The U.S. iGaming and online sports betting industries are projected to generate $26.8 billion in combined gross revenue this year, with expectations to exceed $41 billion by 2028, according to Vixio Regulatory Intelligence.
Their forecast shows that online sports betting alone could bring in $17.2 billion in gross revenue this year. Projections for 2028 suggest figures ranging between $24.8 billion and $29 billion. Currently, mobile sports betting is permitted in 31 states, with eight more allowing it exclusively at land-based casinos. Missouri is set to enter the mobile betting space later this year.
Since the repeal of the Professional and Amateur Sports Protection Act (PASPA) in 2018, the initial focus was on which states would legalize mobile sports betting. Now, the discussion has shifted toward regulatory issues and taxation. As several states face budget shortfalls, proposals to increase taxes on gaming revenue have gained traction.
“In 2025, the policy agenda will prioritize regulatory controls over market expansion,” said James Kilsby, Vixio’s chief analyst. “Tax hikes are becoming a central theme, with lawmakers in several states already advocating for higher rates just weeks into the year.”
Last year, Illinois introduced a tiered tax structure for sports betting, raising tax rates for the largest operators. Maryland and Ohio are also considering increasing taxes on sports betting in 2025.
Limited Expansion Opportunities for iGaming and Sports Betting in 2025
In terms of new states potentially legalizing sports betting in 2025, Vixio highlights Alabama, California, Georgia, Minnesota, Mississippi, and Texas. California, Texas, and Georgia are the most attractive markets, but progress in these states remains unlikely. Georgia, in particular, has a history of failed attempts to pass sports betting legislation.
The growth of iGaming is even more restricted. Full iGaming operations are currently legal in only seven states: Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia. Although six states considered iGaming legislation in 2024, none passed a bill. Vixio anticipates that 2025 will be similarly challenging for iGaming advocates.
“While up to ten states may explore iGaming legislation in 2025, none have emerged as clear candidates for approval,” according to the report.”
Opposition to iGaming expansion often revolves around fears of reducing foot traffic to physical casinos and concerns raised by labor unions.
Growing Competition for Sportsbook Operators
Vixio’s baseline projection shows that gross gaming revenue for U.S. online sports betting could reach nearly $25 billion by 2028, with New York remaining the largest market and Florida moving into the second position.
In a more optimistic scenario, revenue could climb to $29 billion by 2028 if Georgia, Mississippi, Oklahoma, Texas, and Washington adopt comprehensive sports betting regulations. While Washington currently permits sports betting, it is limited to tribal casinos.
A rising challenge to traditional sportsbooks comes from sports event contracts, offered by companies like Crypto.com and Kalshi. These contracts are classified as derivatives rather than traditional bets, enabling them to operate across all 50 states without state gaming licenses.
“A key development is the launch of ‘sports event trading’ by Crypto.com, allowing users to predict outcomes like the 2025 Super Bowl,” Vixio noted. “Although not licensed by state gaming regulators, these contracts are overseen by the U.S. Commodity Futures Trading Commission (CFTC).”