The long-simmering feud between Penn Entertainment and investment group HG Vora was legally settled earlier this week when Penn agreed to add three directors of HG Vora’s choosing to its board.
Director’s Cut
Penn Entertainment and one of its significant shareholders, HG Vora Capital Management, LLC, a New York City-based investment company, announced on Monday that they had signed a cooperation agreement to appoint three new directors to the board.
It should be noted that Penn agreed to nominate two of three of HG Vora’s chosen directors, Johnny Hartnett and Carlos Ruisanchez, earlier last year, but that did not assuage the concerns of the investment company that owns a 4.7% share of Penn.
HG Vora insisted that all three be nominated, which spurred a legal battle between the two parties, but those claims were settled with the addition of the three new members and the cooperation agreement that ensued.
However, with the three new directors, five now aligned with HG Vora, Penn’s Board of Directors has increased from eight to 11 with the addition of:
- Heather Ace (Executive Vice President for semiconductor manufacturer Qualcomm)
- Jeffrey Fox (CEO and founder of Arkansas-based investment firm Circumference Group)
- Fabio Schiavolin (former CEO of Snaitech, a public gaming and entertainment company based in Italy)
Shifting Gears
Penn’s senior management has been excoriated for its decision to expand its gaming footprint into the digital realm. The Pennsylvania-based retail gaming company had traditionally operated profitable casinos and horse tracks, with some doubling as racinos.
However, Penn CEO Jay Snowden became enamored with the mobile sports betting industry and, in September 2020, partnered with Barstool Sports to launch Barstool Sportsbook. Penn Entertainment decided to purchase the entire Barstool Sports media empire, including the sportsbook, from founder Dave Portnoy for $550 million in 2023.
However, only six months after completing that deal in February 2023, Snowden seized upon an opportunity to partner with sports entertainment giant ESPN to create ESPNBet for $2 billion over a 10-year agreement.
The caveat was that the Disney-owned company did not want its new partner, Penn Entertainment, to be associated with the controversial bro-culture of Barstool Sports.
Deal Backfired for Penn
This clause forced Penn to dissolve Barstool Sportsbook and sell the media brand, Barstool Sports, back to Dave Portnoy for $1, and the agreement to split 50% of the profits with Penn should he ever divest himself of the company. Portnoy has vowed never to sell.
As this was transpiring, Penn struggled to gain market penetration in the mobile sports betting industry, and its new ESPN Bet did not manifest in any material gains over Barstool Sportsbook, earning approximately a 3% market share.
Penn Entertainment has seen its stock price collapse from a high of $136.47 on March 15, 2021, roughly two years before it completed the Barstool Sports deal, to where it now stands at $12.61. This has caused the investor mutiny spearheaded by HG Vora.
Penn Entertainment used the escape clause triggered after the first two years of entering into the contract and is now free from the yearly payment of roughly $200 million per year to ESPN. However, the company is still in the mobile sports betting business with its Canadian subsidiary, theScore, which went live in the US in December 2025 after ESPNBet was terminated.
