U.S. Commercial Gaming Revenue Reaches $7B Amid Market Pressures

Traditional Casinos and iGaming Fuel Growth Across the Nation

Traditional brick-and-mortar commercial gaming casinos led the charge in May, expanding by 4.5% year-over-year to reach $4.68 billion. Within this vertical, slot machines remained the primary driver, generating $3.39 billion—a 4.6% increase compared to the same period last year. Table games also saw positive momentum, growing by 3.9% to bring in $933 million.

Concurrently, commercial iGaming remains the fastest-growing segment in the broader U.S. market, generating $1.03 billion in May revenue, which marks a 14.7% increase compared to last year. However, analysts note that the pace of digital gaming growth has slowed significantly over the last few months, a trend largely attributed to the fact that no new legal iGaming states have come online since 2024.

Unregulated Prediction Markets Impact State Sports Betting Revenues

While land-based operations thrived, the state-regulated sports betting sector faced noticeable headwinds. Sports betting revenue fell 1.8% in May to $1.34 billion, while the total betting handle slid slightly by 0.4% to $12.06 billion. This represents the second monthly contraction for the vertical this year, triggered by lower player hold and declining handles. When excluding Missouri’s recently launched market, the nationwide sports betting handle actually dropped by 2.7%, as unregulated sports wagering on prediction platforms continues to surge outside of state legal frameworks.

This shift to alternative commercial platforms is directly impacting public funding. Regulated gaming generated $1.53 billion in tax revenue for vital state programs in May—a marginal increase of just 0.7% from last year. State sports betting tax revenue specifically fell by 2.4%.

The AGA highlights that these figures are being suppressed by the rise of untaxed operators, including skill machine providers, sweepstakes casinos, and prediction markets. For context, the platform Kalshi alone handled nearly $15 billion in sports betting volume during May. Estimates suggest that since the beginning of 2025, prediction market platforms offering sports bets have cost state governments over $1 billion in potential gaming taxes, diverting critical funding away from seniors' pension plans and responsible gaming programs.