Gambling vs online casinos: which generates more US revenue?

Until very recently, the question of which gambling vertical generates the most revenue in the US would have been considered pretty academic. You could be forgiven for assuming that the sheer economies of scale within the online gambling markets ensure that sports betting would outstrip online casinos without a fight. After all, gambling is far more widely available and online casinos for real money are restricted to a handful of states. 

Looking at the American Gaming Association's figures, the evidence is fairly cut-and-dried. They reported strong growth across all verticals, with US commercial gaming revenue growing at 9.8%. Between Jan and Apr 2025, total GGR was $26.94 billion, of which traditional venues accounted for $16.75 billion and sports betting $5.75 billion. The balance of $4.04 billion is derived from iGaming. 

The Official Figures Only Tell Part of the Story

However, if you take a wider, less specific view, there are some interesting developments in the iGaming sector that are not immediately obvious from those headline figures. Regulatory friction and other complications are fueling the growth of sweepstakes casinos across the US. As they are not officially gambling, the turnover and revenue are not included in official figures. 

Sports betting might have surged, but despite being confined to just seven states, iGaming generated $8.4 billion last year,and AGA reported that this was the vertical with almost 20% growth. Obviously, the FIFA World Cup has boosted sports betting, but it seems that Americans love their casino games.

Sweepstakes Casinos Reshape the Market

While states like Pennsylvania and New Jersey have fullyregulated commercial markets and earn healthy revenue shares from the gambling industry, moral resistance and physical casino interests have seen the real-money online casino sector falter in its spread (if not in revenue or growth). However, the online game developers and platforms came up with a legal alternative. While legislators and lobby groups argue for and against the legalization of the real-money sector, virtual-money versions are cleaning up.

According to a report by Eilers and Krejcik, sweepstakes is America's fast-growing gambling sector, which generated $11 billion in 2025, making it bigger than the real-money vertical both in terms of revenue and reach. GGR was $3.1 billion in 2022, so it is a stratospheric rise. Things could slow down this year, as several states, including California and New York, have outlawed these online casinos, and they are no longer flying under the radar. Cease-and-desist orders have been issued, investigations launched, and restrictions imposed, but for now, the sector seems pretty unstoppable.

It is not only legislators who are taking these gambling sitesseriously either. The online casino review sites like Casino Guru recognize that they need the same scrutiny as any other wagering platform. They take the position that all gambling sites must be inspected and awarded a Safety Index rating. Their unique approach considers a range of factors, including casino size, player complaints, deductions for unfair or restrictive practices, and additions for positive qualities. They include both sweepstakes and real-money sites for players in regulated and non-regulated states to reflect on-the-ground reality.

Anyone wanting to engage in the betting sector is essentially looking for the same attributes. Players want to be treated fairly and to be able to play safely. While platform operators and legislators dance on the head of a pin over whether these sites are gambling (and therefore included in overall revenue figures), players are looking for ease of use, an extensive game selection, and the best player experience. 

The Regulatory and Tax Challenge

Many people claim that sweepstakes sites have an unfair advantage. The operator behind Chumba Casino is reportedly pulling in billions in annual revenue and converting it into massive net profits because they do not have to pay the same levies and license fees as their real-money counterparts. This means that not only can these sweepstakes casinos operate nationwide (except where they have been specifically outlawed), but they can do so without getting caught up in much red tape. 

In 2024, the states collected almost $16 billion in gaming tax revenue – for some states, it has become an essential economic strand. The system is built on licensed operators that have to follow strict rules. Ironically, unregulated offshore gambling sites are larger than the third-largest GDP in the world (lagging only the USA and China). Sweepstakes,by comparison, are a minor irritation, but for licensed operators there is undeniable frustration. Untaxed gambling revenue is lost revenue and a challenge to the licensed market. 

So, as with all things, the picture is fairly complicated, and the figures do not always reflect what is happening on the ground (or in the cloud). There are many possible outcomes (and some that may yet come to light). More states might look to impose bans, but that may just drive even more players into the arms of offshore operators. Others might look to license existing and emerging platforms, establish new tax frameworks, establish new regulatory classifications, or take a more pragmatic approach and allow online real-money gambling (this is probably the least likely option). However, rising compliance costs will inevitably see smaller operators retreat from the market. Alternatively (and probably the most likely outcome), many states might decide to do nothing. 

Prediction Markets Present the Next Challenge

Regulators and gambling operators possibly have a greater challenge on their hands. Sweepstakes casinos are a mere cheeky-chappy compared to big new kids on the block – prediction markets. These federally operated trading platforms that allow people to take a position on the outcome of a future event (but are apparently not gambling) may pose a greater threat to licensed operators. Unlike the sweepstakes casinos that operate in a legally gray area, the likes of Polymarkethave gone out of their way to be 'legitimate'. They do not operate in the iGaming space and are much more of a threat to traditional gambling platforms – particularly as they do have a definite legal status (or certainly for now they do). The traditional industry behemoths like DraftKings and FanDuel are not taking things lying down and have launched their own prediction apps for states where they cannot offer licensed sports bets.

So, the opening assumption that gambling is bigger than iGaming probably holds up, but the picture is far more complicated than the AGA might have us believe. When you add in crypto casinos and gambling platforms, sweepstakesand social casinos and prediction markets, the market is much more dynamic than the figures suggest.