The American Gaming Association's State of the States 2026 report tells a story of explosive growth in regulated online casino markets. Commercial gaming revenue hit a record high of $78.61 billion in 2025—the fifth consecutive year of record commercial gaming revenue—while online casino (iGaming) revenue alone surged 27.6% to $10.73 billion across the seven active regulated states.
Quick answer: The AGA's 2025 report documented iGaming revenue of $10.73 billion across regulated US states, up 27.6% year over year and accounting for more than $2 billion in new revenue. Pennsylvania led at $3.46 billion (32.2% of the national total), with NJ and MI combining with PA for nearly 90% of all US iGaming revenue.
The Top-Line Numbers
2025 was a banner year for the regulated US gaming industry across every vertical:
- Total commercial gaming revenue: $78.61 billion (record high, +9.1%)
- Online casino (iGaming) revenue: $10.73 billion (+27.6%)
- Sports betting revenue: $13.71 billion (+25.4%)
- Land-based casino revenue: $49.45 billion (+2.1%)
- States with regulated iGaming: Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, Maine, West Virginia (8 total; 7 with full-year operations)
The iGaming growth rate of 27.6% is the standout figure. While sports betting grew rapidly off a much smaller post-PASPA base, iGaming is showing similar growth in regulated markets but with substantially higher hold and margin. For an overview of the operator landscape, our top online casinos guide covers the major brands.
Pennsylvania: The Dominant iGaming Market
Pennsylvania was the top US iGaming market in 2025, rising nearly 28% year over year to produce $3.46 billion in revenue—32.2% of the nationwide total. Pennsylvania's combination of large population (~13 million), competitive operator landscape (more than 15 licensed iGaming brands), and mature regulatory framework has positioned it as the dominant US iGaming market.
The crossing point: in both Pennsylvania and New Jersey, iGaming revenue exceeded land-based casino revenue for the year, a first in both states. That milestone marks a structural shift in how US consumers gamble and where state tax revenue will be generated going forward.
New Jersey and Michigan: Mature Markets
New Jersey (launched 2013) generated roughly $2.55 billion in 2025 iGaming revenue, while Michigan (launched 2021) produced approximately $2.18 billion. Together with Pennsylvania, the three states accounted for nearly 90% of total US iGaming revenue.
NJ's market is mature and consolidated, with DraftKings, FanDuel, BetMGM, and Caesars controlling the bulk of share. Michigan saw stronger growth from a less-mature starting point, with FanDuel and BetMGM leading the operator pack. Our DraftKings Casino and FanDuel Casino reviews compare the product offerings.
The Smaller iGaming Markets
Connecticut, Delaware, Rhode Island, Maine, and West Virginia round out the regulated iGaming map. Combined, they contributed roughly $1.5 billion in 2025 revenue. Connecticut and West Virginia, in particular, have shown strong growth as more operators have entered.
The future growth in this segment depends on new state legalization—a process that has been slow despite the obvious revenue case. Maryland's Senate Bill 885 received a committee hearing in 2026, but the bill did not advance before the legislative deadline. New York, Massachusetts, and several other large states continue to evaluate iGaming bills.
Why iGaming Growth Continues to Outpace Sports Betting
Sports betting got the headlines after PASPA was struck down in 2018, but iGaming is now the segment with stronger unit economics and longer-term growth runway. Key drivers:
- Higher hold: iGaming hold averages 4–8% across slots, blackjack, and live dealer combined, compared with sports betting hold of 8–11% on handle but with much lower handle per active user.
- Lower acquisition cost: iGaming customer acquisition costs have stabilized in mature markets, while sports betting acquisition remains expensive due to ongoing competitive promotional spending.
- Higher LTV: iGaming players exhibit higher long-term value than sports betting players, partly due to higher session frequency and partly due to lower churn.
For an introduction to the math of casino games and house edge, our casino strategy guide covers the basics.
What This Means for Players
The 27.6% revenue growth is fueled by both more players and higher spend per player. For consumers, that translates into:
- More competitive promotions: Operators are spending heavily to acquire and retain players, which means richer welcome offers and ongoing reload bonuses. Our best casino bonuses page tracks the latest offers.
- Expanded game libraries: Major operators now offer 1,000+ slot titles, multiple live dealer studios, and exclusive games. Live dealer casinos have grown particularly fast.
- Better mobile experiences: Investment in mobile UX has accelerated as operators recognize that 80%+ of iGaming activity happens on mobile devices.
Regulatory Headwinds and Industry Challenges
The American Gaming Association has mobilized to address two growing threats to the regulated iGaming model:
- Prediction markets offering sports betting-like contracts outside established state and tribal gaming law.
- Unregulated online sweepstakes casinos that operate in a legal gray zone but compete directly with regulated iGaming for consumer attention and spend.
The sweepstakes casino debate is particularly contentious. While these platforms argue they operate legally under existing sweepstakes statutes, regulated operators and AGA argue they undercut consumer protections and tax bases. Our sweepstakes casinos page covers the major sweepstakes brands.
Frequently Asked Questions
Which state generates the most online casino revenue in the US?
Pennsylvania is the largest US iGaming market, with $3.46 billion in 2025 revenue—32.2% of the national total. New Jersey and Michigan are second and third, respectively, with the three states accounting for nearly 90% of US iGaming revenue.
How many states have legal online casinos in 2026?
Eight states have legalized real-money online casinos: Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, Maine, and West Virginia. Several additional states are considering iGaming legislation but none has passed in 2026.
Is online casino growing faster than sports betting?
By revenue growth rate, yes—iGaming grew 27.6% in 2025 vs. sports betting's 25.4%. iGaming also has substantially higher hold and lifetime value per player, making it more attractive to operators.
What's the difference between iGaming and sports betting?
iGaming refers to online casino games (slots, table games, live dealer), while sports betting refers to wagering on the outcomes of sporting events. The two are regulated separately in most states, with different tax rates and licensing requirements.
Why aren't more states legalizing online casinos?
State legalization has been slow due to opposition from land-based casino operators (worried about cannibalization), tribal gaming interests (concerned about exclusivity rights), and social conservatives (opposed to gambling expansion). The math case for state revenue is strong, but the political coalition is harder to build than for sports betting.
Final Take
The AGA's 2025 report makes one thing clear: regulated online casino is the highest-growth segment in US gaming and the structural winner of the post-PASPA expansion. With Pennsylvania alone generating $3.46 billion and crossing the threshold where iGaming exceeds land-based casino revenue, the writing is on the wall for the holdout states. Whether you're a casual slot player or a high-volume blackjack regular, explore our best online casinos rankings or check out the latest best casino bonuses to find the right platform.
Join the Conversation
Be respectful. No spam. Strategy discussion welcome.