Strategy Memo
To: Chief Strategy Officers, US Land Based Casino Operators
From: The Gaming Boardroom (TGB)
Subject: Retail still holds the majority of revenue, but it is not where the growth is
Date: 20 July 2026
Issue The American Gaming Association’s State of the States 2026 report puts 2025 US commercial gaming revenue at $78.62 billion: land based casinos contributed $51.06 billion, up 2.3%, sports betting $16.89 billion, up 22.6%, and iGaming $10.73 billion, up 27.6%. Retail holds 65% of the total, but growing roughly ten times slower than iGaming means the balance keeps shifting even while the majority does not move.
Context Operators are not converging on one answer. MGM and Bally’s are integrating loyalty and licensing across physical and digital channels; Churchill Downs and Las Vegas Sands have deliberately exited digital to concentrate capital where brand cannot be replicated online; tribal operators, holding over $40 billion in 2024 revenue, largely sidestep the question through exclusivity protections. Prediction market platforms add a further complication, taking an estimated 5% of legal sportsbook handle without paying licence fees or tax, which erodes margin regardless of which channel strategy a board chooses.
Recommended Actions
1. Name the strategy explicitly at board level, integration, specialisation, or exclusivity reliance, rather than letting capital allocation default by department.
2. Stress test any specialisation case against the 27.6% iGaming growth rate specifically, not the blended total, since blended figures understate what staying retail-only actually forgoes.
3. Treat prediction market displacement as a cross-channel capital planning issue, since it hits sports betting margin whether or not the operator has gone digital.
Questions for Managers
1. Which of the three strategic paths are we actually pursuing, and has that been said out loud to the board rather than assumed by default?
2. If we are relying on brand irreplaceability to justify staying retail-focused, what evidence do we have that this holds against a 27.6% online growth rate?
3. How exposed is our sports betting margin to prediction market displacement, and is that reflected in our current channel investment case?
Sources
1. American Gaming Association, ‘State of the States 2026’, 2026, https://www.americangaming.org/resources/state-of-the-states-2026/
2. iGaming Review, ‘Physical, digital, or both: the strategic choice dividing US casino operators’, 2026, https://igamingreview.com/physical-digital-or-both-the-strategic-choice-dividing-us-casino-operators/