US iGaming Growth Slows to 12% as Fanatics Gains Market Share
US online casino revenue kept growing in the third quarter, but the pace points to a more competitive market. iGaming growth slowed to 12% year over year, its lowest rate on record, according to Citizens data reported by NEXT.io. That compares with 16% growth in the second quarter, a clear loss of momentum even as the market continued to expand. Analysts expected the deceleration, and September brought a modest uptick to 12% from August’s 11%, Gambling News reported. A one-point monthly improvement offers some relief, but it doesn’t reverse the broader slowdown.
Fanatics gains as leading operators lose share
The ranking stayed intact, but several major operators ceded market share, suggesting that established positions are becoming less secure. FanDuel remained in front at 25.1%, down from 26.6% a year earlier. DraftKings held 22.2%, compared with 24.3% a year ago, but recovered from 20.9% in the second quarter. The difference between its annual decline and quarterly rebound matters: a short-term gain can signal that a business change is having an effect, while the year-over-year comparison shows the ground it still has to make up.
Citizens attributed the rebound in part to changes DraftKings made to its business model in the spring; NEXT.io called it the company’s first quarterly share gain in two years. That’s a notable shift after a long stretch without a quarterly gain, though the data doesn’t establish whether the improvement will last. BetMGM’s share fell to 18.6% from 20.7%, extending its decline to six consecutive quarters. Caesars also slipped, to 6.4% from 7.1%. The continued losses at both operators show how a market leader can remain large while still giving up ground over time.
Fanatics stood out, lifting its share to 5.2% from 3.9% over the year, though it remained just below its second-quarter 5.4%. Rush Street Interactive rose to 7.4% from 6.8%. Bet365 reached 1.7%, up from 0.4%, after launching in Michigan and West Virginia. Those figures show how expansion into new states can support early growth, but they don’t by themselves show whether customers will stay or how much business the launches will sustain.
Citizens analysts said the initial lift from those launches—and Hard Rock’s entry into the same states—was beginning to fade. That cooling is a useful reminder that a launch can create a temporary boost without changing an operator’s long-term position. Fanatics’ annual gain is more substantial than a single-market opening, yet its slight decline from the prior quarter leaves open whether it can keep taking share. The numbers here are underwhelming for some incumbents, but they also show that smaller rivals can still make progress.
Sportsbooks post steadier results
Sports betting grew at a firmer clip: quarterly handle increased 7% despite one fewer week of NFL games, while gross gaming margin held at 9.6% year over year. Handle measures the amount wagered, while margin indicates the portion retained as gross gaming revenue, so the two figures describe different parts of the business. Neither alone tells the full story of operator performance. September same-store handle rose 1%, its strongest monthly result of 2026 outside the June and July World Cup period.
The comparison with iGaming is useful because the two segments are facing different patterns of growth. Sports betting’s quarterly handle increase suggests continued activity, while the casino segment’s slower growth points to a maturing competitive contest for customers. And yet, a firm handle figure doesn’t guarantee that every sportsbook benefited equally: share and margin varied across operators. If you’re working in this space, that distinction matters when judging whether more wagering is translating into stronger revenue performance.
DraftKings led handle share at 37.6%, slightly above its 37.3% a year earlier. FanDuel followed at 32.8%, up from 31.4%. FanDuel’s share of gross gaming revenue declined to 35.4% from 37.7%, but its 10.4% margin topped DraftKings’ 9.5%. The gap between handle share and revenue share shows why volume alone can give an incomplete picture. A sportsbook can attract a large portion of wagers yet retain a different portion of revenue, depending on its margin.
Fanatics’ handle share fell to 9.9% from 11.2%, even as its revenue share grew to 8.8% from 7.3%. BetMGM’s margin improved to 10.2%; Caesars’ dropped to 6.9%. These mixed movements resist a simple ranking of winners and losers: Fanatics gained on revenue share while losing handle share, and the two casino operators moved in opposite directions on margin. That said, a single quarter’s figures don’t settle whether any of these changes reflect durable customer behavior.
Prediction markets remain part of the debate
Citizens analyst Jordan Bender has argued that prediction markets pose little threat to licensed sportsbooks, and that their advertising could draw new customers into sports wagering. That view treats the products as potential sources of attention as well as competition. The question has persisted through the autumn as NFL contracts have driven much of prediction-market volume and state regulators have challenged sports event contracts.
Those developments help explain why the comparison remains unsettled. A market that draws interest around sports could raise awareness of wagering, but that doesn’t prove the same audience will use licensed sportsbooks or that operators will capture new business. The available figures here describe sportsbook results and the prediction-market debate; they don’t establish a direct effect between the two. (And this is the part most people overlook.) Claims about threat or benefit need to be judged against actual customer and revenue behavior, not just attention around a product.
What slower growth means for operators
The slower rate comes amid substantial online casino activity: in New Jersey, online casinos earned more than Atlantic City’s casino floors in September. That comparison underscores how much business has shifted toward online platforms in at least one major market, even as growth across the wider iGaming category cools. Scale remains. The question is how much room operators have to expand without taking share from one another.
Analysts expect sportsbook handle to increase in the fourth quarter as the NFL season continues. That expectation gives operators a near-term reason for optimism, but the third-quarter results show why strong seasonal activity and sustained market gains shouldn’t be treated as the same thing. Operators still need to translate customer activity into revenue and hold their position against rivals. What this means for you is that the headline growth rate tells only part of the story: the next test is whether companies can maintain gains after launch effects fade and competition tightens.
For operators, the figures suggest that growth remains available, but share gains are becoming harder to secure. That’s more significant than it looks: a growing market can still produce uneven results when rivals are competing for the same customers. The current data offers evidence of that pressure, from declining shares among several major brands to a first quarterly gain for DraftKings in two years. Whether those shifts persist will depend on results beyond this quarter. No easy win.
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