US iGaming revenue growth slows to 12% in Q3 while sportsbook handle holds up, Citizens says
Citizens Equity Research reports US online casino revenue grew 12% in Q3 2026, the slowest pace of the year, while sports betting handle rose 7%. Analysts see little threat to sportsbooks from prediction markets.
GamblingSource: GamblingNews
The US online casino sector recorded its weakest growth of 2026 in the third quarter, according to Citizens Equity Research. Industry iGaming revenue increased 12% year on year, down from 16% growth in the second quarter and 19% in the first. Within the quarter, September showed a modest uptick, with growth of 12% compared with 11% in August.
FanDuel stayed at the top of the iGaming rankings, although its market share slipped to 25.1% from 26.6% a year earlier. DraftKings fell from 24.3% to 22.2% year on year, yet that figure was an improvement on its 20.9% share in the second quarter. Citizens attributed the sequential gain probably to changes DraftKings made to its business model in the spring. Analysts also observed that the effect of bet365 and Hard Rock launching in West Virginia and Michigan was starting to wear off.
BetMGM's share declined to 18.6% from 20.7%, marking its sixth consecutive quarterly drop. Fanatics was the standout, lifting its share from 3.9% to 5.2%, slightly below the 5.4% it held in Q2. The order of the largest operators did not change.
Sports betting data looked firmer. Same-store handle rose 1% year on year in September, the strongest monthly increase of 2026 apart from June and July, which were boosted by the World Cup. Handle for the third quarter climbed 7%, even with one fewer week of NFL games. DraftKings held the biggest handle share at 37.6%, up from 37.3%. FanDuel's handle share increased from 31.4% to 32.8%, but its share of gross gaming revenue fell from 37.7% to 35.4%.
Fanatics saw its handle share decline from 11.2% to 9.9%, while its GGR share rose from 7.3% to 8.8%. BetMGM's margin improved from 9.6% to 10.2%, Caesars' fell from 7.6% to 6.9%, and bet365 stayed at 9.4%.
The figures back an earlier view from Citizens analyst Jordan Bender that prediction markets are not a major danger to sportsbooks. He argued that the heavy marketing by prediction platforms may be bringing new people into sports betting rather than simply drawing away existing customers. Analysts expect sportsbook handle to keep growing in the fourth quarter as the NFL season advances.
Based on reporting by GamblingNews.