Penn CEO warns prediction markets’ legal ambiguity deepens industry split

Penn Entertainment's CEO Jay Snowden highlighted ongoing regulatory uncertainties surrounding prediction markets, warning of potential legal and competitive threats amid industry divergence over their future.

PENN Entertainment chief executive Jay Snowden used the company’s Q4 2025 earnings call to renew his warning about prediction markets, arguing the platforms’ legal standing remains opaque and urging a rapid judicial resolution. According to CasinoBeats and industry coverage, Snowden said the situation was “really as clear as mud” and that the matter “can’t get in front of the U.S. Supreme Court fast enough.”

During a question-and-answer session with Bank of America analyst Shaun Kelley, Snowden acknowledged prediction markets are among many factors influencing sportsbook handle but conceded Penn cannot yet quantify their effect. “I think there’s lots of variables that impact handle. Prediction markets certainly are one of those. How much? We don’t know today,” he said on the call, per reporting from industry outlets.

Snowden reiterated views first voiced in November 2025 when he described prediction markets as a “major threat” to traditional operators and warned of existential consequences if left unchecked. Coverage from November noted PENN had already altered its U.S. online strategy after concluding its ESPN Bet arrangement was not delivering the market share it had hoped for, a decision management said was mutually agreed.

Despite the debate over prediction markets, Penn reported momentum in its interactive business during Q4, with management saying the rebrand from ESPN Bet to theScore Bet in the U.S. preceded a December run of positive adjusted EBITDA and that the interactive segment is expected to reach breakeven adjusted EBITDA in 2026. Industry reporting that chronicled Penn’s earlier exit from the ESPN Bet arrangement provides context for the company’s cautious positioning.

Snowden framed prediction markets as both a legal and competitive challenge for licensed casino operators, saying regulators and attorneys general have pursued enforcement while some market platforms have pre-emptively sued regulators. He added that licensed operators risk their land-based gambling licences if they stray into products deemed illegal by regulators, noting “When regulators say, ‘This is illegal gambling, don’t do it,’ we don’t do it,” according to the earnings call transcript covered by trade press.

Other major gambling companies have taken contrasting approaches. Churchill Downs chief executive Bill Carstanjen told investors that pari-mutuel horse racing is protected by federal statute and that the company has not agreed to supply racing content to prediction markets, signalling a hard line around race content. By contrast, Flutter Entertainment has taken a more accommodating stance: its management said it found no evidence of meaningful cannibalisation after launching FanDuel Predicts in partnership with CME Group in December 2025, a product now available across multiple states.

The divergence in views underscores a wider industry split over how to handle prediction markets: some operators are pushing for legal clarity and collective action, others are experimenting with product development to capture new demand, and rights-holders such as horse-racing businesses are asserting statutory protections. As litigation and regulatory scrutiny continue, operators and lawmakers face a fast-moving policy and commercial landscape that could reshape the contours of U.S. sports wagering.

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Source: Noah Wire Services