Yes, penalty is in the scrabble dictionary

...and is worth 14 points by itself.

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Penalty Definition

noun

A punishment established by law or authority for a crime or offense.
from The American Heritage Dictionary of the English Language, 4th Edition
Games Points scored in contract bridge by the opponents when the declarer fails to make a bid. Often used in the plural.
from The American Heritage Dictionary of the English Language, 4th Edition
Something, especially a sum of money, required as a forfeit for an offense.
from The American Heritage Dictionary of the English Language, 4th Edition
Sports A punishment, handicap, or loss of advantage imposed on a team or competitor for infraction of a rule.
from The American Heritage Dictionary of the English Language, 4th Edition
Sports An infraction of a rule; a foul.
from The American Heritage Dictionary of the English Language, 4th Edition

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Top Words by points

Points

aplenty

12

2 letter words with PENALTY

Points

ae

2

al

2

an

2

at

2

ay

5

el

2

en

2

et

2

la

2

na

2

ne

2

pa

4

pe

4

ta

2

te

2

ya

5

ye

5

3 letter words with PENALTY

Points

ale

3

alp

5

alt

3

ane

3

ant

3

any

6

ape

5

apt

5

ate

3

aye

6

eat

3

eta

3

lap

5

lat

3

lay

6

lea

3

let

3

ley

6

lye

6

nae

3

nap

5

nay

6

net

3

pal

5

pan

5

pat

5

pay

8

pea

5

pen

5

pet

5

ply

8

pya

8

pye

8

tae

3

tan

3

tap

5

tea

3

tel

3

ten

3

tye

6

yap

8

yea

6

yen

6

yep

8

yet

6

4 letter words with PENALTY

Points

ante

4

elan

4

etna

4

lane

4

late

4

lean

4

leap

6

lent

4

lept

6

nape

6

neap

6

neat

4

pale

6

paly

9

pane

6

pant

6

pate

6

paty

9

peal

6

pean

6

peat

6

pelt

6

pent

6

plan

6

plat

6

play

9

plea

6

tael

4

tale

4

tape

6

teal

4

tela

4

tepa

6

tyne

7

type

9

yean

7

yelp

9

5 letter words with PENALTY

Points

aptly

10

laten

5

leant

5

leapt

7

lepta

7

palet

7

panel

7

panty

10

paten

7

patly

10

peaty

10

penal

7

petal

7

plane

7

plant

7

plate

7

platy

10

pleat

7

plena

7

tepal

7

typal

10

yenta

8

6 letter words with PENALTY

Points

neatly

9

pentyl

11

planet

8

platen

8

plenty

11

7 letter words with PENALTY

Points

aplenty

12

penalty

12

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