The slowdown that began quietly during the back half of 2025 has started to look more structural for the U.S. online sports betting industry.
After years of relentless expansion fueled by new state launches, promotional spending, and customer acquisition wars between dominant operators like FanDuel and DraftKings, nationwide sports betting handle has declined or remained flat on a year-over-year basis for three consecutive headline months to end 2025 and begin 2026.
The downturn comes as operators simultaneously report improving profitability, rising structural hold, and a changing consumer environment that some executives and analysts believe is reshaping betting behavior.
Nationwide sports betting handle fell from roughly $15.8 billion in December 2024 to approximately $14.9 billion in December 2025, according to data compiled from the American Gaming Association. This was despite the Dec. 1 launch of Missouri’s online sports betting market and it’s nearly $550 million in additional handle.
In the ensuing month, handle slipped from about $15.8 billion in January 2025 to roughly $14.8 billion in January 2026, while February handle rose from approximately $12.6 billion in February 2025 to about $12.7 billion in 2026. The numbers from February and early indicators from March show a flat or slight year-over-year improvement, but still reflect materially slower market momentum than the growth rates the industry posted during the prior two years.
The broader trend becomes more apparent when paired with annual growth figures. Industry year-over-year handle growth exceeded 30% during much of the first half of 2024 before decelerating sharply through late 2025 and into early 2026. By January and February 2026, annual growth had nearly disappeared entirely, according to AGA data.
The decline is particularly notable because it took place during football season and immediately afterward, traditionally the strongest stretch on the U.S. sports betting calendar.
Market leader figures show slowdown
Roughly two-thirds of that nationwide handle still comes from FanDuel and DraftKings, the latter of which narrowly clipped its long-time rival in handle to begin 2026.
Flutter Entertainment, parent company of FanDuel, acknowledged weakening sportsbook engagement in its first-quarter 2026 earnings report. The company said U.S. sportsbook revenue rose 1% year over year and U.S. handle declined 9% during the quarter to $13.36 billion from $14.61 billion a year earlier.
The company specifically described deteriorating customer activity that carried over from late 2025. Flutter said FanDuel exited 2025 “with a smaller customer base than anticipated,” which continued to pressure first-quarter performance as sportsbook average monthly player totals declined 6% year over year.
Executives also disclosed that January handle trends were down 10% year over year before improving modestly by March.
Even with lower handle, however, many major U.S. sportsbooks are becoming more profitable.
Flutter reported U.S. net revenue margin improved 80 basis points year over year to 8.6%. The company attributed part of that to improved sports results and long-term structural margin expansion initiatives. Flutter noted its long-term structural revenue margin targets continue rising toward 16%, reflecting an industry-wide emphasis on higher-margin wagering products.
Marketing pullbacks across the industry have similarly become more visible. During the peak expansion years between 2021 and 2024, sportsbook advertising saturated live sports broadcasts and digital media. Sportsbooks spent years using aggressive promotions, odds boosts, and bonus bets to build market share.
DraftKings, meanwhile, appears to be navigating the same slowing market dynamics while leaning heavily into profitability and customer efficiency rather than pure volume growth.
The company processed $14.083 billion in sportsbook handle during Q1 2026, narrowly surpassing FanDuel on total wagering volume.
Beyond regulation, broader consumer attitudes may also be evolving. After years of explosive growth, sports betting no longer carries the novelty it once did in many mature markets. Economic pressures, higher living costs, and increasing awareness of gambling losses appear to be contributing to softer engagement among some recreational bettors.
More recently, operators have moderated marketing spending as investors demanded earnings growth instead of pure customer acquisition. Flutter itself referenced changes to “generosity effectiveness” and the rollout of revised loyalty systems intended to improve engagement. The company also highlighted cost-saving measures and reduced investment in lower-return products.
As those incentives have declined and operators focus more heavily on profitability, some bettors appear to be wagering less frequently or exhausting bankrolls more quickly. That pressure is particularly meaningful because the U.S. market has become increasingly dependent on high-value users and parlay-heavy betting products.
Single game parlays produce higher margins. That also means they drain players’ bankrolls more rapidly.
Bottom line
For operators and investors, the central question is whether the current slowdown represents a temporary recalibration or the beginning of a more mature phase for U.S. sports betting.
FanDuel and DraftKings remain dominant, and both companies continue generating billions in revenue while expanding into adjacent categories like iGaming and prediction markets. Flutter reported U.S. revenue rose 6% year over year to $1.76 billion during the first quarter, while DraftKings generated $1.65 billion in quarterly revenue.
