US online casino revenue rose 12% year on year in the third quarter of 2026, the slowest growth rate recorded since analysts at Citizens JMP Securities began tracking it. In the first quarter growth was 19%, and in the second it slowed to 16%.
Citizens analysts said the slowdown was in line with their expectations. In September growth picked up slightly, to 12% from 11% in August.
FanDuel remains the market leader, but its share fell to 25.1% from 26.6% a year earlier. DraftKings, by contrast, gained about 130 basis points of share in the third quarter, its first quarterly gain in two years. Fanatics rose from 3.9% to 5.2%.
Growth varied widely by state. Delaware posted 36%, West Virginia 26% and Michigan 17%. Connecticut rose 12%, New Jersey 10% and Pennsylvania 7%.
The growth relied on new operators launching in Michigan and West Virginia, and according to Citizens, that effect has started to fade. In August no new markets were added, according to AGA, which says iGaming growth continues to slow gradually. iGaming brought in $1.03 billion in revenue in August, 12.3% more than a year earlier.
Sports betting told a different story. Handle grew 7%, while gross margin held at 9.6%. But in August sportsbook revenue fell 15.6% to $1 billion, on handle of $10.89 billion (down 0.7%). AGA links the drop to prediction markets and a later start to the college football season.
AGA also estimates what states have lost to prediction markets. By its calculation, since the start of 2025 these platforms have cost states and tribes more than $1.56 billion in potential gaming taxes. Neither prediction markets nor operators of skill machines and sweepstakes casinos pay such taxes.
