The US online casino business is entering a new phase of the market. In Q1 2026, it hit a record $3.1 billion in revenue. That suggests it’s on track to beat the $10.7 billion in revenues across 2025. Despite that, expansion into new states has stalled. So competition is arguably more intense than ever.
And that’s just across the seven regulated state markets – the offshore casino space is even more packed with competitors from across the globe. So what are the dynamics of this crowded market? How is competition changing the player experience? And could things calm down in the future, or ramp up even further?
The Market is Already Huge and Still Growing
2025’s $10.7 billion in revenue was already up 28% on 2024. If it hits $12 billion in 2026, that will be up at least 13%. That shows growth is slowing slightly. This is to be expected, considering no new states have launched markets since Rhode Island in 2023. And that market opened with only one operator (locally-based Bally’s).
By far most of the revenues for online casino operators come from three states: Pennsylvania, Michigan and New Jersey.
In New Jersey, on average, $313 per resident is spent on online casinos each year. Only Michigan even comes close at $285 per resident per year. That really is no surprise, though, seeing as New Jersey has long been America’s second most gambling-friendly state after Nevada. It was also instrumental in challenging the Professional and Amateur Sports Protection Act (PASPA), which led to the rise of legal sports betting markets across the country.
In New Jersey today, there are more than 30 online casinos operating. In Pennsylvania, there are 24. However, in both of these markets, there is little room for expansion. Regulators have a cap on the number of licenses. Meaning competition is even more intense.
For players, this means more competitive bonuses, more pressure on operators to keep their entire customer experience seamless and the potential for ever bigger payouts from things like progressive jackpot bonuses.
Major Players Dominate in a Changing Sector
The market, for all its competitors, is dominated by a few big operators. DraftKings, FanDuel and BetMGM account for the majority of revenues (around 80% to 90% in some months) in markets where all three are available.
However, that doesn’t mean there aren’t competitors snapping at their heels.
For example, Casino Guru ranks online casinos for US players, and this shows how many options there truly are across the country. So much so, that players turn to these platforms for breakdowns of the different features, from licensing info to bonuses or payment systems.
This depth of competition, while facing pressures from regulation in those markets, has certainly had an effect on the product players with whom they engage. For example, a key strategy of the sector for the first few years was to chase growth and customer acquisition at almost all costs. That meant generous introductory bonuses, big VIP incentives and high marketing spend.
The big players, DraftKings and FanDuel, took quite a few years of losses or barely making profits as they chased this model – although they have since turned it around. But that has come as a change in the model.
With no new states legalizing online casinos and none looking likely anytime soon, operators have focused on generating revenue and retention over new customers.
There is also an interesting shift in companies channelling sports bettors to their casino offerings. Sports betting has spread to most of the US now, and alongside (or perhaps because of) booming popularity and revenues, regulators and lawmakers are weighing in with tighter restrictions and sometimes even higher taxes. On a market where operators see big spend coming their way, but they have tight margins.
All of this makes online casino states look better to operators. Casinos aren’t as widespread, but they offer more consistent income and are less of a risk in the current regulatory climate.
Other Casinos are Still Thriving Too
But that – only tells half the story. Literally. While the regulated US market is fragmented, offshore casinos don’t worry about that. While some states try to crack down more than others, the offshore casino scene is just as big – if not potentially bigger – than the regulated markets.
Casinos licensed and regulated by states in the US have to provide detailed revenue information to regulators for tax and compliance standards. Offshore operators do not have to do this.
Therefore, it’s hard to tell exactly how big the market is. But studies suggest it could be massive. One recent report estimated 362 global brands are competing for US audiences – not including those in the seven licensed states.
The licensed giants are catching up – but offshore brands have a massive head start, and FanDuel, for example, can’t offer sports betting in California. Unlike offshore operators.
Estimates are that domestic online gambling brands saw revenues rise by 20% from 2024 to 2025, while the offshore market grew by 3% over that time.
The regulated-state online casinos also face competition from sweepstakes casinos. These casinos use a dual currency model involving free sweepstakes coins, which essentially allows them to offer casino-style slots games (with cash payouts), but they don’t qualify legally as gambling.
Although many states have also cracked down on and even banned this model, it too remains hugely popular and profitable across the country. It was the hyped product of the gambling sector for a year or two, until prediction markets came along – but that’s another story.
In terms of potential new markets for the locally-regulated casinos to move into in the US, none seem likely this year.
Bills have been proposed in Maryland, Massachusetts, Illinois, Virginia and Ohio to establish their regulated online casino markets. Only Ohio’s passed through legislature, but the state Governor Mike DeWine (who recently said he regrets overseeing regulated sports betting) has come out publicly against it. Seeing as he will have to sign a bill, that rather complicates the last-standing attempt to add another US online casino market in 2026.