Which US States Are Winning the $17.9B Gambling Jackpot?

As the old gambling saying goes, the house always wins, yet the release of the American Gaming Association’s (AGA) State of the States 2026 report shows US gaming tax revenues surged beyond $17.9 billion in 2025 - so you could say the state treasuries aren’t doing too bad themselves.

Given that equates to roughly $49 million a day in gaming tax revenues, you’d be forgiven for wondering how much of a share your local state authority was taking in, and just how the money was being spent. 

America's Multibillion-Dollar Gambling Tax Windfall

Easily the biggest tally on record, America's commercial gaming sector managed to generate over $78.62 billion in revenue in 2025 - a sizable hike of 9.1% on the AGA's 2024 findings. As if that wasn’t impressive enough, direct gaming taxes grew even faster than the industry's rate of growth, soaring by 12.3% year-on-year (YoY).

It's worth pointing out here that the AGA's tax headline figure excludes corporate income, sales and payroll taxes. It also doesn’t include federal sports-betting excise payments, with lottery proceeds and tribal gaming revenues also all sitting outside the scope of these commercial gaming figures.

Nevertheless, of this, traditional in-person casinos remained the country's biggest revenue drivers, registering nearly twice that of commercial sports betting and online casino revenues combined. An impressive stat, considering how popular betting has synced with one of the nation's favorite pastimes of watching the NFL, NBA, and MLB.

Key AGA Report Figures:

• $17.86 billion: record direct gaming taxes.
• 12.3%: annual growth in that tax haul.
• $51.06 billion: traditional casino gaming revenue.
• $16.89 billion: commercial sports-betting revenue, up 22.6%.
• $10.73 billion: online casino revenue, up 27.6%.

Which US States Are Pocketing the Most in Gaming Taxes?

Undeniably, Pennsylvania took the crown for highest earners in 2025 having collected a whopping $2.8 billion in gaming taxes, outperforming New York which clocked up $2.5 billion. In fact, the Keystone State coffers benefited by more than double that of Nevada ($1.2 billion), Michigan ($1.1 billion), and Illinois ($1.0 billion), according to the AGA’s ranking table.

For the number crunchers among you, these five states alone accounted for nearly half the national total, despite both Ohio and New Jersey also clearing more than $1 billion apiece. 

Of these, Illinois posted the fastest growth of the top five, with its industry revenue collection jumping 48.9% YoY. However, despite Las Vegas reputation as a globally recognized gambling hub, the city itself (and Nevada at large) is still reeling from an alarming drop in foot traffic since 2024, due in part to the ongoing Canadian-US travel boycott.

Where Are America's Gaming Tax Billions Actually Going?

Despite the ongoing opposition to expanding legalized gambling in states like Texas and California, the sizable tax revenues being generated elsewhere are genuinely starting to reap real-world benefits for residents in states that do.

Perhaps one of the greatest examples of this can be found in Maryland, which reportedly invested $599.1 million raised by its state casinos into its Education Trust Fund in fiscal 2026. As a result, the Old Line State has since plowed millions into regional programs that support everything from early childhood education to its primary and secondary schools, as well as several school construction projects.

Meanwhile, Pennsylvania’s gambling dividends have been invested in its road infrastructure, as well as upgrading other critical public services such as its firefighting departments. For instance, in March 2026, Hallam Borough was awarded $208,312 through the Local Share Account program to resurface part of East Beaver Street and install six accessible pedestrian ramps. Likewise, in September, the program allowed East Norriton Township to secure $700,000 in order to purchase a new tower ladder fire truck for its Norriton Fire Engine Co.

A Risky Business - Are States Becoming Too Dependent on Gambling?

Arguably, there is an underlying concern now that state policymakers and treasurers may erroneously assume that the gaming sector’s record-breaking growth will continue, which could undoubtedly lead to a budgeting shortfall further down the line. 

You only need to look at New York’s mixed fortunes whose mobile sports wagering generated $1.3 billion in state tax revenue in the 2025-26 fiscal year, yet in June its operator revenue disturbingly fell 43.5% YoY despite wagering levels increasing 36.6%. 

Furthermore, statewide gambling revenues can also be subject to global recessions and external factors such as the rising cost of gas - both likely to leave local residents with less disposable income to spend on gambling. Not only that, but sports betting tax is also vulnerable to unpredictable sporting outcomes, as witnessed in Pennsylvania in February 2025, where sportsbook revenues plummeted 75% YoY in February 2025 following massive punter payouts when the Philadelphia Eagles won the Super Bowl.

Could Prediction Markets Put State Gaming Tax Revenues at Risk?

As things stand, prediction markets are certainly on course to impact the size and growth of each state's gambling tax revenues, particularly when it comes to sports betting tax incomes. The primary reason for this is simply that prediction markets such as Kalshi and Polymarket operate under a different regulatory and tax structure than the likes of sportsbooks, including DraftKings and FanDuel.

Whilst still being taxable income streams, the states could effectively lose out on billions of dollars as the money flows into federally regulated platforms instead. 

The considerable sweepstakes casino market, which overlaps with prediction markets, also represents millions in untaxed gambling revenue.

The Bottom Line: It’s All Fun And Games Until The Public Loses Out 

Without a shadow of a doubt, the US gambling boom is fuelling an unprecedented surge in not just taxable revenues across the country, but also much-needed public spending. And, for all the negative press the industry gets as a whole, the reality remains that the taxes levied can genuinely deliver a much-needed lifeline for public services.

Nonetheless, just like the concern raised by the NBA with regard to prediction markets adhering to the desired takedown of problematic betting markets, state legislators too face the prospect of non-compliance. As a result, there is an inevitability that unless these tax revenues are redirected back into the state treasuries somehow, it could be regular US citizens who ultimately lose out.