PENN Entertainment put a date on its digital turnaround this week. On the company’s third-quarter earnings call, a PENN executive said the Interactive segment will be profitable in 2027, a notable promise from a business that still lost money last quarter.
PENN, which operates Hollywood Casino, Ameristar and theScore Bet, has seen its digital losses shrink fast. PENN reported an Interactive adjusted EBITDA loss of $18.3 million in the third quarter, down from $76.6 million a year earlier, even as the company’s retail casinos posted record revenue.
Total revenue rose 7% to $1.84 billion, and net income more than doubled to $32.6 million, according to the company’s earnings release filed with the SEC. Consolidated adjusted EBITDAR climbed 7.7% to $501.8 million, with the Northeast region leading retail at $708.3 million in revenue.
CEO Jay Snowden credited the retail segment, along with “continued progress toward Interactive profitability,” and said the healthy trends carried into October. Retail revenue at the properties has now grown for eight consecutive quarters, and Snowden also cited further balance sheet deleveraging. PENN raised its 2026 retail guidance by $16 million in revenue and $10 million in adjusted EBITDAR, to $5.89 billion and $1.973 billion.
Interactive revenue grew 17% to $348.4 million. That headline needs context, because it includes a gross-up for gaming taxes that PENN is reimbursed for, which came to $191.4 million this quarter versus $139.5 million a year earlier.
Strip that out and the picture changes. Adjusted Interactive revenue was $157.0 million, down 0.8% from $158.2 million. So the improvement came from cost and margin, not from bigger sales.
The company pointed to U.S. standalone Hollywood iCasino and Canada as the growth engines, including early results from its new Alberta operations, where the company says it holds roughly 10% of the online market. Management said online casino now makes up roughly half of non-tax Interactive revenue, which it described as steadier and higher-margin than sports betting.
The call’s boldest line came on the outlook. Chief technology officer Aaron LaBerge said “2027 will be profitable for the year,” and the company reaffirmed its full-year 2026 Interactive adjusted EBITDA target.
For the fourth quarter, PENN guided to Interactive revenue of $445 million, including a $242 million tax gross-up (about $203 million without it), and projected adjusted EBITDA of $18.7 million. That would be a positive result after losses in earlier quarters. Nine-month Interactive losses are already down 83% to $38.7 million.
The turnaround follows a strategy reset. PENN ended its alliance with ESPN last year and moved its U.S. sportsbook to theScore Bet.
Sports betting results can swing quickly. PENN’s own 2025 third-quarter release blamed customer-friendly hold and lower sportsbook volume for missing expectations, and a few weeks of unlucky results can erase a good quarter.
Online casino is less volatile, which is one reason management is leaning on it. Even so, a good quarter does not guarantee the next one.
The fourth-quarter report will show whether PENN reaches the $18.7 million Interactive profit it guided to. Analysts will also watch whether adjusted revenue returns to growth, and whether Alberta and other Canadian provinces add to results next year.
