The U.S. commercial gaming industry set a new record in 2025, generating $78.72 billion in revenue and $18.09 billion in taxes to support public services nationwide, according to a recent report by the American Gaming Association.
The Washington, D.C.-based trade group added that growth spanned all segments, traditional gaming, sports betting, and iGaming, with every commercial market posting annual revenue gains.
Sector continues to flourish across the board, says AGA
The gains were split evenly, with traditional casino play, sports betting and online gaming all benefiting from a bumper year. The figures show each segment posted year-over-year revenue increases.
Traditional casino gaming generated $50.94 billion in revenue, a 2.3% increase from the prior year. The segment contributed $11.33 billion in taxes, up 7.2%, continuing to provide a steady foundation for state and local budgets.
Sports betting recorded some of the strongest growth, with revenue climbing 22.8% to $16.96 billion. Bettors wagered $166.94 billion overall, an 11% rise in total handle, while state-regulated sportsbooks paid $3.71 billion in taxes, which is up 32.4% from a year earlier.
Online casino gaming, or iGaming, also surged, generating $10.74 billion in revenue, a 27.6% increase, despite some regulatory headwinds in some states. The segment produced $2.59 billion in tax revenue, marking a 36.9% jump year over year.
Bill Miller, President and CEO of the AGA, said: “For another year, legal commercial gaming in the United States has delivered exceptional results for consumers, operators, and the communities we serve. These record revenues and tax contributions demonstrate the broad appeal of regulated gaming markets and why strong state oversight remains essential as our industry evolves.”
AGA reiterates need for State and Tribal-Regulated
The scale of betting activity illustrates why many policymakers argue regulation is critical. As wagering volumes climb into the hundreds of billions of dollars, oversight provides standardized rules for licensing, auditing and compliance, helping ensure operators meet financial and ethical requirements.
Regulated markets also create formal consumer safeguards, including age verification, responsible gambling programs and mechanisms for dispute resolution. Law enforcement and regulators are better positioned to monitor suspicious betting patterns, protect the integrity of sporting events and curb illicit activity when betting occurs within a legal framework.
Many believe that bringing sportsbooks under state supervision offers transparency that illegal markets lack. Public reporting requirements and tax structures make the industry accountable to lawmakers and taxpayers, reinforcing the case that regulation can balance economic opportunity with consumer protection as sports wagering continues to expand.
Miller added: “With 2025 marking another record year, the industry’s performance reinforces a clear principle. Sports betting belongs under state and tribal regulation. That’s how consumers are protected and how communities share in the benefits.”
December 2025 report highlights increase in state government funding
According to figures from the U.S. Census Bureau compiled in December 2025, collections from gaming revenue jumped 382%, from $190 million in the third quarter of 2021 to $917 million in the second quarter of 2025.
The explosion in growth follows the U.S. Supreme Court’s 2018 decision striking down the federal ban on sports wagering, clearing the way for states to legalize retail and online betting. Since then, most states have adopted some form of sports wagering.
Large states have driven much of the increase. New York launched online betting in 2022 with a 51% tax rate and regularly collects more than $200 million per quarter, while Ohio and North Carolina posted strong early returns after launching in 2023 and 2024. Illinois also raised its tax rate in 2025, and several other states recently added online markets.
Revenue trends are seasonal, typically peaking in the winter during the NFL playoffs, Super Bowl and March Madness, as well as the NBA and NHL seasons. Collections tend to slow in the summer, when fewer major sporting events are underway.
Prediction markets siphoned $500 million in revenue, AGA estimates
Despite record growth in legal sports wagering, the AGA estimates states may have lost nearly $500 million in potential tax revenue due to sports event contracts offered outside traditional regulatory frameworks. The group argues the products mirror sports betting but operate without the same state oversight or tax obligations.
The association has been particularly critical of prediction market platforms such as Kalshi and Polymarket, which allow users to trade contracts tied to the outcomes of sporting events. Industry officials contend these offerings function as de facto sportsbooks while bypassing state licensing systems.
Both companies have faced legal scrutiny and opposition in multiple jurisdictions, with regulators and gaming stakeholders challenging whether sports-related event contracts fall under federal commodities law or state gambling statutes. Court battles are ongoing as policymakers weigh how such markets should be classified and regulated.
Gaming industry leaders argue the outcome could have broader implications for consumer protections and public revenues. They say state-regulated sportsbooks are subject to tax payments, compliance audits and responsible gambling safeguards, standards they contend should apply uniformly to any platform offering sports-related wagering products.
