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PENN Entertainment shareholder HG Vora Capital Management has stepped up its proxy campaign against the company and calls for a board overhaul.

A week after sending a letter to shareholders, the hedge fund created a website and published a 116-page presentation arguing for strategic changes. 

The vocal shareholder asserts that Penn stock has declined 90% since its peak in 2021, destroying nearly $19 billion in shareholder value.

The hedge fund has once again urged shareholders to vote for the three independent board candidates it has nominated using the Gold proxy card, not Penn’s white card.

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In its “Genuine Change Is Needed At PENN” presentation, HG Vora highlights that before 2020, Penn Entertainment focused on brick-and-mortar casinos.

Since then, the company has shifted its priority to its Interactive division, particularly online sports betting (OSB), and has committed over $4 billion in shareholder capital. Yet, the digital segment only accounts for 15% of the company’s revenue.

While the retail casino sector has been successful and proven to return shareholder investment, the move towards the digital segment has diminished value. 

According to the presentation, from 2000 to 2020, shareholder return was 4,926%, compared to the 416% growth of the S&P 600 index. However, since 2020, that return has plummeted to -37%, compared to 19% growth for the S&P 600.

The strategy shift toward the Interactive division has generated an EBITDA loss of about $1 billion and write-downs of approximately $850 million.

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HG Vora suggests that Penn got into the OSB business too late. 

In January 2020, FanDuel and DraftKings accounted for over 60% of the market. Still, the company pursued a deal with Barstool Sports that never materialized. Penn initially paid $163 million for a 36% share in Barstool in 2020. In 2023, it spent another $388 million for the remaining share. However, at that time, Barstool’s market share had dropped to 1.6% from the all-time high of 5% in 2021.

Less than six months later, Penn sold the brand back to its founder, Dave Portnoy, for $1. It then announced a partnership with Disney to form ESPN Bet, a move which has cost the company $500 million. 

The ESPN Bet deal has not paid off either. In January 2025, the brand held only 1.9% of the US market. When it launched in November 2023, it created a buzz and captured 8.2% market share. 

The platform lost 27% of its active users from November 2023 to January 2025. For context, the company had set goals for ESPN Bet to capture between 10% and 20% market share.

HG Vora also points out that the OSB focus was detrimental to the company’s online casino, Hollywood Casino. In 2020, the app had a 15.8% market share in Pennsylvania; by 2025, that had dropped to 1.9%. 

Meanwhile, rival Rush Street Interactive’s focus on the vertical allowed it to capture 11.9% market share in March 2025.

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HG Vora claims the Penn Board of Directors lacks the experience and skills to align with its strategy focused on the Interactive division, even after the recent restructuring. 

Out of the eight directors, only two had previous experience with Mergers and Acquisitions, while only one had experience with Technology Product Development and Operations. Meanwhile, none had worked with Online Gaming or Strategic Transformation.

HG Vora also believes Penn’s directors are not aligned with shareholders, because they own little stock. According to the presentation, CEO Jay Snowden owns eight times less stock than HG Vora. Meanwhile, the independent directors’ aggregate ownership is 35 times less. Instead of buying, the leadership sells stock, distancing itself from the company’s decline.

While shareholders have lost money recently and the company trails peers, executive pay has not reflected the decline. According to HG Vora, Snowden has been the second-worst-performing CEO among his peers. Meanwhile, his $25 million total compensation in 2024 was the second highest (the highest among all gambling operators).

The hedge fund also suggests that Snowden and CFO Felicia Hendrix “appear to be using Penn’s corporate aircraft as their personal Uber service.” According to the data, two of the top three most frequent flights since 2022 were to airports close to the executives’ residences.

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As the current Penn board lacks experience with areas like OSB, Mergers & Acquisitions, and Strategic Management, HG Vora believes it will benefit from the addition of the three independent candidates it has nominated:

• William Clifford: Former Penn CFO
• Johnny Hartnett: Former CEO of Superbet Group, Chief Development Officer at Flutter
• Carlos Ruisanchez: Former CFO of Pinnacle Entertainment

According to the hedge fund, all three bring experience in Mergers & Acquisitions and Strategic Transformation. Two have experience with Online Gaming, and one with Technology Product Development & Operations.

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As a solution to the issue, HG Vora has suggested three paths to turn the company’s fortunes around:

• Enhance board composition: Refresh the board by adding the three independent HG Vora nominees
• Align pay with performance: Correct executive compensation through peer benchmarking analysis and set more challenging performance goals. Hold leadership accountable.
• Review the company’s leadership and strategy: Conduct a fresh examination of the company’s capital allocation. Examine the Interactive division and develop a plan for each component. Directors should be tasked with responsibilities that match their skill set and experience.