PENN Entertainment expects prediction markets to intensify competition for sportsbook customers during the 2026 NFL season, but executives say the company will stick to its disciplined marketing strategy rather than chase an industry-wide customer acquisition battle.
- PENN expects prediction markets to intensify competition during the NFL campaign, but says it already anticipated an "arms race" for customers and has no plans to alter its strategy.
- The company is prioritizing profitability over market share by reducing spending on lower-value sportsbook customers, improving marketing efficiency even as promotional competition escalates.
- PENN's approach reflects a broader industry shift as major gaming operators increasingly discuss prediction markets while emphasizing disciplined customer acquisition and profitability.
Speaking during PENN's second-quarter earnings call Thursday, CEO Jay Snowden said the company built its financial outlook assuming the upcoming football season would feature unusually intense customer acquisition efforts, driven in part by a group of prediction markets participating in their first full NFL campaign.
"You're going to have prediction markets that are targeting customers for the first football season ever, given the timeline of when they actually went live as close to the Super Bowl last year,” Snowden said. “So we already assumed it was going to be a very aggressive, irrational marketing spend, advertising, and new customer acquisition approach this football season.”
FanDuel, DraftKings, and Fanatics, the three largest sportsbooks by handle, all launched prediction market platforms in December 2025. Kalshi, which began offering sports event contracts in 2024, has been the clear trading volume leader in an increasingly crowded U.S. market that now includes Polymarket and a host of other well-funded competitors.
As major American gaming operators have already jumped into the space, and others such as Rush Street Interactive are considering following suit, PENN has maintained a distance from prediction markets - and a focus on online sports betting profitability.
"The way we're thinking about it, it hasn't changed in terms of our approach because we anticipated football season being quite the arms race this year," Snowden said.
PENN finds its lane
The remarks underscore how rapidly federally regulated event contracts have become part of the competitive conversation across the sports betting industry.
Unlike previous earnings cycles a year ago, when prediction markets received little attention from operators, executives this quarter have increasingly acknowledged them as another avenue competing for sports betting customers, even as companies continue to debate how meaningful their long-term financial impact will ultimately become.
Snowden suggested prediction markets are only one component of what he expects to be an unusually “aggressive” fall.
But PENN’s more disciplined 2026 approach contrasts with the intense promotional campaigns that most sportsbooks have historically launched at the start of football season. Rather than matching competitors dollar for dollar, PENN says it will continue emphasizing profitability over market share, believing the economics of acquiring customers matter more than simply growing betting volume.
The strategy has already influenced the company's digital business this year.
Executives said customer-friendly outcomes during the NBA Finals and World Cup pressured sports betting results, though Snowden said the company maintained its focus on profitability rather than promotional spending. During the second quarter, PENN reduced marketing directed toward “lower-value and unprofitable” sportsbook customers, contributing to lower wagering volumes but improving overall marketing efficiency.
That discipline helped narrow the Interactive segment's adjusted EBITDA loss to $9.5 million from a $62-million loss a year earlier, while standalone Hollywood iCasino delivered record quarterly revenue and Ontario operations benefited from strong World Cup engagement and cross-sell into online casino. PENN reported Interactive revenue of $349.4 million during the quarter while reiterating full-year Interactive adjusted EBITDA guidance of a loss of $20 million, despite trimming revenue expectations.
Industry shifts
Those results mirror a broader trend emerging across the gaming industry as operators increasingly prioritize sustainable profitability over customer acquisition at any cost.
Flutter Entertainment said earlier this week it continues to view prediction markets as complementary to traditional sportsbooks while investing in FanDuel Predicts as a long-term customer acquisition platform, particularly in states without legal online sports betting. Rush Street similarly told investors it intends to maintain a "flexible approach" toward prediction markets while monitoring the evolving competitive and regulatory landscape.
Collectively, the comments illustrate how prediction markets have become a strategic consideration for nearly every major sportsbook operator, even as executives generally continue to characterize their current financial impact as limited. For PENN, maintaining discipline does not mean expecting an easier competitive environment.
But company executives see encouraging signs heading into the NFL season.
Approximately 70% of PENN sportsbook users wagered on the World Cup during the quarter, while roughly 45% of those bettors placed a soccer wager for the first time. Executives described the tournament as a meaningful customer engagement and reactivation opportunity before football begins, while the company's recently launched Alberta operations have generated “encouraging” early customer and handle trends on a per-capita basis.
Whether prediction markets ultimately reshape the competitive landscape remains uncertain as legal battles between Kalshi, federal regulators, and multiple states continue to work through the courts. But with multiple high-profile prediction market operators now entering their first full NFL season, PENN's comments suggest the industry's newest competitors are already influencing how traditional sportsbook operators plan for their most important time of year.
Snowden pointed to Michigan as an example of a market where already aggressive competition has intensified following the launch of Hard Rock and other operators in the past 12 months. PENN believes its performance there demonstrates the company can withstand similar pressures during football season.
“We already assumed in our projections for the remainder of the year that it would be very competitive,” Snowden said, “and we think we're faring quite well, in states like Michigan, where we're already seeing an environment like that.”
