Two readings, two different words. This is the everyday one, hǎowán, where 好 means good to do, the same pattern as 好看, good to look at. Read hàowán, with 好 meaning fond of, it describes a person who likes to play.
usage
Northern speech usually adds erhua, 好玩儿, and that is what you will hear in Beijing. The plain written form is standard everywhere.
