The U.S. gaming industry continued to grow in February, but a divide is emerging as iGaming surges, retail casinos offer hope of stabilization, and sports betting begins to show signs of strain.
Key Takeaways
- Commercial gaming revenues increased in February, up 4.6% over the same month last year.
- Both retail and online casino gaming revenues grew as sports betting revenues fell.
- As prediction markets gain traction with sports bettors, state-sanctioned sports betting revenues could languish.
The American Gaming Association (AGA) released its latest Commercial Gaming Revenue Tracker on Thursday. Commercial gaming revenue was up 4.6% year over year in February.
Traditional casino revenues rose 3.9%, aided by a solid 5% growth in table game revenues. It was the first time since October that table game revenues grew, providing hope that retail casinos are starting to rebound from a lackluster 2025.
Meanwhile, iGaming revenues jumped a stunning 25%. Online casinos generated $976.3 million, nearly 25% of the $4 billion generated by traditional casinos.
Total casino revenues were sufficient to offset the drop in sports betting revenues, which came in at $1.17 billion, 6.4% lower than February 2025.
The sports betting revenue decline can be partially explained by a lower hold percentage, coming in at 9.24, down 73 basis points. But the sports betting trend, overall, looks troublesome, with handle down for a fourth consecutive month.
Sportsbooks have gone out of their way to say the emergence of prediction markets hasn’t impacted their business goals. Prediction market sites started offering sporting event contracts, similar to sportsbooks, including trades on props and parlays. Unlike licensed sportsbooks, however, prediction markets are not licensed nor taxed by state regulators.
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Predicting a prediction problem?
The AGA pointed out on X that prediction markets have cost states roughly $800 million in tax revenues, impacting pension plans, responsible gaming programs, and more.
U.S. commercial gaming revenue grew 4.6% in February, even as sports betting declined.
— American Gaming Association (@AmericanGaming) April 16, 2026
Meanwhile, prediction market platforms offering sports betting under the guise of contracts have cost states nearly $800M in potential taxes since the start of 2025, funding that supports… pic.twitter.com/PoSJpj4Amv
March may answer whether this was a one-off or a trend. Prediction markets ramped up their ad presence for the NCAA Tournament. March Madness is one of the most important sports betting events of the year; if prediction markets are truly encroaching on state licensed sportsbooks, it could be evident in the AGA’s next report.
