US iGaming Growth Hits Record Low of 12 Percent
Market expansion decelerates as major operators face shifting competitive dynamics and revenue pressures.
1Record Low Growth Rates
The United States online casino sector recorded a 12% growth rate in the third quarter of 2026. This figure represents the slowest pace tracked by analysts, marking a decline from the 16% growth observed in the second quarter. Despite the deceleration, September showed a slight recovery, reaching 12% after an 11% August.
2FanDuel Maintains Market Leadership
FanDuel remains the top iGaming operator, holding 25.1% of the market share. However, this is a decrease from the 26.6% share held a year earlier. While no major operators changed their overall rankings, most incumbents experienced a reduction in their total market presence compared to the previous year's performance metrics.
3DraftKings Business Model Pivot
DraftKings saw its market share fall to 22.2% from 24.3% annually, yet it achieved a quarterly gain. This represents the operator's first quarter-on-quarter increase in two years. Analysts attribute this rebound to specific adjustments made to the company's business model during the spring, which helped stabilize its competitive position against rivals.
4BetMGM and Caesars Decline
BetMGM experienced a significant downturn, with its market share slipping to 18.6% from 20.7%. This result marks six consecutive quarters of decline for the operator. Similarly, Caesars saw its share drop to 6.4% from 7.1%. These figures highlight the ongoing struggle for established brands to maintain their footing in the market.
5Fanatics and Emerging Growth
Fanatics emerged as a clear exception, increasing its market share to 5.2% from 3.9%. This represents the largest improvement among all operators, despite being slightly below its second-quarter peak of 5.4%. Meanwhile, Rush Street Interactive rose to 7.4%, and bet365 reached 1.7% following its expansion into Michigan and West Virginia.
6Sportsbook Handle Remains Steady
The sportsbook sector demonstrated resilience, with handle growing 7% during the quarter despite having one fewer week of NFL games. Gross gaming margin remained flat year-on-year at 9.6%. September same-store handle rose 1%, marking the best monthly performance of 2026 outside of the World Cup months of June and July.
7Prediction Markets and Competition
Analyst Jordan Bender suggests that prediction markets do not pose a major threat to licensed sportsbooks. Heavy advertising from these platforms may actually attract new customers to sports wagering rather than cannibalizing existing ones. This debate remains active as state regulators continue to scrutinize sports event contracts and overall market volume.
8Future Outlook and Context
While iGaming growth has slowed, legal online casino markets continue to generate significant absolute totals. In New Jersey, online casino earnings surpassed those of Atlantic City's physical floors in September. Analysts expect sportsbook handle to rise in the fourth quarter, driven primarily by the ongoing momentum of the current NFL season.
Original article: ReadWrite — US iGaming Growth Hits Record Low of 12 Percent