PENN Charts New Path With iGaming Focus After Another OSB Experiment Fails

PENN Entertainment closed the latest chapter in its media-branded sportsbook strategy, announcing on November 6 that it and ESPN had agreed to part ways, effective December 1, 2025.

The partnership began in 2023 under a 10-year licensing deal that granted PENN Entertainment the exclusive use of the ESPN BET brand in exchange for annual payments of $150 million. At the time, the companies projected that ESPN BET could capture as much as 20% of the U.S. sports-betting market by its third year.

Ultimately, the agreement fell short of expectations, yielding only about a 3% share of the U.S. online sports betting market. It was a disappointing, yet perhaps expected, outcome in what has become a long list of failed relationships for PENN. 

PENN CEO & President Jay Snowden summed up the end of the ESPN partnership this way: “When we first announced our partnership with ESPN, both sides made it clear that we expected to compete for a podium position in the space. Although we made significant progress…we have mutually and amicably agreed to wind down our collaboration.” 

With its early exit from the ESPN-branded sportsbook deal, PENN appears to be changing course as it moves to make iCasino the centerpiece of its digital growth strategy.

Snowden explained, “We plan to realign our digital focus on our growing iCasino business, while continuing to capitalize on our omnichannel advantage as the nation’s leading regional retail casino operator.” 

In other words, Penn is taking a step back from costly media-brand partnerships and shifting its attention to a segment that it believes holds greater promise: online casino gaming.

iCasino Growth Becomes Penn’s Bright Spot

When announcing its decision to shift its digital strategy to iCasino, PENN cited strong momentum in its US and Canadian operations, with Snowden saying, “PENN’s unique omnichannel strategy is anchored in a diverse portfolio of market-leading regional casinos and a complementary digital business.

“We are realigning our digital focus to leverage the strength of our U.S. iCasino and Canadian operations, while continuing to use OSB to drive both the acquisition of customers with significant lifetime value and unique cross-sell opportunities across Penn’s retail and digital assets.” (OSB refers to online sports betting.)

The data appears to support this new approach. In its Q3 2025 results, published on November 6, PENN reported that its interactive segment, including OSB and iCasino, generated revenue of $297.7 million. However, it posted an adjusted loss of $76.6 million before interest, taxes, depreciation, and amortization, known as EBITDA.

PENN said that its North America iCasino reported its highest quarterly gaming revenue to date, up nearly 40% year over year, “driven by record cross-sell from OSB of 62%” along with gains from its dedicated apps, including Hollywood and theScore Bet iCasino. 

Snowden added, “The momentum in our iCasino business continues to benefit from growing average MAUs, which experienced the third consecutive quarter of year-over-year and quarter-over-quarter increases.”

MAUs stands for monthly active users, a metric companies use to track the number of unique players who engage with their digital platforms each month. 

With record revenue and rising user engagement, iCasino now stands out as the bright spot in PENN’s broader digital strategy.

Omnichannel Strategy & theScore Bet Rebrand

PENN will rebrand its US online sportsbook to theScore Bet on December 1, when its partnership with ESPN comes to an end, the same day ESPN’s new agreement with DraftKings goes into effect. 

The company describes its decision as a part of a broader effort to strengthen its omnichannel strategy and integrate its online casino products across North America. 

Snowden said PENN’s “unique omnichannel strategy is anchored in a diverse portfolio of market-leading regional casinos and a complementary digital business,” adding that the company’s iCasino-forward approach is designed to enhance “connectivity to our 33 million-member PENN Play™ loyalty program.”

He went on to explain that PENN’s online sports betting will “continue to provide top of funnel acquisition and cross-sell opportunities for our Hollywood-branded iCasino” and that, in states where these products are legal, players will be able to access them through its OSB product or a standalone iCasino app.

TheScore has approximately 4 million monthly active users in North America and will serve as the foundation for PENN’s rebranded sportsbook. The company will also keep the 2.9 million digital users that it gained through its ESPN partnership, including 300,000 from this football season. 

Snowden said the company will “operate with a more efficient cost structure, including replacing fixed media spending with performance-based and regionally targeted marketing that complements our casino footprint,” adding that “the realignment will free up resources to strategically invest in the North American markets with strong return potential, which we expect will drive enhanced unit economics and profitability.”

These changes position PENN to lean more heavily into iCasino growth, while using its sportsbook to attract and cross-sell new players. The company expects the strategy to strengthen profitability across its retail and online portfolio.

Will PENN’s iCasino Bet Pay Off?

Without having a crystal ball to peer into the future, it’s hard to say with any certainty whether PENN’s iCasino gamble will be successful. 

However, there are some key indicators to watch, including how effectively the company migrates users to theScore Bet, maintains momentum in iCasino revenue growth, and narrows losses in its interactive segment as it heads into 2026.

It’s essential to note that the interactive segment reported a significant quarterly loss of $76.6 million, and the hold across digital operations in Q3 was lower than expected. As Snowden noted, “Gaming revenues and Adjusted EBITDA in the quarter came in below expectations due to customer-friendly hold across our digital operations and lower than anticipated OSB volumes.”

With real-money online casinos only being legal in seven states, the timelines for adding new jurisdictions are uncertain, making regulatory expansion an important variable. 

At the same time, PENN faces serious competition from larger digital-native sportsbooks and casino apps. If iCasino growth cools or the cost of acquiring new customers increases, PENN’s profitability could take a hit. 

Still, the company’s latest numbers are encouraging. The coming year will give us a better idea of whether that progress can translate into a stronger bottom line as PENN works to break even or better with its interactive business in 2026.