Facts on BUSINESS May 2026

Physical, digital, or both: the strategic choice dividing US casino operators

Niche dominance and omnichannel integration are both coherent positions — and there is no single right answer.

The gap that volume does not show

Growth in volume is not the same as growth in satisfaction. The two are starting to diverge in ways that matter to operators with long-term retention problems.
The digital channel is cheap to enter and expensive to hold. Customer acquisition costs in online gaming are high and rising. A player active on two or three platforms simultaneously will move to the next attractive offer without hesitation. The mechanics of online retention require constant reinvestment in promotions, personalisation, and content — a dynamic this publication has examined in its series on digital persuasion and player psychology.

What is harder to measure, but visible in the data, is a satisfaction gap. As this publication's work on decision fatigue in iGaming marketing has shown, the abundance of digital choice creates its own friction — not the friction of travel, but the friction of endless, context-free stimulation that leaves players without a strong reason to stay with any one brand.

The player who makes a deliberate decision to visit a resort, attend a concert, eat at a restaurant, and spend a few hours on the floor is in a different psychological state from the player who opens an app during a commute. They are more likely to spend, more likely to return, and more likely to develop a brand attachment that no promotional offer can easily replicate.

Prediction markets and the unequal playing field

The pressure from prediction markets is real but unevenly distributed. According to Citizens analyst Jordan Bender, prediction markets captured approximately 5% of legal US sportsbook handle in 2025 — around $8 billion annualised.

The AGA estimates that prediction market platforms offering sports bets have cost state governments nearly $800 million in potential gaming taxes since the start of 2025.

FanDuel, the largest US sportsbook operator by handle, and DraftKings, the second largest, have both moved into prediction markets directly, positioning themselves to compete across both frameworks rather than defend against one. Operators without that scale or that presence in the prediction market layer face a more straightforward problem: a parallel product operating without the responsible gambling requirements, self-exclusion obligations, or state tax contributions that their own licensed operations carry.

The longer-horizon concern is acquisition. Kalshi logged 6.3 million downloads between September 2025 and February 2026, according to Sensor Tower data cited by Citizens, while FanDuel and DraftKings downloads fell in the same period. Prediction markets may not be pulling existing sportsbook users away in large numbers.

They may be reaching the next generation of players before those players ever sign up for a traditional platform — and doing so without the player protection infrastructure the licensed market was built around.
Sixteen states took action against sports event contracts during 2025.

The CFTC under new chair Michael Selig has signalled a more openly pro-innovation posture at the federal level. How that tension resolves will determine whether the licensed market and the prediction market layer eventually operate under comparable terms — or whether the structural asymmetry persists and widens.

No single right answer 

The US casino industry in 2026 offers operators three defensible positions: build the omnichannel relationship, dominate a niche where the brand is irreplaceable, or protect market access through exclusivity. None is obviously right and none is obviously wrong.

What none of them fully resolves is the same external variable — a federally supervised wagering layer growing at pace, operating without the obligations of the licensed market, and beginning to shape where the next generation of players first encounters gambling.

The physical destination, with its sport, its social occasion, and its experience that no app replicates, may be the most durable answer to that pressure. But it is also the most capital-intensive and the slowest to prove out. There is no single right answer.

There is only the operator, the market, the regulation, and the customer — and the bet that best fits all four.