The State of iGaming in the USA and the Road to 2026

The transformation of the US online gambling landscape over the last six years has been nothing short of revolutionary. Since the repeal of PASPA in 2018, the US has shifted from a nearly untapped frontier into one of the most dynamic—and complex—iGaming markets globally.

As we head toward the mid-2020s, the industry has matured rapidly. The initial "gold rush" for market share is evolving into a battle for profitability, product differentiation, and regulatory expansion.

Here is a look at the current state of iGaming in the USA, the emerging trends like prediction markets, and what the landscape might look like by 2026.

The Shift in Sentiment: From Vice to Revenue Stream

For decades, gambling outside of Nevada, Atlantic City, or tribal lands was largely viewed through a lens of morality. Today, it is viewed through a lens of economics. States facing budget shortfalls know that they can significantly boost their incomes by legalizing and taxing iGaming.

The rapid normalization of online sports betting (OSB) has played a massive role in shifting public opinion. As Americans became accustomed to seeing odds integrated into sports broadcasts and placing legal wagers on their phones, the stigma surrounding online gaming began to erode.

Recent polling data reflects this shift. National polls increasingly show a majority of Americans favor legalization, particularly when framed around consumer protection and generating tax revenue. According to a 2023 poll by The Harris Poll, support for legal sports betting rose to 63% — up from 54% the previous year. However, public attitudes toward legal betting are mixed. A recent poll from the Pew Research Center found that 43% of U.S. adults now believe the legalization of sports betting is “a bad thing for society,” up from 34% in 2022.

Faced with post-pandemic budget deficits, state legislators are finding it harder to ignore the massive tax windfalls being reported by mature markets like New Jersey and Pennsylvania. The argument has shifted from "Should we allow this?" to "Why are we letting offshore operators keep this revenue?"

The Great Divide: Sports Betting vs. iCasino

To understand the US market, you must recognize the sharp dichotomy between Online Sports Betting (OSB) and iGaming (online casinos/slots/poker).

The OSB Boom

Online sports betting is the undisputed success story of US expansion. It is currently legal and live in over 38 states (plus D.C.), covering a vast majority of the US population. It has become a mainstream consumer activity, heavily advertised and integrated into American sports culture.

The iCasino Lag

Online casino gaming has been much slower to gain legislative traction, largely due to fears of cannibalizing existing land-based commercial and tribal casinos.

Currently, only seven states have fully legal, regulated online casino markets:

• New Jersey
• Pennsylvania
• Michigan
• West Virginia
• Connecticut
• Delaware
• Rhode Island

The crucial takeaway: While OSB has the geographical reach, iCasino is the margin king. Despite being in far fewer states, iGaming revenue frequently rivals or exceeds OSB revenue in states where both exist, offering operators vastly better profit margins and player lifetime value (LTV).

The Horizon: Who’s Next to Legalize?

The legislative inertia for iGaming is frustrating for operators, but the dam is showing cracks. The success of the "Big Three" (NJ, PA, MI) proves that digital and physical casinos can coexist profitably.

Looking ahead to 2025 and 2026, several states are in the spotlight for potential iCasino legalization:

• New York: The biggest prize on the board. New York already has massive OSB volume but is missing out on deeper iCasino tax revenue. Budgetary pressures make this a perennial conversation in Albany.
• Maryland: There is significant legislative push and strong Operator support to add iGaming to their existing sports betting framework.
• Illinois: Another state with a massive budget deficit and a mature sports betting market that is primed for iCasino expansion.

The New Frontier: Prediction Markets

While traditional sports and casino games dominate the headlines, a new, adjacent vertical is exploding in popularity and regulatory controversy: Prediction Markets. These platforms allow users to bet on the outcome of events — politics, economics, world events, and sometimes sports — akin to trading securities. 

How They Work

Unlike sports betting, which relies on athletic outcomes, prediction markets (often called "event contracts") allow users to trade shares in the outcome of future events. These can range from economic indicators (e.g., "Will the Fed cut rates in December?") to pop culture and, most famously, politics.

Users buy "shares" at a price between $0.01 and $0.99, representing the probability of the event happening. If the event occurs, the shares pay out; if not, they expire worthless. 

The Legal Gray Area

Are these investments, or are they gambling? The regulatory landscape is murky and currently being fought in federal courts.

• CFTC Regulated: Platforms like Kalshi have recently won significant court battles against the Commodity Futures Trading Commission (CFTC), allowing them to offer event contracts to US citizens as regulated financial products.
• The Offshore Giant: Polymarket, a crypto-based platform, is the global leader in volume but technically blocks US users (though usage via VPNs is an open secret).
• The Academic Loophole: PredictIt operates under older, stricter academic research guidelines.

Prediction markets represent a massive untapped opportunity that blurs the line between financial trading and iGaming. By 2026, we expect clearer federal guidance, potentially opening the floodgates for major US sportsbook operators to integrate these markets.

2026 and Beyond: Trends Defining the Future

As we look toward 2026, the initial frenetic land-grab phase of the US market is ending, ushering in an era of maturity and consolidation.

1. The "OSB-First" States Will Pivot to Casino

As major states like Maryland advance iGaming bills, and lawmakers search for new revenue sources. In 2026, expect at least 1-2 major existing sports betting states to legalize iCasino to plug budget gaps. The realization that OSB is a low-margin customer acquisition tool, while iCasino is the profit engine, will drive legislative change.

2. Hyper-Personalization via AI

Operators will move beyond generic deposit bonuses. By 2026, AI will drive the user experience, offering personalized betting suggestions, tailored loyalty rewards, and customized interfaces based on individual player behavior, vastly improving retention rates.

3. Market Consolidation Continues

The high cost of entry (licensing fees and taxes) and the enormous marketing spend required to acquire customers make it difficult for smaller players to survive. We will likely see further M&A activity, resulting in a market dominated by an even smaller handful of mega-operators, with niche players focusing on specific product verticals like hyper-casual games or specific sports.

4. The Convergence of Media and Betting

The line between sports broadcaster and sports book will continue to blur. By 2026, expect truly frictionless "watch-and-bet" experiences integrated directly into streaming platforms, moving beyond simple odds displays on TV screens.

What It Means for the U.S. iGaming Industry — 2026 and Beyond

For operators and investors: the U.S. remains a high-potential but high-fragmentation market. The pie will grow — especially as more states liberalize — but regulatory, social, and compliance complexity will demand sophistication and flexibility. Firms who build compliance-first, multi-jurisdiction tooling will be better positioned.

For players: more choices are coming. More states will likely offer regulated casinos, better digital experiences, and multi-platform betting/casino bundles. But with increased access comes a need for responsible gaming awareness and potentially stronger regulation.

For regulators and society: expansion of iGaming will raise hard questions on public health, addiction, youth exposure, consumer protection, sports integrity and responsible advertising. Expect debates, and potentially more regulatory pressure, especially around marketing, youth protection, and cross-state access.