iGaming, Sports Betting Markets Seen Swelling to $26.8B in 2025

Posted on: February 7, 2025, 05:40h. 

Last updated on: February 7, 2025, 05:40h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

The domestic iGaming and online sports betting markets could notch combined gross revenue of $26.8 billion this year on their way to topping $41 billion by 2028, according to Vixio Regulatory Intelligence.

The Texas Capitol building in Austin. A research firm said there won’t be much movement on iGaming and sports betting legislation in the US this year. (Image: Visit Austin)

Vixio notes the US internet sports wagering segment could post gross revenue of $17.2 billion this year compared to base and bull case estimates of $24.8 billion to $29 billion by 2028. Currently, 31 states permit mobile sports wagering while another eight offer that form of betting at land-based casinos. Missouri will join the mobile betting camp later this year.

In the years immediately following the 2018 Supreme Court ruling on the Professional and Amateur Sports Protection Act (PASPA), the focus was on which states would permit mobile sports betting. More recently, attention has shifted to regulatory and tax issues. Some cash-hungry states are considering boosting gaming taxes to bolster coffers.

In our view, more so than market expansion, the policy focus for 2025 will remain more on the potential for regulatory restrictions, both at the state and possibly also federal level,” observes James Kilsby, chief analyst at Vixio. “Tax increases seem set to be a key theme of the year ahead, with governors or lawmakers in several states already pushing for higher tax rates within just the first weeks of 2025.”

Last year, Illinois went to a graduated tax scheme on sports wagering in which the largest operators pay increased rates. Maryland and Ohio are among the states mulling higher sports wagering taxes this year.

2025 iGaming, Sports Wagering Expansion Could Disappoint

Regarding possible 2025 additions to the roster of states allowing sports wagering, Vixio said Alabama, California, Georgia, Minnesota, Mississippi, and Texas are the states to watch. California, Texas, and Georgia are the most coveted of that group, but the first seem to be unlikely to add sports betting this and Georgia has a history of disappointment on that front.

As for iGaming, it’s allowed in just seven states today — Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia. Vixio notes six states considered related legislation last year, but those efforts resulted in no approvals and the research firm sees a similarly difficult road ahead in 2025.

“Vixio anticipates similar tough-going for iGaming expansion advocates in 2025, with up to ten states likely to consider legislation, but none are a clear contender to actually approve a bill, as things stand,” note the research firm.

Concerns about cannibalization of brick-and-mortar casinos as well as opposition from organized labor groups are among the top hurdles to broader adoption of iGaming, adds Vixio.

Competition for Sportsbook Operators

In Vixio’s base case projection, gross gaming revenue (GGR) for the US online sports wagering segment will ascend to nearly $25 billion by 2028. In that scenario, New York remains the largest market with Florida moving into the second spot.

The research firm’s bull case scenario is $29 billion in internet sports betting revenue in 2028, assuming Georgia, Mississippi, Oklahoma, Texas, and Washington State approve sports wagering. Washington State allows it today, but only at tribal casinos.

Vixio also highlighted an emerging competitive threat in the form of sports event contracts, which companies such as Crypto.com and Kalshi are offering in all 50 states because those instruments are considered derivatives, not sports bets.

“Elsewhere, another closely watched trend is the recent launch of ‘sports event trading’ across all 50 states by Crypto.com, allowing customers the opportunity to trade their own predictions on the outcome of the 2025 Super Bowl,” concludes Vixio. “The offering is not licensed by any state gaming regulatory authority; however, according to Crypto. com, it is permissible as a form of event contract subject to regulation by the U.S. federal government’s Commodity Futures Trading Commission (CFTC).”