Penn Entertainment will be focused on keeping its current digital customers over the next few months, after ending its ESPN Bet partnership with Disney.
Penn did not update its digital EBITDA outlook for 2026 despite the end of $150 million in annual payments to Disney in exchange for licensing the ESPN brand. It instead opted to push that update out until its year-end earnings call in February. Penn and Disney’s partnership will be over effective Dec. 1.
The 2026 outlook remains, for now, aiming for break even or positive EBITDA for the full year, as Penn works to keep its sports betting and online casino customers through a third brand switch.
That said, marketing for theScore Bet brand, which left the US in 2022 and is currently only in Ontario, will be “significantly below” the annual spend for ESPN Bet, with most of that cash falling to the bottom line, CEO Jay Snowden said on Thursday morning’s earnings call.
‘Good plan’ for retention
Snowden said there will be a lot of work done between now and the year-end call in February to better understand the economics of the remaining digital business.
“I think we have a very good plan around retention, we’ve been working on this plan for a couple of months now, and so we’re going to know a lot more in February and we’re going to continue to adjust our cost structure and our marketing spend assumptions based on what we’re seeing around retention and revenue projections as we go into 2026,” Snowden said.
“So, long-winded way of saying we have full control over all of those variables, so stay tuned, we’ll have more to share in February. But the goal is to move away from losses in digital and turn that around and really start generating significantly more free cash flow as a company.”
Penn focused on one goal for digital
Snowden noted there were four primary goals in jumping into online casino and sports betting.
He said the company achieved three:
- establish a younger database by about seven years on average compared to 2019
- cross-selling those younger customers to the retail casinos
- ensure Penn is ready for what comes next in the gaming industry.
The fourth and final goal, making money from digital, is the focus for 2026, he said.
Same app this time around
Remaining a customer with Penn will be nearly frictionless this time around compared to the switch from Barstool Sportsbook to ESPN Bet in November 2023. Back then, Penn asked its digital database to download and reregister with a new sports betting app in the middle of the NFL season.
This time, the app will simply update the branding as jurisdictions approve the name switch to theScore Bet, which is currently expected to happen by mid-December. All customer accounts and data will remain, and Snowden thinks the company is in a “good spot” to retain customers.
“Look, [chief technology officer] Aaron [LaBerge] and team have done a great job improving the product and experience, our feature set, our [user interface and user experience], and if you look at retention results this year at the first two months of football season versus last year, significant improvement,” Snowden said. “So we’re going to be laser-focused on retention of existing users and then also getting some of these Score Media users that maybe currently aren’t using ESPN Bet to use theScore Bet in the US as we move forward.”
TheScore media app has 2.6 million monthly active users in the United States with roughly two-thirds of them in legal online sports betting states, Snowden said.
Penn reports solid online casino results
Not much of the call focused on the actual third quarter results but the investor presentation broke down some key areas of success in online casino.
The company saw online casino monthly active users grow 79% in the third quarter compared to last year with a 41% increase in net gaming revenue. Penn reported 62% record cross-sell for the quarter as well.
The standalone Hollywood Casino app has also helped with growth since its launch last December. As of September, the active retail database that also plays online in states with retail casinos – Pennsylvania, Michigan and West Virginia – stood at 14.4%. That is up from 9.0% from December 2024.
Predictions a ‘major threat’
Snowden’s comments about prediction markets are some of the most damning from a gaming company yet as he called their evolution a “major threat to the industry.”
While he started by saying he would give the canned expression that Penn is monitoring the situation and will follow the direction of their regulators, Snowden then jumped into a tangent about how the sports betting industry and its fellow stakeholders in regulators and legislators need to do more than take a wait-and-see approach.
“With all that said, I do think as an industry that we’ve got to play some offense here,” Snowden said. ” … Because the posture that we’re taking at this point is very defensive. It’s going to take a long time to play out [in the courts] and it doesn’t feel, at the moment, like the winning hand.”
Snowden also said innovations including predictions on casino games, such as the next blackjack hand or roulette number, are probably already being talked about by operators like Kalshi and Polymarket. Those kind of products could come about in a matter of months, not years, he added.
