Is “Penalty” a Scrabble word?

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Yes
PENALTY
Valid in at least one Scrabble dictionary

Valid in these dictionaries

SOWPODS / CSW
Scrabble UK & International
Valid
TWL / NWL
Scrabble North America
Valid
Large English Dictionary
General English word list
Unavailable

Meaning of Penalty

/ˈpɛnəlti/

noun
  1. 1.A legal sentence.

    The penalty for his crime was to do hard labor.

  2. 2.A punishment for violating rules of procedure.

  3. 3.A payment forfeited for an early withdrawal from an account or an investment.

Synonyms: punishment, punition, sentence