and gaming taxes expense within the Interactive segment are inclusive of gaming tax reimbursement amounts related to third-party OSB and/or iCasino partners for OSB and iCasino market access of $ 435.6 million for the year ended December 31, 2024. (2) Primarily represents the elimination of intersegment revenues associated with our retail sportsbooks, which are operated by PENN Interactive. (3) Includes advertising expenses of $ 179.2 million related to the Sportsbook Agreement and $ 67.9 million related to the Investment Agreement with ESPN. While the Sportsbook Agreement and Investment Agreement commenced on August 8, 2023, the Company began recognizing advertising expense, specific to the initial annual period, during the fourth quarter of 2023. Also, includes advertising and media expenses (including such expenses associated with theScore) across various platforms, including television, radio, out-of-home, social media, and both paid and organic search, and sponsorships and media costs associated with partnerships with major sports leagues, and other professional sports teams. 107 Table of Contents (4) For each reportable segment, the Other segment items category includes: a. Northeast segment - cost of goods sold, professional services, legal expenses, facility maintenance, utilities, supplies, property and liability insurance, advertising and promotional expenses, property taxes, sales and use taxes, other taxes and fees, non-REIT lease expenses, and allocated corporate expenses. b. South segment - cost of goods sold, professional services, legal expenses, facility maintenance, utilities, supplies, property and liability insurance, advertising and promotional expenses, property taxes, sales and use taxes, other taxes and fees, non-REIT lease expenses, and allocated corporate expenses. c. West segment - cost of goods sold, professional services, legal expenses, facility maintenance, utilities, supplies, property and liability insurance, advertising and promotional expenses, property taxes, sales and use taxes, other taxes and fees, non-REIT lease expenses, and allocated corporate expenses. d. Midwest segment - cost of goods sold, professional services, legal expenses, facility maintenance, utilities, supplies, property and liability insurance, advertising and promotional expenses, property taxes, sales and use taxes, other taxes and fees, non-REIT lease expenses, allocated corporate expenses, and third-party revenue share fees. e. Interactive segment - professional services, legal expens es, software subscriptions and maintenance fees, software dev elopment costs, utilities, supplies, property and liability insurance, other taxes and fees, lease expense, allocated corporate expenses, and third-party revenue share fees. (5) We define Segment Adjusted EBITDAR as earnings before interest expense, net, interest income, income taxes, depreciation and amortization, rent expense associated with triple net operating leases (see footnote (7) below), 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, loss on disposal of a business, non-cash gains/losses associated with REIT transactions, and other. Segment Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (see footnote (9) below) added back for our Kansas Entertainment joint venture. (6) Primarily represents corporate overhead expenses of $ 104.8 million for the year ended December 31, 2024. (7) Pertains to the following operating leases: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease; and (iv) Greektown Lease. (8) Impairment charges of $ 67.0 million, $ 15.9 million, and $ 6.2 million relate to the Northeast, South, and Midwest seg ments, respectively. See Note 8, “Goodwill and Other Intangible Assets.” (9) Consists principally of depreciation expense associated with our Kansas Entertainment joint venture. (10) Primarily relates to transaction costs and finance transformation costs, partially offset by dividend income received and insurance recoveries, net of deductible charges. 108 Table of Contents For the year ended December 31, 2023 (in millions) Northeast South West Midwest Interactive (1) Other Intersegment Eliminations (2) Total Total revenues $ 2,738.4 $ 1,216.4 $ 528.5 $ 1,172.6 $ 718.8 $ 20.2 $ ( 32.0 ) $ 6,362.9 Less: Gaming taxes ( 1,115.5 ) ( 263.1 ) ( 93.6 ) ( 309.4 ) ( 498.6 ) Compensation and benefits ( 388.4 ) ( 215.3 ) ( 114.7 ) ( 165.4 ) ( 176.7 ) Media and advertising (3) ( 144.9 ) Other segment items (4) ( 403.5 ) ( 243.9 ) ( 116.0 ) ( 201.2 ) ( 301.1 ) Segment Adjusted EBITDAR (5) $ 831.0 $ 494.1 $ 204.2 $ 496.6 $ ( 402.5 ) $ 1,623.4 Other operating benefits (costs) and other income (expenses): Other category (6) ( 110.8 ) Rent expense associated with triple net operating leases (7) ( 591.1 ) Stock-based compensation ( 85.9 ) Cash-settled stock award variance 13.8 Loss on disposal of assets ( 0.1 ) Depreciation and amortization ( 435.1 ) Impairment losses (8) ( 130.6 ) Non-operating items of equity method investments (9) ( 7.4 ) Interest expense, net ( 464.7 ) Interest income 40.3 Loss on disposal of Barstool (10) ( 923.2 ) Gain on Barstool Acquisition, net (11) 83.4 Gain on REIT transactions, net (12) 500.8 Other (13) ( 12.4 ) Loss before income taxes ( 499.6 ) Income tax benefit 8.2 Net loss $ ( 491.4 ) (1) Revenues and gaming taxes expense within our Interactive segment are inclusive of gaming tax reimbursement amounts related to third-party OSB and/or iCasino partners for OSB and iCasino market access of $ 390.4 million for the year ended December 31, 2023. (2) Primarily represents the elimination of intersegment revenues associated with our retail sportsbooks, which are operated by PENN Interactive. (3) Includes advertising expenses of $ 33.3 million related to the Sportsbook Agreement and $ 12.5 million related to the Investment Agreement with ESPN. While the Sportsbook Agreement and Investment Agreement commenced on August 8, 2023, the Company began recognizing advertising expense, specific to the initial annual period, during the fourth quarter of 2023. Also, includes advertising and media expenses (including such expenses associated with theScore) across various platforms, including television, radio, out-of-home, social media, and both paid and organic search, and sponsorships and media costs associated with partnerships with major sports leagues, and other professional sports teams. (4) For each reportable segment, the Other segment items category includes: a. Northeast segment - cost of goods sold, professional services, legal expenses, facility maintenance, utilities, supplies, property and liability insurance, advertising and promotional expenses, property taxes, sales and use taxes, other taxes and fees, non-REIT lease expenses, and allocated corporate expenses. b. South segment - cost of goods sold, professional services, legal expenses, facility maintenance, utilities, supplies, property and liability insurance, advertising and promotional expenses, property taxes, sales and use taxes, other taxes and fees, non-REIT lease expenses, and allocated corporate expenses. c. West segment - cost of goods sold, professional services, legal expenses, facility maintenance, utilities, supplies, property and liability insurance, advertising and promotional expenses, property taxes, sales and use taxes, other taxes and fees, non-REIT lease expenses, and allocated corporate expenses. d. Midwest segment - cost of goods sold, professional services, legal expenses, facility maintenance, utilities, supplies, property and liability insurance, advertising and promotional expenses, property taxes, sales and use taxes, other taxes and fees, non-REIT lease expenses, allocated corporate expenses, and third-party revenue share fees. e. Interactive segment - cost of goods sold, professional services, legal expens es, software subscriptions and maintenance fees, software dev elopment costs, utilities, supplies, property and liability insurance, other taxes and fees, lease expense, allocated corporate expenses, and third-party revenue share fees. 109 Table of Contents (5) We define Segment Adjusted EBITDAR as earnings before interest expense, net, interest income, income taxes, depreciation and amortization, rent expense associated with triple net operating leases (see footnote (7) below), 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, loss on disposal of a business, non-cash gains/losses associated with REIT transactions, non-cash gains/losses associated with partial and step acquisitions as measured in accordance with ASC 805, and other. Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (see footnote (9) below) added back for Barstool and our Kansas Entertainment joint venture. (6) Primarily represents corporate overhead costs of $ 106.7 million for the year ended December 31, 2023. (7) Pertains to the following operating leases: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease; (iv) Greektown Lease. (8) Impairment charges relate to our Northeast segment. See Note 8, “Goodwill and Other Intangible Assets.” (9) Consists principally of interest expense, net, income taxes, depreciation and amortization, and stock-based compensation expense associated with Barstool prior to us acquiring the remaining 64 % of Barstool common stock (see Note 5, “Acquisitions and D ispositions” ) and our Kansas Entertainment joint venture. (10) Relates to the loss incurred on the sale of 100 % of the outstanding shares of Barstool which was completed on August 8, 2023. See Note 5, “Acquisitions and Dispositions.” (11) Includes a gain of $ 66.5 million associated with Barstool related to remeasurement of the equity investment immediately prior to the acquisition date of February 17, 2023 and a gain of $ 16.9 million related to the acquisition of the remaining 64 % of Barstool common stock. See Note 5, “Acquisitions and Dispositions.” (12) Upon the execution of the February 21, 2023 AR PENN Master Lease and the 2023 Master Lease, both effective January 1, 2023, we recognized a gain of $ 500.8 million as a result of the reclassification and remeasurement of lease components. S ee Note 11, “Leases.” (13) Primarily relates to unrealized holding losses on our equity securities of $ 6.4 million and non-recurring acquisition and transaction costs of $ 25.0 million, partially offset by insurance recoveries, net of deductible charges of $ 13.9 million and dividend income of $ 10.8 million. See Note 18, “Fair Value Measurements.” The table below presents capital expenditures by segment: For the year ended December 31, (in millions) 2025 2024 2023 Capital expenditures: Northeast segment $ 119.8 $ 81.9 $ 113.7 South segment 72.6 97.5 93.0 West segment 151.3 64.8 30.3 Midwest segment 277.9 222.9 73.6 Interactive segment 4.3 2.5 33.2 Other 21.8 13.1 16.2 Total capital expenditures $ 647.7 $ 482.7 $ 360.0 The measure of segment assets is reported on our Consolidated Balance Sheets as total consolidated assets. The table below presents investment in and advances to unconsolidated affiliates and total assets by segment: (in millions) Northeast South West Midwest Interactive Other (1) Total Balance sheet as of December 31, 2025 Investment in and advances to unconsolidated affiliates $ 0.1 $ — $ — $ 77.8 $ — $ 1.5 $ 79.4 Total assets $ 1,815.6 $ 1,295.2 $ 427.6 $ 1,567.5 $ 1,530.0 $ 7,632.6 $ 14,268.5 Balance sheet as of December 31, 2024 Investment in and advances to unconsolidated affiliates $ 0.1 $ — $ — $ 80.9 $ — $ 5.2 $ 86.2 Total assets $ 1,808.1 $ 1,301.7 $ 453.2 $ 1,503.7 $ 2,385.6 $ 7,809.4 $ 15,261.7 Balance sheet as of December 31, 2023 Investment in and advances to unconsolidated affiliates $ — $ — $ — $ 80.8 $ — $ 4.1 $ 84.9 Total assets $ 1,827.4 $ 1,244.5 $ 388.6 $ 1,241.1 $ 2,549.9 $ 8,812.7 $ 16,064.2 (1) The real estate assets subject to the (i) Master Leases; (ii) Margaritaville Lease (for the period January 1, 2023 to December 3, 2025); (iii) Greektown Lease (for the period January 1, 2023 to December 3, 2025); and (iv) VICI Master Lease (beginning December 4, 2025), which are classified as either property and equipment, net, operating lease ROU assets, or finance lease ROU assets, are included within the Other category. 110 Table of Contents Note 18—Fair Value Measurements ASC Topic 820, “Fair Value Measurements and Disclosures,” establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach, and cost approach). The levels of the hierarchy are described below: • Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets, such as interest rates and yield curves that are observable at commonly quoted intervals. • Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions, as there is little, if any, related market activity. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy. The following methods and assumptions are used to estimate the fair value of each class of financial instruments for which it is practicable to estimate. The fair value of the Company’s trade accounts receivable and payable approximates the carrying amounts. Available-for-Sale Debt Securities The Company acquired 12.0 % secured convertible notes in a technology provider on April 7, 2023 for $ 20.0 million, due on the third-year anniversary of the date of issuance, which are recorded in “Other assets” in our Consolidated Balance Sheets. Additionally, the terms of these notes contain optional and mandatory conversion provisions pursuant to which we would receive common stock upon conversion. As of December 31, 2025 and 2024, the fair value of the convertible notes was $ 26.4 million and $ 31.5 million, respectively. As such, during the years ended December 31, 2025 and 2024, we recorded an unrealized loss of $ 5.1 million and an unrealized gain of $ 7.3 million, respectively, and corresponding tax benefit of $ 1.3 million and tax expense of $ 1.9 million, respectively, to “Other comprehensive income (loss)” within our Consolidated Statements of Comprehensive Loss. The fair value of the convertible notes was determined using valuation models that utilize Level 3 measurements. Long-Term Debt The fair value of our Amended Credit Facilities, 5.625 % Notes, 4.125 % Notes, and the Convertible Notes is estimated based on quoted prices in active markets. The previously described long-term debt instruments have been classified as Level 2 measurements. As of December 31, 2024, other long-term obligations included a third-party financing arrangement entered into in February 2021, as discussed in Note 10, “Long-term Debt . ” The financing arrangement provided the Company with upfront and non-refundable cash proceeds, while permitting us to participate in future proceeds on certain claims. The financing obligation was classified as a Level 3 measurement and as of December 31, 2024, and was included within the Consolidated Balance Sheets in “Long-term debt, net of current maturities, debt discount, and debt issuance costs.” Other Liabilities As of both December 31, 2025 and 2024, Other liabilities includes a $ 39.5 million tax indemnification, as described in Note 2, “Significant Accounting Policies and Basis of Presentation . ” Liabilities associated with the indemnification are recorded in “Other long-term liabilities” within our Consolidated Balance Sheets. The indemnity has been classified as a Level 3 measurement. Key assumptions used to estimate the fair value of the indemnification include the expected tax rate and the probability of potential outcomes based on valuation methods that utilize unobservable inputs that are significant to the overall fair value as of December 31, 2025 and 2024. 111 Table of Contents The carrying amounts and estimated fair values by input level of the Company’s financial instruments were as follows: December 31, 2025 (in millions) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 686.6 $ 686.6 $ 686.6 $ — $ — Available-for-sale debt securities $ 26.4 $ 26.4 $ — $ — $ 26.4 Held-to-maturity securities $ 6.7 $ 6.7 $ — $ 6.7 $ — Promissory notes $ 7.9 $ 7.9 $ — $ 7.9 $ — Financial liabilities: Long-term debt Amended Credit Facilities $ 1,975.8 $ 1,993.0 $ — $ 1,993.0 $ — 5.625 % Notes $ 399.8 $ 399.0 $ — $ 399.0 $ — 4.125 % Notes $ 396.4 $ 368.0 $ — $ 368.0 $ — Convertible Notes $ 106.5 $ 105.6 $ — $ 105.6 $ — Other long-term obligations $ 8.6 $ 7.3 $ — $ 7.3 $ — Other liabilities $ 42.8 $ 42.8 $ — $ 2.7 $ 40.1 December 31, 2024 (in millions) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 706.6 $ 706.6 $ 706.6 $ — $ — Equity securities $ 10.6 $ 10.6 $ 10.6 $ — $ — Available-for-sale debt securities $ 31.5 $ 31.5 $ — $ — $ 31.5 Held-to-maturity securities $ 6.7 $ 6.7 $ — $ 6.7 $ — Promissory notes $ 7.9 $ 7.9 $ — $ 7.9 $ — Financial liabilities: Long-term debt Amended Credit Facilities $ 1,437.0 $ 1,453.9 $ — $ 1,453.9 $ — 5.625 % Notes $ 399.8 $ 393.0 $ — $ 393.0 $ — 4.125 % Notes $ 395.5 $ 356.0 $ — $ 356.0 $ — Convertible Notes $ 327.9 $ 355.7 $ — $ 355.7 $ — Other long-term obligations $ 210.5 $ 209.3 $ — $ 8.1 $ 201.2 Other liabilities $ 44.6 $ 44.6 $ — $ 2.7 $ 41.9 112 Table of Contents The following table summarizes the changes in fair value of our Level 3 assets and liabilities measured on a recurring basis: (in millions) Other Assets and Liabilities Balance as of January 1, 2023 $ 125.2 Additions 90.0 Interest 36.1 Payments ( 2.9 ) Included in net loss and other comprehensive income 6.1 Balance as of December 31, 2023 254.5 Interest 47.1 Payments ( 33.1 ) Included in net loss and other comprehensive loss 6.1 Balance as of December 31, 2024 274.6 Interest 13.9 Payments ( 2.0 ) Included in net loss and other comprehensive income (1) ( 220.0 ) Balance as of December 31, 2025 $ 66.5 (1) Includes a non-cash gain on financing arrangement and an unrealized loss on debt securities. See Note 10, “Long-Term Debt . ” The following table sets forth the assets measured at fair value on a non-recurring basis as of December 31, 2025 and 2024: (in millions) Valuation Date Valuation Technique Level 1 Level 2 Level 3 Total Balance Total Reduction in Fair Value Recorded Trademark 4/30/2025 Discounted cash flow $ — $ — $ 7.0 $ 7.0 $ 15.0 Goodwill 9/30/2025 Discounted cash flow and market approach $ — $ — $ 766.0 $ 766.0 $ 825.0 Goodwill 10/1/2025 Discounted cash flow and market approach $ — $ — $ 35.0 $ 35.0 $ 7.0 Gaming licenses 10/1/2025 Discounted cash flow $ — $ — $ 73.5 $ 73.5 $ 88.3 Trademarks 10/1/2025 Discounted cash flow $ — $ — $ 33.0 $ 33.0 $ 10.0 Goodwill 10/1/2024 Discounted cash flow and market approach $ — $ — $ 197.0 $ 197.0 $ 12.3 Gaming licenses 10/1/2024 Discounted cash flow $ — $ — $ 71.0 $ 71.0 $ 69.3 Trademarks 10/1/2024 Discounted cash flow $ — $ — $ 56.0 $ 56.0 $ 7.5 The following table summarizes the significant unobservable inputs used in calculating fair value for our Level 3 assets and liabilities on a recurring basis as of December 31, 2025: Valuation Technique Unobservable Input Discount Rate Available-for-sale debt securities Discounted cash flow Discount rate 32.5 % 113 Table of Contents As discussed in Note 8, “Goodwill and Other Intangible Assets,” we recorded impairment charges on the indefinite-lived intangible asset classes below, following both interim assessments and our annual impairment assessment during the year ended December 31, 2025, and our annual impairment assessment during the year ended December 31, 2024. The table below presents quantitative information about the significant unobservable inputs used in the fair value measurements as of the valuation dates below: (in millions) Fair Value Valuation Technique Unobservable Input Range or Amount As of April 30, 2025 Trademark $ 7.0 Discounted cash flow Discount rate 12.5 % Pre-tax royalty rate 2.3 % As of October 1, 2025 Gaming licenses $ 73.5 Discounted cash flow Discount rate 12.0 % Long-term revenue growth rate 2.0 % Trademarks $ 33.0 Discounted cash flow Discount rate 12.0 % Long-term revenue growth rate 2.0 % Pretax royalty rate 1.5 % As of October 1, 2024 Gaming licenses $ 71.0 Discounted cash flow Discount rate 12.5 % Long-term revenue growth rate 2.0 % Trademarks $ 56.0 Discounted cash flow Discount rate 12.5 % - 14.5 % Long-term revenue growth rate 2.0 % - 4.0 % Pretax royalty rate 1.5 % - 5.0 % Note 19—Related Party Transactions The Company leases two executive office buildings in Wyomissing, Pennsylvania from affiliates of its chairman emeritus of the Board. Rent expense was $ 1.1 million for each of the three years ended December 31, 2025, 2024, and 2023. One lease was renewed in December 2025 and will expire in December 2030, and the other lease expires in August 2026. As of December 31, 2025, the future minimum lease commitments relating to the leases were $ 2.3 million. 114 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.