US iGaming Growth Slows To 12% In Q3 As Sports Betting Remains Resilient

The US online gambling market recorded its slowest quarterly growth of 2026 during the third quarter, with iGaming revenue increasing 12% year-on-year as the industry's expansion continued to moderate.

According to research from Citizens Equity Research, online casino revenue growth has declined steadily throughout the year, falling from 19% in the first quarter to 16% in Q2 before reaching 12% between July and September.

Despite the slowdown, the sector continues to generate double-digit revenue growth, with established operators maintaining their leading positions and emerging competitors gradually increasing their market share.

Meanwhile, US sports betting demonstrated greater resilience, with wagering activity continuing to grow despite concerns that prediction market platforms could divert customers away from traditional sportsbooks.

FanDuel Maintains iGaming Lead Despite Market Share Decline

Citizens' analysis showed that FanDuel remained the largest US iGaming operator during Q3, although its market share declined from 26.6% a year earlier to 25.1%.

DraftKings also experienced a year-on-year reduction, with its share falling from 24.3% to 22.2%. However, the operator improved on its second-quarter position of 20.9%, suggesting some recovery following changes to its business model earlier in the year.

BetMGM recorded its sixth consecutive quarterly decline in market share, slipping from 20.7% to 18.6%, although it remained among the three largest online casino operators.

Fanatics delivered the strongest improvement among the operators examined, increasing its share from 3.9% to 5.2% year-on-year. The figure was slightly below its second-quarter position of 5.4%, but demonstrated continued progress in the competitive US market.

The report also suggested that the initial competitive impact of bet365 and Hard Rock entering additional markets in West Virginia and Michigan was beginning to diminish.

Although market shares shifted between operators, the overall rankings of the leading iGaming companies remained unchanged.

Sports Betting Handle Grows Despite Prediction Market Competition

Sports betting delivered more encouraging results, with same-store wagering handle increasing 7% year-on-year during the third quarter.

September recorded 1% growth, making it one of the strongest months of 2026 outside June and July, when betting activity benefited from the FIFA World Cup.

The quarterly increase was particularly notable given that the reporting period contained one fewer week of NFL action than the corresponding quarter in 2025.

DraftKings maintained its position as the largest operator by sports betting handle, increasing its market share from 37.3% to 37.6%.

FanDuel also strengthened its share of wagers, rising from 31.4% to 32.8%, although its share of gross gaming revenue declined from 37.7% to 35.4%.

Fanatics experienced the opposite trend, with its handle share falling from 11.2% to 9.9%, while its gross gaming revenue share increased from 7.3% to 8.8%.

The figures suggest that operators continue to experience differing levels of profitability and betting activity, even as the wider market maintains its growth.

Sportsbook Margins Show Mixed Performance

Citizens' research also highlighted differences in sportsbook margins among the industry's established operators.

BetMGM improved its margin from 9.6% to 10.2%, while Caesars recorded a decline from 7.6% to 6.9%.

Bet365 maintained a margin of 9.4%, reflecting a comparatively stable performance during the period.

These differences illustrate how wagering volumes and gross gaming revenue do not necessarily move in the same direction, with sporting results, customer behaviour and operator pricing influencing overall returns.

Prediction Markets Yet To Disrupt Traditional Sportsbooks

The continued growth in sports betting activity comes amid increasing debate over the potential impact of prediction markets on the regulated US gambling industry.

Platforms offering contracts linked to sporting outcomes have attracted growing attention, raising concerns that they could compete directly with established sportsbooks.

However, Citizens analyst Jordan Bender has previously argued that prediction markets do not currently represent a significant threat to traditional sports betting operators.

His assessment suggests that increased marketing by prediction market platforms could introduce additional consumers to sports-related wagering rather than simply transferring existing sportsbook customers to alternative products.

The latest handle figures provide some support for that position, although they do not establish whether prediction markets are affecting individual operators or customer behaviour.

Looking ahead, Citizens expects US sports betting handle to increase during the fourth quarter as the NFL season progresses.

For the wider industry, the figures present a contrasting picture: online casino revenue continues to expand at a slower pace, while sports betting has maintained momentum despite the emergence of new forms of competition.