The US iGaming market has experienced explosive growth since the Supreme Court’s 2018 decision to overturn the Professional and Amateur Sports Protection Act (PASPA). What started out as a state-by-state growth of sports betting has developed into a multijurisdictional internet casino, poker, and fantasy sports ecosystem.
However, as operators negotiate a more competitive environment characterised by growing costs, complicated regulations, and market saturation in important areas, this expansion comes with serious obstacles.
The market dynamics have shifted dramatically in recent years, with established operators consolidating their positions while newer entrants struggle to find a profitable footing. The competitive landscape has changed as a result of the winners and losers this climate has produced, which has forced strategic changes and market exits.
Why international players are stepping back?
The decision by major international operators, such as Super Group, to exit the US market represents a broader trend of strategic repositioning. Operating in America’s fragmented iGaming market has proven more difficult than first thought due to economic realities.
“Super Group’s exit underscores how tough the US iGaming market has become.”
– Jason Heller, Senior Vice President at 5WPR
Rising operational costs have become a primary concern. State governments have steadily increased tax rates and licensing fees, creating an environment where profitability becomes increasingly elusive. The complexity of managing compliance across multiple jurisdictions adds another layer of expense that many operators find unsustainable.
Jason Heller, Senior Vice President at 5WPR, has been following these market shifts through the firm’s work in sports, gaming, and esports. His team employs a combination of strategies, including out-of-home advertising, programmatic media buying, and paid social campaigns, to help brands connect with audiences in a space characterised by both rapid innovation and strict regulation.
Speaking exclusively to SiGMA News, Heller explains, “Between rising state taxes, steep licensing fees, and slowing expansion, the economics don’t add up. Their pivot reflects a broader trend, operators are prioritising markets where profitability is clearer, and growth is more sustainable.”
Other firms Evoke (888 Holdings), Kindred Group (Unibet), Tipico, PointsBet, and Betfred have also withdrawn, squeezed by rising state taxes, high licensing fees, and tough competition from dominant US players.
How market leaders maintain their edge?
Domestic giants like FanDuel, DraftKings, and Caesars are successful because they have a number of key benefits that are difficult for rivals from other countries to match. Prior to the legalisation of sports betting, these companies had built user bases and a thorough understanding of American sports culture thanks to their daily fantasy sports foundation.
Due to their substantial size advantages, these market leaders put smaller competitors at a disadvantage. FanDuel and DraftKings have about 34 percent and 32 percent of the market, respectively. Because of this, both businesses are able to invest more in technology, bargain with suppliers for better terms, and more successfully absorb regulatory expenditures than smaller businesses.
Regulatory resilience
Perhaps most importantly, these large operators have demonstrated the ability to adapt to changing regulatory environments. When states like Illinois implement new per-bet levies or increase tax rates, market leaders can pass these costs to consumers through transaction fees while maintaining profitability. Smaller operators often lack this pricing flexibility and may see their margins compressed to unsustainable levels.
Heller notes, “FanDuel, DraftKings, and Caesars maintain their dominance through a combination of early-mover advantage, scale economics, and brand power. Their roots in daily fantasy sports granted them large, engaged user bases that translated seamlessly into sportsbooks once sports betting was legalised. With extensive marketing budgets and advanced tech platforms, they operate more efficiently than smaller competitors and command top market shares.”
AI and blockchain transform gaming experiences
Blockchain technology and artificial intelligence are radically changing the way iGaming functions, opening up new opportunities for operators and players alike while resolving long-standing issues in the sector. A new benchmark for iGaming experiences is being established by these technological advancements. Gamers now demand more individualised, open, and immediate services. Operators who fail to adopt these technologies risk falling behind competitors who can offer superior user experiences.
Heller observes, “AI and blockchain are disrupting iGaming by rewriting the rules of engagement. AI personalises play and sharpens the odds, while blockchain delivers instant payouts and provably fair results. The old model of clunky payments and opaque games is giving way to a faster, smarter, and more transparent experience.”
Sustainability in the US iGaming market
The US iGaming industry is changing fast. Success now depends on how well operators adapt to shifting regulations, use emerging technologies, and build stable business models. As the market matures, local companies are holding a clear edge over international ones.
Growth is no longer just about expansion; it’s about long-term profitability. Companies that can manage complex rules while offering intense tech-driven experiences are more likely to succeed. AI and blockchain are expected to play a bigger role, opening doors for innovation but also raising the standards for entry. As trust becomes a central issue, clear communication and innovative marketing are key to keeping players engaged and informed in this evolving digital space.
