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US Commercial Gaming Hits Record $78.6bn as iGaming Outpaces Land-Based in Pennsylvania and New Jersey

Sixth straight record year — sports betting +22.6% to $16.89bn, iGaming +27.6% to $10.73bn — but AGA flags $53.9bn illegal gambling market and $500m+ in tax revenue diverted to prediction markets.

Category: iGaming News - USA · By Growl Games Editorial Team · Fri May 15 2026 · Updated Thu Jul 23 2026

US Commercial Gaming Hits Record $78.6bn as iGaming Outpaces Land-Based in Pennsylvania and New Jersey

Table of Contents

Summary

The American Gaming Association (AGA) released its annual State of the States 2026 report this past week, capturing 2025 as the sixth consecutive record year for U.S. commercial gaming. Total commercial gross gaming revenue reached $78.62 billion, up 9.1% year-on-year, with $17.9 billion in direct gaming tax revenue contributed to state and local governments. Including tribal gaming, total legal U.S. gaming revenue reached approximately $125 billion. The single most consequential structural shift recorded in the data: iGaming surpassed commercial land-based casino revenue in both Pennsylvania and New Jersey for the first time. The AGA used the moment to escalate its policy stance against unregulated prediction markets and offshore platforms, which it estimates have already diverted $500 million in tax revenue from regulated sports betting and represent part of a $53.9 billion illegal-gaming market.

The Topline

Of the 38 U.S. jurisdictions with commercial casino or sports betting operations, all reported revenue increases except Mississippi, which posted a flat result (less than 0.1% decline). Thirty-four states plus the District of Columbia set individual annual records. The largest percentage gains came in Nebraska (+79.8%) and Washington, D.C. (+75.9%); Nevada remained the largest state market at nearly $15.8 billion in commercial gaming revenue (+1.2%). The Las Vegas Strip generated $8.64 billion and remains the country's largest single market, with roughly triple the revenue of its nearest competitor, Atlantic City. Resorts World New York City held the title of top individual commercial property outside Nevada and Mississippi (which do not report property-by-property numbers); the property is positioned to extend its lead in 2026 after receiving authorisation in December 2025 to add table games and a sportsbook. The U.S. commercial gaming industry directly supports an estimated 1.8 million jobs.

iGaming: The Acceleration

iGaming was the fastest-growing vertical in 2025. Total iGaming revenue across the seven states with legalised online casinos reached $10.73 billion, up 27.6% year-on-year and exceeding the $10 billion threshold for the first time. Pennsylvania remained the largest single market at $3.46 billion (+27.7%), followed by Michigan and New Jersey; the three states combined account for approximately 90% of the U.S. iGaming total. Delaware, Rhode Island, and West Virginia recorded the strongest percentage growth. The most consequential single data point: iGaming revenue surpassed commercial land-based casino revenue in both Pennsylvania and New Jersey for the first time in 2025. Maine became the eighth state to pass iGaming legislation in 2025, with legislation taking effect in early 2026 and a launch expected in late 2026. iGaming surpassed $1 billion in monthly revenue nationally for the first time in December 2025.

Sports Betting

U.S. commercial sports betting revenue reached $16.89 billion in 2025, up 22.6% year-on-year on a total handle of $166.94 billion (handle +11.0%). State-regulated sportsbooks generated $3.71 billion in state and local tax revenue, a 32.4% year-on-year increase. New York led all states in sports betting revenue, generating more than $2.5 billion. New York, Illinois, New Jersey, Ohio, and Pennsylvania remained the top five sports-betting state markets. Sportsbook net revenue margin continued to expand across operators in 2025, a margin-led growth pattern that has also been visible in DraftKings' Q1 2026 print (margin of 7.8% on near-flat handle) and Flutter Entertainment's FY2025 disclosures. Wisconsin became the 33rd state with legal online sports betting after Governor Tony Evers signed legislation on April 9, 2026, granting federally recognised tribes exclusive rights to operate mobile sportsbooks.

Land-Based and State Performance

Traditional commercial casino gaming, across 493 properties, produced $51.06 billion in revenue, up 2.3% year-on-year. Slot machines generated $37.13 billion (+2.9%) and table games $10.05 billion (-0.9%). Total traditional-casino tax revenue was $11.33 billion (+7.2%). The Las Vegas Strip's $8.64 billion was effectively flat. The Chicagoland and St. Louis casino markets posted strong growth in 2025 following new property openings in Illinois; Baltimore-Washington D.C., Philadelphia, Detroit, and Boston markets all saw declines in land-based commercial casino revenue. The structural read-across from the iGaming surpassing land-based pattern in Pennsylvania and New Jersey is now the central commercial-gaming policy question facing other states considering online casino legislation, with five states (California, Connecticut, Montana, New Jersey, and New York) having banned sweepstakes casinos and other states considering similar measures.

Illegal Gambling and Prediction Markets

The AGA used the report to escalate its policy stance against unregulated competition. The association estimates the U.S. illegal-gambling ecosystem at $53.9 billion in annual revenue across unregulated gaming devices, offshore sportsbooks, and illegal online casinos, depriving states of more than $15 billion in tax revenue annually. State and tribal governments in 16 states took action against prediction-market platforms offering sports event contracts in 2025, including cease-and-desist orders, civil litigation, and formal regulatory opinions declaring sports event contracts to be a form of unauthorised sports wagering. The AGA estimates that prediction-market platforms have already diverted more than $500 million in potential sports-betting tax revenue. AGA President and CEO Bill Miller's framing in the report: "Sports betting belongs under state and tribal regulation." The escalation is consistent with the bipartisan 41-state-attorney-general comment letter filed with the Commodity Futures Trading Commission on April 30, the Wisconsin federal court's May 11 ruling finding the Ho-Chunk Nation likely to succeed on its Indian Gaming Regulatory Act claim against Kalshi, and the Minnesota legislation advanced this past week that would ban certain event contracts offered on prediction-market platforms.

What It Means

For regulated U.S. operators, the report is the strongest comprehensive data point of the cycle: every vertical at record revenue, every major market growing, sports-betting tax contributions up 32% year-on-year, and a national-level case for iGaming legalisation now visible in the PA and NJ inflection point. For state-licensed operators considering iGaming expansion strategies, the PA-NJ data resets the case for online casino legalisation in markets such as Maryland, Illinois, and New York. For Maine, the first new iGaming entrant, the AGA data sets a credible baseline for expected scale. For prediction-market and sweepstakes operators, the report is the most coordinated policy stance to date from the established U.S. gaming industry: sports event contracts are illegal sports wagering, sweepstakes are unregulated gambling, and offshore platforms are competing infrastructure to be enforced against. For offshore real-money operators serving U.S. users, the AGA's $53.9 billion illegal-market estimate is the operative size signal — and the same signal the AGA is using to drive 2026 state-level enforcement priorities. The competitive frame is unambiguous: regulated U.S. gaming is at record scale and is positioning itself to consolidate further by closing the unregulated perimeter.

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