The US online casino market has posted its weakest growth rate in the third quarter of 2026. Meanwhile, sports betting has proven resilient despite fears that precision markets would poach customers from licensed sportsbooks. The coming months will show whether these analyst predictions are right, as operators fight for customers in an increasingly crowded market.
Operator Market Share Showed Only Small Shifts
According to Citizens Equity Research, iGaming industry revenue rose 12% from last year. However, this is a notable drop from the 16% growth in Q2 and the 19% in Q1. September saw a slight improvement, with revenue growth of 12% versus 11% in August. FanDuel remained the leading iGaming operator, though its market share fell to 25.1% from 26.6% last year.
DraftKings’ market share fell from 24.3% to 22.2%, but it still improved its 20.9% Q2 position. Citizens said the improvement likely stemmed from adjustments to DraftKings’ business model during the spring. Analysts also noted that the impact of new market launches by bet365 and Hard Rock in West Virginia and Michigan was beginning to fade.
BetMGM’s market share dropped to 18.6% from 20.7%, its sixth straight quarterly decline. Fanatics was the standout performer, increasing its iGaming market share from 3.9% to 5.2%. This shift left it close to its Q2 share of 5.4%. Despite these shifts, the overall rankings of the biggest industry players remained unchanged.
Sports Betting Handle Will Likely Keep Growing in Q4
Sports betting figures were more encouraging. Same-store handle grew 1% year-on-year in September, its strongest monthly growth in 2026 outside June and July, which were affected by the World Cup. Handle was up 7% in Q3, despite one less week of NFL play during the period. DraftKings had the largest share of sports betting handle at 37.6%, up from 37.3% a year ago.
FanDuel’s handle share rose from 31.4% to 32.8%. However, its GGR share slipped from 37.7% to 35.4%. Fanatics’ handle share fell from 11.2% to 9.9%, while its GGR share climbed from 7.3% to 8.8%. BetMGM’s margin improved from 9.6% to 10.2%, whereas Caesars’ margin dropped from 7.6% to 6.9%. Bet365 maintained a 9.4% margin.
The sports betting results support an earlier assessment by Citizens analyst Jordan Bender, arguing that prediction markets do not pose a significant threat to sportsbooks. He argued that aggressive marketing by prediction platforms may actually be introducing more people to sports betting, rather than simply diverting existing sportsbook users. Overall, analysts expect sportsbook handle to increase in Q4 as the NFL season progresses.