PENN Entertainment, the US-based sports betting and casino gaming firm, has chosen to prioritize online casino gaming as it restructures its digital approach, reducing its dependence on sports betting.
This shift was announced by Jay Snowden, CEO of Penn National Gaming, during the firm’s Q1 earnings call, highlighting a rising conviction that iGaming delivers steadier and more lucrative long-term profits. Additionally, this move occurs just days after PENN mutually terminated its partnership with ESPN.
The data seems to back this perspective. In Q1 2026, PENN posted a 15% year-over-year increase in online casino revenue, versus a milder 5% growth in sports betting. Altogether, its Interactive segment brought in $358.3 million in revenue and achieved segment profits of $172.5 million, reflecting improved margins under the new strategy.
Company leaders characterized this quarter as the first full period running under a ‘realigned’ plan. PENN has concentrated on areas where online casinos are legal, especially specific US states and Canada, while also strengthening its cost structure. Canada has become a significant driver of digital expansion, together with PENN’s independent Hollywood Casino app in the US.
This change in direction reflects wider US iGaming market patterns, where companies are emphasizing the superior margins of online casino offerings over sports betting. For players assessing their choices, the highest-rated online sportsbooks now frequently provide both attractive odds and complete iGaming packages.
Following the ESPN split
PENN has also made intentional decisions regarding its clientele. Following the departure from the ESPN Bet brand and the reintroduction of theScore Bet, the company was willing to release a portion of low-value customers. CEO Snowden clarified that this was entirely deliberate, as the emphasis now moves to users who provide stronger long-term value. Thus far, retention rates are performing largely as anticipated.
A major component of this change involves leaving markets that permit only online sports betting. The firm acknowledged that those areas do not provide comparable margins, so it is now reallocating marketing budgets to ‘hybrid’ markets, regions where both sports wagering and online casino offerings are accessible, and overall profits are generally higher.
In such regions, the capacity to cross-sell across verticals is considered a key benefit. This rationale also underlies PENN’s recent withdrawal from Washington, D.C., where theScore Bet stopped services in February. According to PENN, the move was driven by low volume and restricted commercial feasibility, not regulatory issues. Currently, no additional exits are scheduled, but each market will still be evaluated on its own merits.
Ambitions to enter additional states
In spite of the lowered focus, sports betting continues to have a part in the company’s income plans. Instead of being a main revenue source, it is more and more considered an entry point to online casino offerings. Internal data indicates that roughly 60% of its iGaming customers in regions offering both products were originally attracted via sports betting. This cross-selling mechanism is regarded as essential for future expansion.
Meanwhile, the sports wagering environment is growing increasingly competitive. Mounting customer acquisition expenses, heightened promotional efforts from competitors, and the arrival of prediction market platforms are squeezing margins.
Given this context, PENN’s choice to cap expenditure in sportsbook-only areas seems driven equally by fiscal restraint and strategic focus. Company officials suggested that additional US states might eventually approve online casino gaming, and PENN plans to be prepared should that occur.
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