By Antonina Tupikova · Founder, iGaming Times3 min read
The American Gaming Association's full-year Commercial Gaming Revenue Tracker confirms the U.S. regulated market has posted its strongest result on record, with iGaming's $10.74 billion haul and a $18.09 billion tax contribution redefining the scale of state-licensed gambling. The AGA used the announcement to sharpen its attack on prediction markets, estimating they have already diverted more than $500 million in potential sports betting tax revenue.
The U.S. commercial gaming industry closed 2025 at $78.72 billion in gross gaming revenue, its highest annual total on record, according to data published on 26 February 2026 by the American Gaming Association (AGA) through its Commercial Gaming Revenue Tracker. The 9.2% year-on-year gain was broad-based: all 38 commercial gaming markets reported revenue growth, and every major segment contributed to the advance. The results reinforce the trajectory the sector has maintained since the legalisation of sports betting accelerated market expansion in the wake of the 2018 Supreme Court ruling.
Traditional gaming, which includes land-based casino operations, remained the largest segment at $50.94 billion, up 2.3% on 2024, and contributed $11.33 billion in taxes, itself a 7.2% increase. The growth rate for traditional gaming is modest relative to the digital verticals, reflecting the maturity of the land-based estate, but the absolute figures confirm its continued role as the foundation of state gaming-tax receipts.
Sports betting delivered $16.96 billion in revenue, a 22.8% gain, on a total handle of $166.94 billion, up 11.0%. State-regulated sportsbooks generated $3.71 billion in gaming taxes, a 32.4% increase year-on-year. iGaming outpaced every other segment on a percentage basis, reaching $10.74 billion, up 27.6%, and delivering $2.59 billion in taxes, a 36.9% uplift. For context, iGaming operates in a small subset of U.S. states, meaning the segment's growth is concentrated and the headroom for expansion into unlicensed jurisdictions remains substantial. Pennsylvania, one of the largest iGaming markets, recently topped $7 billion in total annual gaming revenue for the first time, led by online casino.
Bill Miller, President and CEO of the AGA, described the results as evidence of the broad appeal of regulated markets. "For another year, legal commercial gaming in the United States has delivered exceptional results for consumers, operators, and the communities we serve," Miller said, adding that record revenues and tax contributions demonstrate "why strong state oversight remains essential as our industry evolves."
The AGA did not confine the announcement to financial figures. Alongside the revenue data, the association estimated that prediction markets offering sports event contracts have diverted more than $500 million in potential sports betting tax revenue from state and tribal systems to date. The AGA characterised these platforms as operating outside state and tribal regulatory frameworks, without the consumer-protection and responsible-gaming standards applied to licensed sportsbooks, and without contributing tax revenue to the states where their users reside.
Miller made the connection explicit: "Sports betting belongs under state and tribal regulation. That's how consumers are protected and how communities share in the benefits." The statement arrives as the regulatory status of sports event contracts on prediction-market platforms is being contested across multiple venues, including federal courts and state regulators. New Jersey has advanced a sweeping responsible-gambling overhaul as its own iGaming market continues to set records, and North Carolina has introduced the first-of-its-kind prediction-market levy as states begin legislating directly against the emerging category.
The iGaming Growth Rate Is the Story Within the Story
At 27.6% year-on-year growth, iGaming is expanding at a pace that dwarfs the broader market and even outstrips sports betting. The $10.74 billion figure is the product of a small number of legal jurisdictions performing at high intensity rather than a nationwide footprint, which makes the number more striking: the segment is generating this revenue with only a fraction of the addressable population covered by state law. Rush Street Interactive's record results earlier this year illustrated how a casino-first strategy in live iGaming states can deliver outsized growth in the current environment. The 36.9% increase in iGaming tax revenues is equally significant: it signals that states with online casino legislation are seeing material fiscal returns that states without it are forgoing. That gap will become harder for reluctant legislators to ignore as the cumulative figures compound.
The $500 Million Prediction-Market Estimate Is a Political Number as Much as a Financial One
The AGA's estimate that prediction markets have diverted more than $500 million in potential sports betting tax revenue is not accompanied by a detailed methodology in the public announcement, and it should be read in context. The association is a lobbying body for its members, and the framing of this figure serves a clear strategic purpose: to attach a concrete fiscal cost to a regulatory gap at a moment when Congress and state legislatures are actively debating the status of sports event contracts. That does not make the estimate wrong, but it does mean the number warrants scrutiny before it enters policy discussions as settled fact. The underlying dynamic it points to, that unregulated platforms capture handle that does not generate state tax revenue, is consistent with the channelisation arguments the industry has made in other contexts. The more durable policy question is whether the appropriate response is to fold prediction markets into existing state frameworks, create a parallel federal structure, or attempt to constrain them through enforcement. The $500 million figure is designed to make inaction look expensive.
Record Tax Revenues Are a Political Asset the Industry Will Deploy Carefully
The $18.09 billion in gaming taxes generated in 2025 is a record, and it is a powerful piece of evidence in any legislative debate about the value of regulated markets. A 15.1% increase in tax contributions in a single year is the kind of figure that resonates in state budget discussions, particularly at a time when many states are managing fiscal pressure. The industry's ability to point to education funding, infrastructure investment, and community services funded by gaming revenue gives it a durable argument that is difficult to counter on purely economic grounds. The risk, as the market matures, is that this argument gets complicated by the simultaneous growth of unregulated alternatives: if prediction markets, offshore sportsbooks, and other unlicensed channels continue to expand, the headline tax figure will eventually plateau even as total gambling spend grows. The 2025 numbers are strong. The question for the next phase of the market is whether the regulatory perimeter can hold its shape long enough for those numbers to keep growing.
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