The US online gambling market saw its slowest quarterly expansion of 2026 so far, with iGaming revenue rising 12% year-on-year in the third quarter, according to Citizens Equity Research. This marks a continued moderation in growth, as the sector’s year-on-year gains have declined from 19% in Q1 and 16% in Q2. Despite the slowdown, established operators remain dominant, and new competitors are gradually gaining ground.
iGaming Market Share Dynamics
FanDuel retained its lead in the US iGaming sector during Q3, though its market share slipped from 26.6% to 25.1% compared to the previous year. DraftKings also saw a year-on-year decline but showed improvement over Q2, suggesting a rebound following strategic adjustments. BetMGM continued its downward trend, marking a sixth consecutive quarterly decline in market share, though it remains among the top three. Fanatics achieved the most notable year-on-year gain, increasing its share from 3.9% to 5.2%. The competitive influence of recent market entrants such as bet365 and Hard Rock appeared to be waning, and the overall hierarchy among leading operators stayed consistent.
Sports Betting Remains Resilient
Sports betting in the US displayed greater resilience than iGaming, with a 7% year-on-year increase in same-store wagering handle in Q3. September was a particularly strong month, despite having one fewer week of NFL games than the prior-year quarter. DraftKings strengthened its position as the top operator by handle, while FanDuel also gained share. Fanatics, however, saw a decline in handle share but an increase in gross gaming revenue share, highlighting differing profitability trends among operators.
Mixed Results for Sportsbook Margins
Operator margins varied during the quarter. BetMGM improved its margin, while Caesars' margin declined. Bet365 maintained stable performance. These results underscore that gross gaming revenue and wagering volume can move independently, shaped by customer activity, sporting outcomes, and operator pricing strategies.
Prediction Markets and the Competitive Landscape
The report noted ongoing debate about whether prediction market platforms could disrupt traditional sportsbooks. However, current data suggests these platforms have not yet had a significant impact on established operators. Some analysts believe prediction markets may be introducing new consumers to sports betting, rather than simply shifting existing customers.
Why This Matters for Industry Stakeholders
The moderation in iGaming growth and the continued strength in sports betting highlight a shifting landscape for operators, affiliates, and suppliers. Operators face increased competition and changing market dynamics, requiring adaptation in product offerings and marketing strategies. Affiliates may need to pivot focus between sectors as growth rates diverge. For suppliers, the evolving market shares and operator strategies could influence demand for new technologies and content. Regulators may also monitor these trends to assess market health and the impact of emerging competition, such as prediction markets.
Key takeaways
- US iGaming revenue growth slowed to 12% year-on-year in Q3 2026, continuing a downward trend.
- FanDuel, DraftKings, and BetMGM remain the top iGaming operators, though all saw shifts in market share.
- Sports betting handle grew 7% year-on-year, with DraftKings and FanDuel strengthening their positions.
- Prediction markets have not yet significantly disrupted traditional sportsbooks, according to current analysis.
Update (02.11.2026)
In September 2026, sportsbook handle across 15 major US states reached approximately $11.11 billion, representing a slight 0.3% year-over-year decrease. Seven states reported increases in handle, seven saw declines, and Iowa remained flat. Notably, Kalshi generated $60.28 billion in notional volume for the month, up 56.4% from August, while total trading across four major prediction-market exchanges hit $75.5 billion. For Q3 2026, these exchanges—Kalshi, Polymarket, Polymarket US, and Novig—collectively saw $179.6 billion in notional trading volume, marking an 84.3% quarter-over-quarter surge. New York's September gross gaming revenue dropped 17.7% year over year to $159.4 million despite a 5% handle increase, while New Jersey's sports wagering revenue fell 14.3% to $77 million with a 3.6% handle decline. Ohio and Pennsylvania bucked the trend, with Ohio's sportsbook revenue rising 12.8% to $87.7 million and Pennsylvania's taxable sports wagering revenue up 50.5% to $44.7 million, even as both states experienced declines in handle. Hold percentages also fell in key states, with New York's dropping from 8.47% to 6.64% and Maryland's from 11.2% to 9.0%. During the first full NFL weekend on September 12-13, Kalshi set a new record with $4.89 billion in two-day trading volume.