High stakes and ShackBurgers: Shake Shack bets big on PENN casinos with nationwide expansion deal

In a move set to reshape the intersection of food and entertainment, Shake Shack Inc. has signed a landmark licensing agreement with PENN Entertainment, Inc. to launch ten new Shake Shack restaurants at casino locations operated by PENN across the United States. The agreement, announced jointly by the two companies on May 21, 2025, signals a strategic step by the iconic burger chain to expand its footprint through non-traditional formats, embedding itself deeper into the broader U.S. leisure and hospitality ecosystem.

The first two Shake Shack outlets under this partnership are slated to open in 2026, located at Hollywood Casino Toledo in Ohio and River City Casino Hotel in St. Louis, Missouri. The openings remain subject to standard regulatory approvals.

The expansion is part of a broader trend where fast-casual dining brands are targeting experiential venues such as casinos, airports, and entertainment complexes to capture new customer segments and drive incremental revenue. In partnering with PENN Entertainment, Shake Shack is aligning its brand with a company that operates in 28 jurisdictions across North America and boasts a diverse mix of casinos, racetracks, and digital gaming platforms.

What Makes This Shake Shack–PENN Deal Strategic?

For Shake Shack, the licensing arrangement with PENN Entertainment is more than just a geographic expansion; it represents a deliberate effort to diversify the brand’s format and customer base. Michael Kark, President of Global Licensing at Shake Shack, explained that the company continues to explore flexible restaurant formats to penetrate new regional markets. By embedding Shake Shack outlets within high-traffic casino properties, the brand is poised to capture on-premise demand from both casual diners and high-frequency entertainment-goers.

Meanwhile, for PENN Entertainment, the addition of Shake Shack to its properties aligns with a long-term strategy to enhance the food and beverage experience at its venues, thus driving higher footfall and longer dwell times. Todd George, Executive Vice President of Operations at PENN, noted that bringing a well-loved brand like Shake Shack into the company’s core casino assets reflects its ongoing reinvestment into modernising its portfolio.

The partnership also fits well with PENN’s broader vision of creating integrated entertainment hubs that blend gaming, dining, sports betting, and lifestyle experiences. Shake Shack’s high brand affinity among millennials and Gen Z complements PENN’s ambition to attract a younger demographic, particularly through its online and media partnerships such as ESPN BET and theScore.

How Does This Fit into Shake Shack’s Expansion Model?

Shake Shack’s expansion into PENN Entertainment properties represents a continuation of its strategy to grow beyond traditional high-street and mall-based locations. Since the original Shack opened in New York City’s Madison Square Park in 2004, the brand has evolved into a global phenomenon with over 590 locations worldwide. Of these, over 380 operate in 34 U.S. states and Washington, D.C., while international outlets span key cities like London, Tokyo, Seoul, Dubai, and Singapore.

The licensing model used in the PENN agreement enables Shake Shack to expand rapidly and efficiently without the high capital expenditure typically required for company-operated stores. The format flexibility also allows Shake Shack to customize offerings for non-traditional environments—such as casinos—where foot traffic patterns, customer expectations, and operational constraints differ from its urban and suburban core.

Additionally, Shake Shack continues to integrate technology into its expansion approach. Its mobile ordering platform, the Shack App, allows for seamless digital ordering and pickup, which could prove particularly effective in the casino setting, where customers value convenience and speed.

What Does This Deal Mean for PENN Entertainment’s Dining Strategy?

The collaboration is consistent with PENN Entertainment’s evolving food and beverage strategy, which aims to elevate the quality and diversity of dining options across its properties. With the hospitality industry placing renewed emphasis on destination dining, PENN’s move to incorporate a cult-favorite like Shake Shack reinforces its commitment to enriching the overall guest experience.

PENN’s property portfolio includes established brands like Hollywood Casino, L’Auberge, and River City Casino, along with ESPN BET and theScore BET digital platforms. By embedding high-recognition food brands into these environments, PENN aims to improve customer retention, extend time on property, and enhance the cross-sell potential between gaming, dining, and entertainment segments.

As PENN continues to leverage its media partnerships—especially with ESPN—it may find opportunities to blend Shake Shack openings with event-based promotions, sports viewing activations, or loyalty tie-ins via the PENN Play rewards program, which already boasts a user base of around 32 million members.

Could This Signal a Broader Food-Entertainment Convergence Trend?

This partnership underscores a growing convergence between hospitality-driven entertainment and high-quality food offerings. As casinos, stadiums, and theme parks seek to differentiate themselves in a highly competitive market, the addition of premium food brands becomes a key strategic lever.

Industry observers note that Shake Shack’s licensing model positions it well for such collaborations, allowing the brand to extend its reach without straining core operations. Moreover, the PENN agreement may serve as a test case for further expansions into similar entertainment venues, whether through travel hubs, resorts, or sports complexes.

From a competitive standpoint, Shake Shack’s move could prompt rival fast-casual brands to explore similar partnerships. With consumer preferences increasingly leaning toward experiential and convenience-driven dining, strategic co-location models could become a core component of growth plans across the sector.

Shake Shack Inc. (NYSE: SHAK) and PENN Entertainment, Inc. (Nasdaq: PENN) both saw modest stock movements in the immediate aftermath of the announcement, reflecting a cautiously optimistic investor response. While the licensing deal is not expected to be materially accretive to either company’s near-term financials, analysts view the collaboration as a smart long-term brand alignment with cross-sector benefits.

PENN Entertainment’s emphasis on strategic partnerships continues to appeal to analysts watching its digital and land-based convergence strategy. The company’s ability to fuse physical casinos with digital betting, content, and loyalty integrations has helped differentiate it from other regional casino operators.

Shake Shack, meanwhile, has been praised for maintaining premium positioning even amid expansion. Analysts believe that a measured approach to licensing—focusing on brand consistency and operational excellence—can drive shareholder value over time.

What Comes Next for Shake Shack and PENN?

Pending regulatory approvals, construction timelines, and integration planning, the first two Shake Shack locations under this partnership are expected to open sometime in 2026. Both companies indicated that additional sites would be announced in due course, with PENN likely to target casinos in high-volume regions that align with Shake Shack’s brand profile.

The companies did not disclose financial terms of the licensing arrangement, but future filings and investor updates may shed light on the expected revenue-sharing structure, capital expenditure responsibilities, and long-term renewal options.

As Shake Shack continues to evolve its real estate and channel mix, analysts expect the company to pursue further expansion in transit, entertainment, and travel venues where its high-quality, convenience-forward model resonates with customers.

For PENN Entertainment, the partnership reflects an evolving entertainment portfolio that increasingly incorporates lifestyle elements—from food to sports media to immersive betting experiences. By integrating Shake Shack into its next phase of property refreshes, PENN is positioning itself to remain competitive in a market that increasingly rewards integrated, experience-rich offerings.