US Commercial Gaming Revenue Falls 0.6% in August as Sports Betting Drops 15.6%

Commercial gaming revenue in the United States declined by 0.6% year on year in August 2026 to $6.48 billion, as a sharp fall in sports betting revenue outweighed growth in land-based casinos and online gaming, according to the American Gaming Association (AGA).

The figures, published in the AGA’s Commercial Gaming Revenue Tracker on 21 October, show diverging performance across the country’s main regulated gambling sectors. Traditional casino gaming and iGaming both recorded year-on-year growth, while sports betting revenue fell significantly despite only a modest decline in the total amount wagered.

Traditional casino gaming revenue increased by 0.9% to $4.44 billion. Slot machines generated $3.25 billion, representing a 1% increase compared with August 2025, while table games produced $885.91 million, up 2.1%. The AGA attributed part of the growth in table game revenue to the expansion of Resorts World New York City.

Sports betting experienced the largest decline among the three main sectors. Revenue fell by 15.6% to approximately $1 billion, while the total amount wagered, known as betting handle, decreased by just 0.7% to $10.89 billion.

The difference between the relatively stable betting volume and the sharper revenue decline was partly explained by a lower hold rate, which measures the proportion of wagers retained by operators as revenue. The rate fell to 9.2% in August, compared with 10.8% in the same month a year earlier. This meant sportsbooks retained a smaller share of the money wagered.

The AGA identified two factors that may have affected sports betting activity: the growing availability of sports-related contracts through prediction markets and the later start of the college football season. The association also noted that, apart from June and July, when the FIFA World Cup boosted activity, sports betting handle had been lower year on year since December 2025.

Prediction markets have become an increasingly prominent point of debate in the US gambling industry. The AGA argues that platforms offering sports-related event contracts compete with state-regulated sportsbooks without being subject to the same state gaming tax framework. The legal and regulatory treatment of these products remains contested, with the distinction between financial-market contracts and gambling products at the centre of the debate.

Online casino gaming continued to expand in August. iGaming revenue rose by 12.3% year on year to $1.03 billion, exceeding sports betting revenue for the month. However, the AGA said growth in the sector was moderating in the absence of new markets entering operation.

The performance of iGaming illustrates the continued importance of online casino products within the US commercial gaming market. Although growth remained positive, the sector’s expansion was not sufficient to offset the decline in sports betting and prevent an overall contraction in monthly commercial gaming revenue.

The August results also affected tax receipts. Regulated gaming generated $1.46 billion in tax revenue for state programmes, down 1.5% compared with August 2025. State sports betting tax revenue declined by 14%.

The AGA said state tax collections were being affected by activity involving skill-based gaming machines, sweepstakes casinos and prediction market platforms offering sports-related contracts. According to the association, these activities can compete with regulated gambling operators while generating less or no state gaming tax revenue under the relevant arrangements.

The association estimates that prediction market platforms offering sports-related contracts have cost state governments more than $1.56 billion in potential gaming tax revenue since the beginning of 2025. This figure is an industry estimate of potential lost revenue rather than a direct measurement of taxes that would otherwise necessarily have been collected. Its calculation depends on assumptions about how much activity would have taken place through taxable, state-regulated gambling operators instead.

The AGA has warned that reduced gaming tax collections can affect public programmes supported by gambling revenue, including senior pension plans and responsible gambling initiatives. The scale of any effect varies by state and depends on the way gaming taxes are allocated.

Despite the weaker August performance, the broader industry remained in growth territory over the first eight months of 2026. Total US commercial gaming revenue reached $53.84 billion between January and August, an increase of 5.4% compared with the same period in 2025.

Year-to-date sports betting revenue rose by 4% to $10.45 billion, while iGaming revenue increased by 17.4% to $8.11 billion. Traditional casino gaming revenue reached $35.25 billion, up 3.4%. The AGA noted that Oklahoma had not yet reported data for July and August, meaning the figures were not fully complete at the time of publication.

The contrast between August’s monthly decline and the cumulative year-to-date increase suggests that the latest figures should be viewed in the context of wider market performance. While sports betting revenue weakened during the month, both land-based casino gaming and iGaming continued to record growth, and the industry’s overall revenue remained above the level recorded during the first eight months of the previous year.

The results also underline the importance of distinguishing betting volume from operator revenue. In August, the amount wagered on sports betting declined only slightly, while the reduction in the hold rate contributed to a substantially larger fall in revenue. The extent to which prediction markets are affecting regulated sportsbooks remains a separate question from the impact of monthly sporting schedules and betting outcomes.

For regulators and industry participants, the figures place renewed focus on competition between state-regulated gambling operators and emerging prediction market platforms, as well as on the tax implications of different regulatory models. The coming months will help determine whether August’s sports betting decline represents a temporary fluctuation or a more sustained challenge for the regulated market.

By fLEXI tEAM