Online Casino Takes the Lead in PENN’s Digital Strategy

Yet another shift is emerging in how major operators are thinking about real-money online gambling. PENN Entertainment has moved online casino gaming to the center of its digital strategy after its latest results showed iGaming outperforming sports betting in both growth and consistency.

From its Q1 2026 update, the company signaled a more focused approach, prioritizing markets where online casino and sports betting operate side by side, while scaling back efforts in sportsbook-only regions. The adjustment reflects a broader industry reality, steady casino revenue is proving more reliable than the volatility that often comes with sports betting cycles.

Why iGaming Is Driving More Stable Growth

PENN reported $358.3 million in interactive revenue for the quarter, with adjusted EBITDA reaching $172.5 million. Online casino revenue rose 15% year-on-year, compared to a 5% increase in sports betting.

Executives pointed to the consistency of casino products as a key factor. Unlike sportsbooks, which are heavily influenced by sporting calendars and betting outcomes, online casinos tend to deliver more predictable returns over time.

The company’s Hollywood Casino app stood out as a strong performer, posting record revenue during the quarter, including its best-ever March. That kind of stability is increasingly shaping how operators allocate budgets and resources.

Combining Casino and Sports Betting

Despite the renewed focus on casino, sportsbook products remain part of the long-term strategy. The reason is simple, they act as a pipeline.

PENN said around 60% of its online gaming revenue in markets where both verticals are legal comes from sportsbook cross-sell. Players who start with sports betting often transition into casino play, making the combination more valuable than either product on its own.

This “dual-product” model is becoming more important as operators look to maximise lifetime value rather than short-term acquisition spikes. Markets that allow both are now seen as significantly more attractive than those limited to sports betting alone.

The Operator’s More Disciplined Approach to Spending

The strategy shift is not just about product focus. It is also about cost control. PENN has reduced marketing spend significantly, with reports suggesting a drop of around 65% year-on-year, and has deliberately moved away from lower-value sportsbook customers.

That more selective approach has already led to decisions such as exiting Washington, D.C., where the company said market conditions did not justify continued investment. At the same time, retention among higher-value users has remained stable, suggesting that cutting less profitable segments has not weakened overall performance.