PENN Entertainment used its second-quarter earnings call to make one thing clear: after the expensive end of its ESPN Bet partnership, the company's growth story now runs through online casino, not sports betting. The results backed the pivot. PENN swung to a net profit of $32.6 million, up from an $18.3 million loss a year earlier, on revenue of roughly $1.8 billion and consolidated adjusted earnings of $312.6 million, well ahead of last year's $236 million. The details here come from PENN's report and reporting by SBC Americas and others.
The engine was a record retail casino quarter, about $1.5 billion, but the strategic emphasis was the interactive segment, which brought in $349.4 million. That business, which houses theScore Bet, theScore Casino, and PENN's online Hollywood Casino, is still losing money, but the loss is narrowing as the online-casino side grows. CFO Felicia Hendrix pointed to solid growth in US iCasino and the company's Canadian operations, and CEO Jay Snowden said the standalone casino apps have grown strongly since launch. PENN's US Hollywood-branded standalone casino app hit record revenue in the quarter.
Bettors won, and PENN still made money
Like its larger rival Flutter, PENN flagged "customer-friendly" sportsbook outcomes in the quarter, most of them in June around the NBA Finals and the World Cup. In plain terms: bettors won more than usual, which squeezes sportsbook margins. That PENN grew profit anyway is the point it wanted investors to take away, that a casino-led digital business is less exposed to the swings of sports results than a sportsbook-led one. The World Cup was also a customer-acquisition event: PENN said roughly 70% of its sportsbook customers placed a World Cup wager, and about 45% of those were betting on soccer for the first time.
Geography told its own story. PENN said Ontario is its largest online sports betting market, while Pennsylvania has become its most profitable online casino market, a reminder that the iCasino states, where legal online casino gaming exists, are where the digital margins actually live.
The Alberta bet, and a guidance trim
PENN is spending to expand. In July it launched three standalone apps, theScore Bet Sportsbook & Casino, Hollywood Casino, and theScore Casino, in Alberta, which is opening its online gambling market beyond the former government monopoly. That expansion carries a near-term cost: PENN trimmed its full-year interactive revenue guidance to about $1.5 billion, down from $1.6 billion, and warned that the third quarter will be its largest quarterly loss of the year because of the Alberta investment. It is the familiar trade of short-term losses for a foothold in a newly opened market.
Sitting out the prediction-market fight
The most forward-looking part of the call was about a competitor PENN has chosen not to become. As prediction markets like Kalshi and Polymarket push into sports, PENN is deliberately staying out of that business, with Snowden describing the legal controversy around sports event contracts as an awkward position for licensed operators and saying he hopes the Supreme Court resolves the question sooner rather than later. At the same time, PENN is bracing for those platforms to spend aggressively to win football bettors. "We anticipate football season being quite the arms race this year," Snowden said, noting it will be the prediction markets' first full football season and predicting an aggressive, in his words irrational, marketing push. PENN's answer is to prioritize profitability over chasing volume, rather than match that spend dollar for dollar.
Our take
Read together, PENN's quarter is a coherent course-correction. The ESPN Bet era was an expensive attempt to buy scale in sports betting; the post-ESPN PENN is a smaller, more disciplined company leaning on the parts that actually make money, retail casinos and online casino. Swinging to a profit in a quarter when bettors ran hot is the clearest evidence that the casino-first digital mix insulates the business from the volatility that just hammered sportsbook-heavy rivals.
For bettors, two things are worth noting. First, the iCasino tilt is why the strongest PENN promotions and products increasingly show up in online-casino states like Pennsylvania rather than at the sportsbook. Second, Snowden's "arms race" warning is a heads-up you will feel directly this fall: expect prediction markets to blanket football with advertising and sign-up offers in their first full season, which means aggressive promotions but also products that sit outside the state-licensed, consumer-protection framework that sportsbooks operate under. PENN's decision to sit that fight out, and wait on the courts, is itself a data point on how unsettled the ground still is. We will see whether discipline or spending wins the season.