PENN Entertainment, Inc. Common Stock

Technology infrastructure · Cloud services and data center operations

We rely on third party cloud infrastructure services to deliver our offerings to users, and we have experienced, and expect in the future to experience, service interruptions, delays, and outages. We currently host our OSB and iCasino offerings and support our operations using third-party providers of cloud infrastructure services. We do not, and will not, have control over the operations of the facilities or infrastructure of the third-party service providers that we use. Such third-party facilities are vulnerable to damage or interruption from natural disasters, cybersecurity attacks, terrorist attacks, power outages and similar events or acts of misconduct.

Technology infrastructure · Technology systems and infrastructure failure

If our third-party mobile application distribution platforms or service providers do not perform adequately or terminate their relationships with us, our business may be disrupted or our costs may increase. Our success depends in part on our relationships with other third-party service providers. We rely upon third-party distribution platforms, including the Apple App Store and Google Play store, for distribution of our entertainment, media, and mobile sports betting and iCasino applications.

Cybersecurity and data protection · Insider threats and access controls

We face the risk of fraud, theft, and cheating. We face the risk that gaming customers may attempt or commit fraud or theft or cheat in order to increase winnings. Such acts of fraud, theft, or cheating could involve the use of counterfeit chips or other tactics, possibly in collusion with our employees. Internal acts of cheating could also be conducted by employees through collusion with dealers, surveillance staff, floor managers, or other casino or gaming area staff.

Customer and revenue · Changing customer preferences and behavior

The growth of our Interactive segment will depend on our ability to attract and retain users, which may require investments in our online offerings, technology, and strategic marketing initiatives. If new or existing competitors offer more attractive offerings or engage in marketing initiatives that are better received by customers, we may lose users or users may decrease their spending on our offerings.

Market position and competition · Disruptive competitors and new market entrants

There can be no assurance that we will be able to compete effectively or generate sufficient returns from our OSB and iCasino operations, including theScore Bet and Hollywood iCasino. Our sports betting and iCasino operations compete, and will continue to compete, in a rapidly evolving and highly competitive market against an increasing number of competitors. There can be no assurance that we will realize the anticipated benefits of our OSB and iCasino operations.

Innovation and product development · Product development and randd investment risks

Our success also depends in part on our ability to anticipate and satisfy user preferences in a timely manner. As we operate in a dynamic environment characterized by rapidly changing industry and legal standards, our products will be subject to changing consumer preferences that cannot be predicted with certainty. We will need to continually introduce new offerings and identify future product offerings that complement our existing technology, respond to our users' needs and improve and enhance our existing technology to maintain or increase our user engagement and growth of our business.

Innovation and product development · Intellectual property protection and infringement

We may be unable to protect, or may not be successful in protecting, our intellectual property rights. Our commercial success depends upon our ability to develop new or improved technologies and products, and to successfully obtain or acquire proprietary or statutory protection for our intellectual property rights. We rely on, among other things, copyrights, trademarks, trade secrets, confidentiality procedures, and contractual provisions to protect our proprietary rights.

Human capital and workforce · Key personnel dependence and succession

The success of our business is largely dependent on the skill and experience of management and key personnel, and our ability to attract and retain talented team members. Insufficient numbers of talented team members or the loss of senior executives or key personnel could also limit our ability to grow and expand our businesses.

Supply chain and procurement · Raw material availability and cost volatility

Additionally, we rely on third-party suppliers to provide gaming equipment, semiconductor chips and other supplies for our business. Supply chain delays or disruptions could impact our ability to obtain these supplies from our key suppliers on acceptable terms or at all. Any suspension or delay in our suppliers' ability to provide us adequate equipment or supplies, or in our ability to procure equipment or supplies from other sources in a timely manner or at all, could impair our ability to meet customer demand.

Supply chain and procurement · Supplier operation and dependance

We are subject to risks associated with leased property, as most of our facilities are leased. We lease 36 of the facilities we operate pursuant to the Triple Net Leases. Termination of the AR PENN Master Lease, the 2023 Master Lease, or Pinnacle Master Lease could result in a default under our debt agreements and could have a material adverse effect on our business, financial condition, and results of operations.

Natural and catastrophic events · Natural disasters and extreme weather

We operate facilities that are located in areas that experience extreme weather conditions, which may increase in frequency and severity as a result of climate change. We have been and may continue to be adversely impacted by increases in the frequency, duration, and severity of extreme weather events and changes in precipitation and temperature. Extreme weather conditions may interrupt our operations and reduce the number of customers who visit our facilities in the affected areas.

Economic and market conditions · Consumer spending and confidence

Our business is particularly sensitive to downturns in the economy and the associated impact on discretionary spending on leisure activities. Decreases in discretionary consumer spending or changes in consumer preferences, including as a result of perceived or actual adverse economic conditions or inflation, changes in interest or unemployment rates, government shutdowns, tight credit conditions, increased housing, energy, food and travel costs, global hostilities, trade disputes, including the imposition of new or increased tariffs, political or social unrest, widespread illnesses, or other factors beyond our control, could adversely affect the gaming and entertainment industries and demand for our products and amenities.

Natural and catastrophic events · Climate change and environmental impact

We operate facilities that are located in areas that experience extreme weather conditions, which may increase in frequency and severity as a result of climate change. Our properties, including those in Colorado, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Massachusetts, Mississippi, Missouri, Ohio, and Pennsylvania, are at risk of experiencing extreme weather conditions, including snowstorms, tornadoes, hurricanes or flooding.

Geopolitical and trade · Regulatory and policy uncertainty

We are subject to risks and costs related to climate change regulations. We may become subject to legislation and regulation regarding climate change, and compliance with any new rules could be difficult, burdensome, and costly. Certain states have announced or adopted programs intended to stabilize and reduce greenhouse gas emissions and, in the past, federal legislation has been proposed in Congress.

Social and demographic · Stakeholder activism and pressure

Shareholder activists have, and could in the future, cause a disruption to, or have an adverse effect on, our business. We have been subject to shareholder activism and may be subject to such activism in the future, which may include proxy solicitations, shareholder proposals or other actions by activists to effect changes to the Company or to assert influence on the Company's Board of Directors and management.

Market and investment · Trading and market making activities

Participation in the sports betting industry exposes us to trading, liability management, and pricing risk. Our fixed-odds betting products involve betting where winnings are paid on the basis of the stake placed and the odds quoted. Odds are determined with the objective of providing an average return to us over a large number of events. However, there can be significant variation in gross win percentage on an event-by-event and day-by-day basis.

Capital structure and performance · Debt management and refinancing

A significant portion of our cash flow from operations is used to make interest payments and rent payments under our debt and lease agreements. As of December 31, 2025, we had indebtedness of $2.9 billion, including $2.0 billion outstanding under our Amended Credit Facilities. We also utilize a significant portion of our cash flow from operations to make our rent payments, which were $967.8 million for the year ended December 31, 2025.

Credit and liquidity · Access to capital and financing

We may require additional capital to support our growth plans, and such capital may not be available on terms acceptable to us, if at all. We may finance some of our current and future expansion, development and renovation projects and acquisitions with cash flow from operations, borrowings under our Amended Credit Facilities and equity or debt financings. Depending on credit market conditions, including the current high interest rate environment, alternative sources of funds may not be sufficient to finance our expansion, development and/or renovation, or such other financing may not be available on acceptable terms, in a timely manner or at all.

Credit and liquidity · Credit risk and customer defaults

We extend credit to a portion of our customers who wager at our retail properties, and we may not be able to collect gaming receivables from our credit customers. We conduct our gaming activities on a credit and cash basis at many of our properties, in accordance with applicable laws and regulations. Any such credit we extend is unsecured. These large receivables could have a significant impact on our business, financial condition and results of operations if deemed uncollectible.

Data and privacy · Data protection and privacy laws

Changes to consumer privacy laws could adversely affect our ability to market our products effectively and may require us to change our business practices or expend significant amounts on compliance with such laws. We rely on a variety of direct marketing techniques, including email marketing, online advertising, and postal mailings in our business. Any further restrictions in laws such as the CAN-SPAM Act, the Telephone Consumer Protection Act, the Do-Not-Call-Implementation Act, applicable Federal Communications Commission telemarketing rules, the FTC Privacy Rule, Safeguards Rule, Consumer Report Information Disposal Rule, Telemarketing Sales Rule, Canada's Anti-Spam Law and various U.S. state and Canadian provincial laws could adversely affect the continuing effectiveness of email, online advertising, and postal mailing techniques.