Penn Reports 15% Online Casino Revenue Increase, Eyes Alberta Launch For Next Leap 

In the first full quarter since Penn Entertainment stopped operating the ESPN Bet brand, the company indicated that its shift away from sports betting and toward online casino is bearing fruit — with the biggest bounty to come after the Canadian province of Alberta launches both mobile sports betting and casino on July 13.

“Canada is going to be our strongest margin market in North America, driven by volume and market share and by tax rate, and the fact that you have iCasino and OSB,” CEO Jay Snowden send on Thursday morning’s Q1 earnings call. “Canada, for us, is market number one from a margin and profitability perspective. In the U.S., in the states that have both OSB and iCasino, we are going to see much stronger margins than the OSB-only states. We are of the opinion it is probably a matter of time before many of the OSB-only states turn to some form of iGaming, and we want to stay in the business and be ready when that day comes.”

Penn now operates theScore Bet brand, which has its roots in the Canadian market. Still, Snowden alerted investors that he expects the Alberta launch to cost Penn more money than it generates in the early stages.

“We expect our Alberta launch to result in a $20 million loss in 2026,” Snowden said, “within the range we previously provided on our quarterly earnings call in February.”

On the earnings call, Penn cited first-quarter interactive revenue totaling $358.3 million, with an adjusted EBITDA loss of $10.8 million — both substantial improvements. Online casino revenue grew nearly 15% compared to the first quarter of 2025, “driven by the continued momentum of standalone iCasino, which notably achieved record quarterly revenue in the first quarter as well as record monthly revenue in March,” Snowden said.

In a note distributed shortly after the call, Truist Securities’ Barry Jones wrote, “PENN’s stock is up nicely this morning, and we continue to see scope for value/FCF (free cash flow)-oriented investors to rotate in, especially as Interactive losses begin to inflect this year and PENN’s strong FCF profile comes more into focus.”

Penn CFO Felicia Kantor Hendrix added on the call: “Importantly, we are also seeing better-than-expected performance in stand-alone iCasino in the U.S. and in Canada, which … is consistent with our interactive segment strategic priorities. We continue to expect small losses in the second and third quarter, but note that the loss in the third quarter will be the largest loss of the year due to the Alberta launch. We expect 2027 to be profitable in the interactive segment.”

Gas prices, tax increases, Maine iGaming

One analyst on the call asked about the impact of rapidly rising gas prices on Penn’s business — relevant because the company owns more than 40 brick-and-mortar casinos across the U.S.

“Gas prices are higher, although, as I have said in the past, as you look at regional gaming over the last several decades, the economic indicator that most closely correlates to behavior on regional gaming is employment, and employment continues to be a really good story in the U.S. Gas prices may be a little bit of noise and a headwind,” Snowden asserted.

“The vast majority of our customers in the regional portfolio come within a 30-minute drive, so you are probably not making a decision on the price of gas as to whether you are visiting a casino once every week or two weeks or once a month, because it is not going to cost you much to get there.”

Snowden was also asked about the trend of state legislators attempting to raise gambling tax rates (and in some cases succeeding in raising them).

“Since prediction markets have gotten aggressive on spending, and it appears there is some impact on customer acquisition costs and potentially on OSB handle, legislators and state leaders we are speaking to understand that now would not be a good time to raise taxes on incumbent operators, especially on the brick-and-mortar side,” Snowden said. “Those conversations have been ongoing but productive.”

The Penn CEO also touched on the coming launch of online casino in Maine, under legislation that favors the state’s tribes rather than commercial operators.

“We are not happy with how that was put together in Maine,” Snowden said, “as one of the two land-based operators who have paid hundreds of millions of dollars in taxes, invested a lot of money, and employ a lot of Mainers. If that ends up being implemented the way it was proposed, you should expect Penn to be investing next to zero in the state of Maine going forward.”