PENN Entertainment’s online gaming platforms set a combined revenue record and reduced its financial losses in 2025’s second quarter, a step company officials project will help push its digital division to profitability by the end of the pivotal upcoming football season.
- PENN’s digital division set a revenue record of $316M in Q2 2025.
- ESPN BET’s integration with ESPN’s fantasy platform and enhanced features like parlays and in-game betting aim to improve market share and profitability.
- Despite growth, ESPN BET still trails major rivals in users and revenue.
PENN’s combined digital gaming division generated $316 million in revenue in the second quarter of 2025 compared to roughly $233 million in Q2 2024. For the first half of 2025, PENN has generated more than $606 million in revenue from its interactive division compared to $440 million during the same stretch in 2024.
The division includes ESPN BET, Hollywood iCasino and Ontario-only theScore Bet online sportsbook and iCasino, as well as the company’s retail sportsbooks.
Adjusted EBITDAR losses from the interactive division improved from a loss of nearly $103 million in Q2 2024 to a loss of $62 million in Q2 2025. For the first half, losses were almost cut in half from nearly $299 million to a loss of $151 million.
PENN has yet to post a positive Adjusted EBITDAR quarter since its November 2023 launch of ESPN BET, its most prominent U.S. digital asset. The company has spent billions on its sports betting platform and accompanying player acquisition costs, leading to increasing pressure to show a long-term path to profitability now being achieved by many of its rivals.
New offerings
ESPN BET has made “great strides” in its in-house risk and trading platform while expanding wagering options, PENN CEO Jay Snowden said during his company’s earnings call Thursday. This has included expanded parlay and in-game betting availability, two higher-margin types of wagers that increasingly make up U.S. sportsbooks’ bottom lines.
Snowden said ESPN BET hold rates have improved in each of the past two quarters and the company expects that to continue going forward.
The company is also taking further steps to work with ESPN ahead of the sports network’s direct-to-consumer streaming service launch later this month. The new streaming service will include betting and fantasy content tailored to ESPN BET users.
ESPN parent Disney and PENN announced earlier this week the integration of ESPN’s fantasy football platform with the sportsbook. ESPN BET’s Fan Center feature will allow eligible fantasy football players to bet directly on their lineups or favorite teams from within the sportsbook itself.
“This type of integration with ESPN is what sets ESPN BET apart from our competitors and we can't wait for football season to showcase it,” Snowden said Thursday.
Market Overall
These moves come as ESPN BET has trailed several other high-profile sportsbooks in users and revenues.
After spending billions of their own on product and player acquisition, FanDuel and DraftKings each now generate more than a billion dollars in quarterly revenues from their digital sportsbooks and iGaming platforms and typically post profitable quarters of Adjusted EBITDA. The two U.S. market share leaders each have more than 30% sports betting market share across the U.S., compared to around 3% for ESPN BET.
Ahead of its 2023 launch, ESPN BET had projected as much as 20% market share, challenging FanDuel and DraftKings for “podium” position.
Entering the 2025 football season, ESPN BET also trails publicly traded sportsbook operators BetMGM, Caesars, and BetRivers in average quarterly profits. Monthly state-specific revenue reports also indicate ESPN BET’s market share lags behind Fanatics and bet365, which don’t disclose their total nationwide revenues publicly.
After achieving low single-digit marketshare using the Barstool Sports name, PENN left for a similar branding deal with ESPN in 2023. Two years into the partnership, PENN has not been able to convert the ESPN platforms' millions of monthly users into sportsbook customers. The U.S. market share leaders have attributed much of their success to product innovations, particularly live bets and single-game parlays, which ESPN BET has so far not been able to replicate.
ESPN BET’s small market share and continued financial losses have led to criticism from investors, including a 2024 shareholder letter opposing the company’s digital efforts and a hostile 2025 push from an outside private equity firm for seats on the company board.
Preview of ESPN BET's pending Fan Center feature that allows users to integrate their ESPN Fantasy team rosters with the book (via $PENN Q2 earnings presentation) pic.twitter.com/gQenKoIjqN
— Ryan Butler (@ButlerBets) August 7, 2025
The calendar year’s third and fourth quarters encompass nearly all of the NFL and NCAA football seasons, America’s two most wagered-upon leagues. It presents PENN’s next best, and potentially final, football season to show long-term financial viability.
Company officials Thursday reiterated projections that despite increasing revenues in Q3, PENN’s digital arm would lose between $65 and $45 million in adjusted EBITDAR. PENN projects another quarterly revenue record in Q4, enough to generate a positive gain of $5 million in Adjusted EBITDAR.
Falling short of those projections could lead to the end of the deal between ESPN to brand PENN’s sportsbook, which either side can terminate in August 2026. Snowden again acknowledged that possibility during Thursday’s earnings call before expressing confidence his company’s digital arm was positioned for long-term success.
“As I said on our Q1 call, we are nearing an inflection point with our digital business, and we anticipate each quarter of 2025 delivering a lower loss sequentially throughout the year, and our interactive division to be profitable in the fourth quarter of 2025 and the full year of 2026, and beyond,” Snowden said. “This is still the case. The significant investments in interactive are undoubtedly behind us.”
