Poor Q1 betting outcomes negatively impacted iGaming's contributions, as per JMP's assertion.
The US online gambling market is experiencing a surge in growth, with both sports betting and iGaming sectors showing promising trends. According to JMP Securities, sports betting handle reached an impressive $12.10 billion in March 2025, marking a 15.5% year-on-year increase. The revenue from commercial sports betting has also seen a 13.1% year-to-date growth through May 2025.
On the other hand, iGaming revenue is also robust, with a 33% year-over-year increase in May and a 29.5% year-to-date growth, amounting to $4.29 billion through May 2025. JMP Securities predicts that this growth will continue, with the US online gambling market projected to reach $12.81 billion by 2030, growing at a compound annual growth rate (CAGR) of 16.5%.
One of the key drivers of this growth is the increasing number of regulated sports betting markets. Over half of US adults now have access to online or retail betting, with states like New York generating massive betting volumes and nearly matching Pennsylvania in combined sports betting and iGaming revenue. However, tax rates vary widely, with New York imposing a high 51% tax on gross sports betting revenue, which can compress margins for operators like DraftKings and FanDuel.
DraftKings is among the leading operators active in major markets, including New York, where it competes with other major brands like FanDuel, Caesars, and others. While exact market share numbers for DraftKings are not detailed, its inclusion in New York’s leading operators and the large handle volumes in the state suggest a significant market presence.
Operators are increasingly bundling sports betting with iGaming offerings to enhance retention and lifetime value, a strategy that DraftKings has also pursued. JMP Securities expects DraftKings' iGaming business to post a strong performance. However, the analysts predict that DraftKings will lose handle and GGR market share in Q1 due to suboptimal sports betting performances during March Madness.
Despite these challenges, JMP Securities remains optimistic about the future of the online casino sector. The firm predicts that DraftKings' sports betting results for Q1 will be slightly below company expectations, but its projections for DraftKings' sports betting growth are for a rate of growth of 14% a year between 2023 and 2028. Similarly, JMP's projections for DraftKings' iGaming growth are for a rate of growth of 17% a year between 2023 and 2028.
Industry trends towards the use of official league data, immersive experiences, technology like AI and VR, and the bundling of betting and casino products support market expansion and player engagement. JMP's analysts expect gaming operators to highlight improvements to gaming margins in Q2 and Q3, underpinned by tech and product improvements.
In conclusion, the US online gambling market is experiencing robust growth, with DraftKings being a significant player in the sector. However, tax and regulatory challenges in certain states present challenges that the company must navigate. The large upcoming states like California and Texas remaining closed suggest further growth potential once legalized.
The US online gambling market, encompassing sports betting and iGaming, is expected to reach $12.81 billion by 2030, showcasing a promising 16.5% compound annual growth rate (CAGR). DraftKings, a leading operator, is active in numerous markets, including New York, where it competes with major brands like FanDuel, Caesars, and others. The company is bundling sports betting with iGaming offerings to boost retention and lifetime value. Although DraftKings is expected to lose handle and GGR market share in Q1 due to suboptimal sports betting performances during March Madness, JMP Securities foresees robust growth for its iGaming business and sports betting at a rate of 14% and 17% annually between 2023 and 2028, respectively. The market expansion is supported by industry trends like the use of official league data, immersive experiences, technology advancements such as AI and VR, and the bundling of betting and casino products, which promote player engagement.
