Penn Entertainment expects its online business to turn a profit this quarter and stay in the black through 2027. CEO Jay Snowden said Thursday on the company’s third quarter earnings call that the interactive segment was already profitable in October and running slightly ahead of internal expectations.
“2027 will be profitable for the year,” Snowden said on the analyst call. “You can take that to the bank. Q4 this year will be profitable. We were in October and actually a little ahead of where we expected to be, so we’re feeling really good about that.”
Penn reported $348.4 million in interactive revenue for the third quarter, including a $191.4 million skin tax gross-up. The adjusted EBITDA loss was $18.3 million, compared with a $76.6 million loss in the third quarter of 2025, a 76.1% year-over-year improvement.
CFO Felicia Hendrix said Penn expects fourth quarter interactive revenue of $445 million and adjusted EBITDA of $18.7 million. That would leave the segment with a $20 million adjusted EBITDA loss for the full year, matching the $20 million Penn invested in its Alberta launch.
Beyond the digital momentum, Penn is “ready to play offense,” Snowden said, as gambling expansion in Texas looks more realistic than it did before the midterm elections.
Penn’s stock was down in early trading Thursday but leveled off and closed at $17.33, down 0.6%.
Online sports betting still adjusting after rebrand
Penn’s digital business spent years trying to build a podium sports betting app with Barstool Sports and Disney for ESPN Bet. The company recorded an $825 million impairment charge on the interactive segment in 2025.
Penn ended its ESPN partnership and relaunched its U.S. sportsbook as theScore Bet on Dec. 1, 2025. In the U.S., it has since focused on its standalone Hollywood online casino app.
Across North America, online casino revenue rose 6.4% year over year to $76.3 million in the third quarter, while online sportsbook revenue fell 12.7% to $50.3 million. Hendrix said the lower volumes in U.S. online sports betting and integrated online casino were expected.
“Our fourth-quarter guidance assumes continued revenue growth in two of our key strategic focus areas, U.S. standalone iCasino and Canadian operations, while we expect U.S. online sports betting and U.S. integrated iCasino trends to continue adjusting to normalized levels post theScore Bet rebrand,” Hendrix added.
Snowden noted that iGaming is now roughly half of adjusted interactive revenue. He called the vertical “a much more predictable revenue stream at a much higher margin profile.’
Alberta already near Ontario market share
Alberta sports betting and iGaming launched in mid-July and have produced C$122.1 million in non-adjusted gross gaming revenue in the first 80 days. iGaming accounted for 75.6% of that total, while sports betting made up 19.6%.
Snowden said the Alberta launch was more crowded than Ontario’s, because “everybody was pretty much at the starting gate at the same time.” Still, Penn is off to a strong start, particularly in sports betting.
“We have always said, very low double digit on the OSB market share in Ontario, and we are super close to hitting that number after the first three months in Alberta, and it has momentum,” Snowden said. “Our sports betting handle has actually been outpacing the market when you look on a month-over-month basis over the first four months.”
Snowden said the sports betting total addressable market in Alberta “looks about what we expected.” The online casino market, however, is larger than Penn anticipated, which leaves the company room to grow.
“I would say on the iCasino side, we’re about halfway to where we are in Ontario,” Snowden said. “… Alberta iCasino, the [total addressable market] looks larger than we expected, and our market share, we’ve got a lot of running room, but we’re off to a solid start with more opportunity for upside.”
Possibilities of gaming expansion
Tuesday’s midterm elections may have opened doors for gaming expansion in several states.
The biggest shift came in Texas, where Democratic state Rep. Vikki Goodwin defeated Lt. Gov. Dan Patrick. Goodwin becomes the first Democrat to win a statewide race in Texas since 1994.
The lieutenant governor presides over the Texas Senate and controls which bills advance. Patrick used that power to block gaming expansion since taking office in 2015. Goodwin supports letting voters decide on the issue, according to her campaign website.
Snowden said Penn has been investing in Texas for decades. The company owns two of the state’s three Class 1 thoroughbred tracks: Sam Houston Race Park in Houston and Retama Park in Selma, near San Antonio. He also cited a strong relationship with the Chickasaw Nation, which owns the third track, and with other “movers and shakers” in the state.
“We’re not sure what comes out, but we will be spending even more time than we typically do in the state of Texas, and we’ll be ready for whatever comes out of Texas,” Snowden said. “But we think we’re positioned as well, if not better, than really anybody in the sector if something does happen in Texas.”
On iGaming, Snowden called D.C. and Virginia “the warmest” prospects for legalization. He added that Ohio Governor-elect Amy Acton “was definitely more pro or at least open to iGaming expansion,” though Republicans still control both chambers of the legislature.
