U.S. sportsbooks generated record sports betting revenue in 2025, even as the pace of betting growth slowed sharply.
Commercial sports betting revenue rose to $16.89 billion in 2025, up 22.6% year-over-year, according to the American Gaming Association’s annual State of the States report. The total excludes tribal sportsbook revenue, including Florida mobile betting.
New York remained the nation’s largest market with more than $2.5 billion in annual sportsbook revenue, while Illinois, New Jersey and Ohio each topped $1 billion, according to the report.
Sports betting revenue outpaces handle
For the first time in the post-PASPA era, the AGA’s annual State of the States report omitted national sports betting handle, though the trade group separately reported earlier this year that commercial sportsbooks handled $166.94 billion in 2025, up 11.3% from 2024.
That means sportsbook revenue grew at roughly twice the pace of betting volume.
Based on AGA-reported handle and revenue figures, implied national sportsbook hold (the percentage of wagers sportsbooks keep after paying winners) rose to roughly 10.2% in 2025, up from 9.2% in 2024, 8.0% in 2022 and 6.9% in 2019.
Part of that increase reflects a return to more typical sportsbook outcomes after customer-friendly NFL results weighed on operators in 2024. It also comes as sportsbooks lean more heavily on parlays, same-game parlays and in-play betting while spending less aggressively on promotions.
No new state tailwind
Earlier years of legal sportsbook growth were largely driven by state launches and customer migration into regulated markets. Increasingly, operators are generating more revenue from existing betting activity.
2025 marked the first year since the Supreme Court struck down PASPA in 2018 that no state enacted legislation authorizing sports betting. Missouri launched in December, too late to materially impact annual national results.
Early 2026 shows similar trends
Commercial sports betting handle fell roughly 2% in the first quarter, the first quarterly decline on record, according to data compiled by LSR Analyst Eric Ramsey.
FanDuel‘s sports betting handle fell 9% year-over-year in the first quarter, while monthly active players declined 6% and betting revenue increased just 1%. Flutter executives attributed part of the slowdown to lower NFL and NBA betting engagement, alongside what executives described as suboptimal promotional reinvestment. DraftKings, by comparison, grew handle 1.5%, while sportsbook revenue increased 24%.
Tax revenue keeps climbing
Sports betting tax revenue rose 32.4% to a record $3.71 billion in 2025, outpacing sportsbook revenue growth.
Illinois moved to a progressive tax structure topping out at 40% in 2024, then adopted a per-wager fee in 2025 that major operators passed on to customers. New Jersey, Maryland and Louisiana also approved sportsbook tax increases in 2025, while states including Colorado and Virginia tightened promotional deduction rules.
The AGA has used a similar tax argument against sports event contracts offered through prediction market platforms, estimating those products have diverted hundreds of millions in potential state tax revenue.
Prediction markets impact sports betting revenue
The AGA pointed to an Eilers & Krejcik Gaming analysis estimating that 69% of sports event contract volume comes from states without legal online sports betting, with California and Texas accounting for 43% of that total. Major sportsbook operators have echoed that view in recent earnings calls, describing direct cannibalization as minimal despite the slowing handle growth.
AGA CEO Bill Miller escalated the trade group’s criticism of the sector this week during an appearance in Las Vegas, where he sharply criticized CFTC Chairman Michael Selig.
“The head of the CFTC, quite frankly, is a joke,” Miller said. “He believes somehow that what he’s doing is Uber, and the rest of the country is the taxicab industry. That’s not the case.”
The CFTC has sued multiple states to block enforcement actions against prediction markets while arguing the contracts fall under federal jurisdiction and are not simply sports betting products offered outside state regulatory frameworks.
“These guys thought they were going to blitzkrieg their way through the world,” Miller said. “But we’ve started to see real movement in the last month or two. We are a year and change into this fight. We’re making their life very difficult.”
