PENN Entertainment increased year-over-year sports betting revenue even as it undertakes a massive rebrand and strategic shift.
- PENN posted a $78-million YoY EBITDA gain in its interactive segment, driven by iCasino growth, modest OSB gains, and major marketing cuts.
- theScore Bet rebrand signals a shift toward Canada, higher-value users, and iGaming cross-sell over low-margin sportsbook expansion.
- The company targets Q4 profitability as it leans into cost discipline, stronger retention, and improved unit economics despite near-term launch costs.
PENN’s interactive division is beginning to show clearer signs of stabilization following its transition to theScore Bet, company management said during a corporate earnings call Thursday, stressing improved cost discipline, stronger iCasino performance, and a more targeted market focus.
CEO Jay Snowden outlined a materially different operating posture compared to earlier phases of the digital business, particularly in how PENN allocates capital and prioritizes growth segments. The initial three-month period of 2026 was the company’s first full quarter since it rebranded its sportsbook from ESPN BET in December 2025 to its in-house theScore Bet brand.
The shift is evident in both financial performance and operational commentary.
PENN reported a $78-million year-over-year improvement in interactive segment adjusted EBITDA in Q1, driven by 15% iCasino revenue growth, 5% online sports betting growth and a roughly 65% year-over-year decrease in marketing spend. Online sports betting revenues improved from $62 million in Q1 2025 to $65.2 million in the first quarter of 2026.
That progress comes as the company leans away from broad-based sportsbook expansion toward higher-margin verticals and geographies.
“The backdrop here is that we really have shifted our focus the last six months and certainly throughout Q1 from the online sports betting-only states in the U.S. to much more of a focus on a prioritization of customer acquisition in Canada, as well as the states that offer both iGaming as well as online sports betting,” Snowden said. “So from our perspective, the progression through the quarter looked quite good.”
The approach reflects a broader industry trend where standalone sportsbook economics have tightened, particularly following aggressive promotional competition and the emergence of adjacent betting products, Snowden added.
PENN officials said the sports betting revenue and adjusted EBITDA growth came despite a year-over-year decrease in sports betting handle and monthly active users. Snowden said the company has pivoted away from lower-value customers to a prioritization of its most profitable segments.
“We're very focused on our higher-worth customers on the sports betting side that's working for us,” Snowden said. “Retention in those areas has been, I'll say fantastic, and we expect that to continue.”
Online gaming pivot
PENN’s internal data reinforces that pivot. Roughly 60% of its iGaming activity is sourced from sportsbook cross-sell, per the earnings release, making integrated markets structurally more attractive.
Canada, anchored by PENN's Toronto-based theScore brand, has become a central driver of that strategy. Snowden pointed to sustained momentum in Ontario and expressed confidence ahead of Alberta’s July 13 commercial gaming launch, where PENN expects similar market share dynamics.
That last point marks a notable evolution from the initial ESPN BET rollout, which leaned heavily on sportsbook-led customer acquisition. Post-rebrand, PENN appears more willing to accept lower sportsbook volume in exchange for higher-quality users and improved unit economics.
Snowden acknowledged that trade-off directly, noting intentional attrition among lower-value customers.
“We've lost some of the unprofitable and lower worth that was by design as we pulled back on reinvestment and some and some key strategic areas, and we're feeling really good about having a handle on everything,” he said.
Marketing efficiency has been a major lever in that transition. PENN reduced marketing spend even beyond its original projections. Rather than a one-time adjustment, Snowden characterized the shift as structural.
“I think it's just us continuing to, you know, get better and smarter and be more judicious in terms of where we're allocating marketing dollars every week, every month, every quarter,” Snowden said.
The result is a leaner cost base that positions the interactive segment for a potential inflection point. PENN expects small losses through Q2 and Q3, largely due to Alberta’s projected $20-million promotional-related launch costs, before turning profitable in Q4.
Underlying that trajectory is continued strength in its standalone Hollywood iCasino, which Snowden highlighted as a key growth engine. As with its competitors, real-money online casino gaming platforms provide higher, more consistent profits than season- and outcome-dependent sportsbooks.
PENN paid Disney $150 million a year for branding rights to its propriatory sports betting platform. Despite massive marketing spend and exposure from the "Worldwide Leader in Sports," PENN consistnatly fell far short of its projections of a 20% market share.
The company's online struggles, especially in comparision to its sustained brick-and-mortar success, led to major coproprate pressures. This culminated in new board members after a pressure campaign from a leading investor as well as a shake-up of many of its top corporate officers.
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Future impact
PENN's iCasino performance is helping offset softer trends in online sports betting, where industry-wide pressures have weighed on user growth and handle. Instead, the company is positioning its sportsbook as a feeder channel into higher-margin casino products while maintaining a presence in key markets for long-term optionality.
The strategic recalibration appears to be gaining traction. Retention among high-value users has remained strong post-rebrand while overall economics continue to improve. Snowden suggested that stability in key metrics is now the baseline, with growth expected to follow.
Sports betting handle and monthly active users fell year-over-year in PENN's first full quarter since rebranding from ESPN BET to theSCcore bet, but the company increased revenue 5%; Adjusted EBITDA improved by nearly 88%, largely due to massive cutbacks in marketing spend
— Ryan Butler (@ButlerBets) April 23, 2026
Taken together, PENN’s interactive division is transitioning from a high-spend market entry phase into a more disciplined, margin-focused model. While the ESPN BET rebrand initially raised questions about scalability and competitiveness, current trends suggest the company is carving out a differentiated approach centered on iCasino, Canada, and cost control.
If Q4 profitability materializes as guided, it would mark a meaningful milestone - not just for PENN’s digital segment but for validating a strategy that diverges from the industry’s earlier growth-at-all-costs playbook.
