iGaming’s Growth Is Outpacing Sports Betting in 2026
Online casino gaming has become the most reliable growth engine inside the American gambling industry, even as the sports betting business that made household names of DraftKings and Flutter Entertainment shows real signs of strain. The two segments used to move together. In 2026, they have started pulling in different directions, and the gap between them is wide enough to change how investors should be reading this sector.
The numbers back this up in specific, dated terms rather than a vague sense that online casino games are popular. Industry-wide revenue data through May, first-quarter results from the two largest publicly traded operators, and a widening argument over unregulated prediction markets all point to the same conclusion: iGaming is the part of this industry delivering, while sports betting absorbs new competitive pressure that iGaming has mostly avoided.
iGaming Revenue Keeps Setting New Records
Nationwide iGaming revenue hit $1.03 billion in May 2026, up 14.7% year over year, the American Gaming Association’s Commercial Gaming Revenue Tracker shows. That single month builds on a first quarter that already saw iGaming revenue climb 27.3% to $2.52 billion, and on a full 2025 that closed with iGaming revenue up 27.6% to $10.74 billion, generating $2.59 billion in state gaming taxes. Pennsylvania and New Jersey each saw iGaming revenue overtake their land-based casino revenue for the first time in 2025, a milestone that would have sounded far-fetched five years ago.
The AGA’s own tracker flags one real caveat worth taking seriously: growth, while still strong, has slowed compared with the pace seen earlier in the year. That is a normal pattern for a maturing segment rather than a warning sign on its own, especially with no new states having legalized iGaming since 2024.
The bigger risk sitting next to those numbers is what the AGA itself keeps flagging: unregulated prediction markets and sweepstakes-style products siphoning off activity that never shows up as taxed, reported iGaming revenue at all.
Bigger Numbers Raise the Stakes on Trust
None of this growth means much if the money moving through it cannot be trusted to land where it is supposed to. A market generating tens of billions of dollars a year is a market where operator behavior, licensing, and complaint histories carry real financial weight, not just consumer interest. Industry bellwethers like casinomeister.com have spent decades tracking that side of the industry, cataloguing which operators pay promptly and which ones generate complaints, and that kind of scrutiny becomes more relevant, not less, as the dollar figures involved keep climbing.
It is easy to treat player-side watchdog work as a separate story from the earnings numbers above, but the two are connected. A sector cannot sustain double-digit growth on the back of operators players stop trusting. The regulatory tax base the AGA reports on depends on players staying inside licensed platforms rather than drifting toward unregulated alternatives, and that only happens if the licensed side keeps earning the confidence it has built up over the years.
DraftKings and Flutter Tell Different Stories
DraftKings reported first-quarter 2026 revenue of roughly $1.6 billion, up close to 17% year over year, with adjusted EBITDA jumping 64% to about $168 million and a second straight quarter of positive net income. Flutter, the parent company of FanDuel, posted first-quarter revenue of $4.3 billion, but its US adjusted EBITDA fell 26 % year over year to $119 million, a drop the company tied directly to roughly $300 million in planned 2026 spending on its FanDuel Predicts prediction-markets push.
By market share, Flutter holds close to 29% of US iGaming revenue against DraftKings’ roughly 24%, with both companies still expanding that slice of their business faster than sportsbook revenue, which grew only modestly over the same stretch.
Both stocks have fallen sharply from their highs this year, and headlines about a federal indictment tied to prediction-market insider trading have not helped sentiment. Reporters combing through market pages this earnings season keep landing on the same split: the iGaming segment reads calmer and steadier in both companies’ filings than whatever headline swing is moving the stock price that week. That gap between a noisy stock chart and a quiet, growing revenue line is exactly the detail that gets lost when a single quarter’s EPS miss dominates the headlines.
The Takeaway for This Sector Right Now
Three things stand out clearly enough to act as real conclusions rather than guesses. First, iGaming is the most dependable growth line in American gambling right now, expanding by double digits at both the state-data level and inside individual company earnings, even as growth cools slightly from its early-2026 pace.
Second, sports betting and the new prediction-markets category are where the real uncertainty lives, not in online casino gaming itself, which explains why DraftKings and Flutter keep pouring fresh investment into that fight rather than into iGaming. Third, none of this growth happens without consumer trust holding up behind it, which is why operator track records matter as much as the topline revenue figures do.
Investors and operators chasing the next headline in prediction markets should keep one eye on the quieter number sitting underneath all of it. iGaming has grown every single quarter through this entire stretch of turbulence, and that consistency is becoming the real story this industry has to tell.