Last updated: September 2026 | Legal in 32 states + DC | 21+ in most states
The US sports betting market processed $165.58 billion in total wagers in 2025 - the first year the industry crossed $100 billion in handle, and then doubled it. Gross gaming revenue across all licensed states reached $16.80 billion at a national hold rate of 10.15%, generating $3.66 billion in state tax contributions. New York alone contributed nearly $1.3 billion in sports betting taxes in 2025, despite - or perhaps because of - the state's 51% gross gaming revenue tax rate, the highest in the country.
Through Q1 2026, US sportsbooks have already processed $40.47 billion in handle and generated $3.82 billion in GGR, putting the industry on pace for another record year. Sports betting is now one of the two or three largest segments of the US gambling industry by revenue.
Two operators dominate it to a degree that most coverage underplays. FanDuel and DraftKings together control approximately 43.6% and 36.4% of US online sports betting handle respectively - a combined 80% duopoly share of the regulated market. The remaining 20% is split between BetMGM (approximately 14% of GGR), Caesars, ESPN Bet/theScore Bet, Fanatics, bet365, BetRivers, and others.
This guide covers the real state of US sports betting in 2026: who dominates and why, how the economics work, what you need to know about tax obligations, and an honest assessment of where each major operator leads and where it falls short.
Is sports betting legal in your state?
Sports betting is legal in 32 states plus Washington D.C. as of September 2026, following the Supreme Court's 2018 decision in Murphy v. NCAA, which struck down the Professional and Amateur Sports Protection Act (PASPA) and allowed states to authorise sports betting independently.
States with legal online sports betting
| State | Online Launch | Major Operators | Tax Rate | Notes |
|---|---|---|---|---|
| New York | Jan 2022 | FanDuel, DraftKings, BetMGM, Caesars, others | 51% | Highest tax rate in US; $1.3B tax revenue in 2025 |
| New Jersey | Aug 2018 | FanDuel, DraftKings, BetMGM, Caesars, bet365, others | 13% | First major online market; most mature |
| Pennsylvania | May 2019 | FanDuel, DraftKings, BetMGM, Caesars, bet365, others | 36% | Second-largest market |
| Illinois | Jun 2020 | FanDuel, DraftKings, BetMGM, Caesars, others | 40% (top bracket) | Surcharge controversy 2026 |
| Michigan | Jan 2021 | FanDuel, DraftKings, BetMGM, bet365, others | 8.4% | Most competitive tax; fastest growth |
| Ohio | Jan 2023 | FanDuel, DraftKings, BetMGM, Caesars, others | 20% | Rapid market development |
| North Carolina | Mar 2024 | FanDuel, DraftKings, BetMGM, Caesars, others | 18% | $659M handle in first month |
| Massachusetts | Mar 2023 | FanDuel, DraftKings, BetMGM, Caesars, others | 15% | Strong early growth |
| Arizona | Sep 2021 | FanDuel, DraftKings, BetMGM, Caesars, others | 10% | Tribal + commercial |
| Colorado | May 2020 | FanDuel, DraftKings, BetMGM, others | 10% | Stable market |
| Indiana | Sep 2019 | FanDuel, DraftKings, BetMGM, others | 9.5% | Consistent performer |
| Virginia | Jan 2021 | FanDuel, DraftKings, BetMGM, others | 15% | Major northern Virginia market |
| Tennessee | Nov 2020 | DraftKings (only) | 50% | Online-only; DraftKings sole operator |
Plus DC, and additional states including Iowa, West Virginia, Connecticut, Louisiana, Wyoming, Maryland, Kansas, Kentucky, Vermont, Rhode Island, Montana, New Hampshire, Oregon, Nebraska (retail), Nevada (retail+online), Mississippi (retail), South Dakota (retail), Wisconsin (retail).
States not yet legal
California: The largest untapped US gambling market. Multiple ballot initiatives have failed. Las Vegas Sands is investing heavily in a Texas push; California remains unlikely before 2028 at the earliest.
Texas: The second-largest untapped market. Active lobbying from operators but strong political resistance. 2027 is the most aggressive realistic timeline.
Florida: A complex tribal exclusivity dispute involving the Seminole Tribe and state government has resulted in sporadic legal mobile sports betting access. As of September 2026, the situation remains contested.
Minnesota, Georgia, Missouri: Active legislative discussions. Minnesota is closest; Georgia and Missouri remain uncertain.
The duopoly: understanding FanDuel and DraftKings' market control
This is the most important structural reality of the US sports betting market and the one most coverage avoids stating directly.
FanDuel (43.6%) and DraftKings (36.4%) together control approximately 80% of US online sports betting handle. Independent data through March 2026 shows DraftKings holding the handle lead at 35.8% to FanDuel's 32.0% - the gap has narrowed since DraftKings reclaimed the crown from FanDuel in May 2025. The combined duopoly share is currently approximately 67.8% of all dollars wagered, down slightly from historical highs near 75% as Fanatics, bet365, and ESPN Bet/theScore Bet have taken incremental share.
Why this matters for bettors: When two operators control 80% of the market, the price competition that should theoretically reduce margins for bettors is structurally limited. Both FanDuel and DraftKings operate at aggressive promotional levels to acquire customers - welcome bonus spending remains high - but their ability to consistently offer better market prices than each other is constrained by shared market dominance and the need to sustain profitability.
DraftKings' guidance: DraftKings has provided fiscal 2026 revenue guidance of $6.5–6.9 billion, reflecting continued growth expectations despite competitive pressure from FanDuel in casino markets.
FanDuel's position: FanDuel leads US sports betting revenue at 43.6% handle share across all regulated states. It operates the sole licensed sportsbook in New Hampshire and Oregon under state monopoly contracts, which inflates its state count but reflects the strength of its relationships with state lotteries.
Best sports betting sites USA (September 2026)
| Sportsbook | Handle Share | Available States | Best Feature | Rating |
|---|---|---|---|---|
| FanDuel | 43.6% | 25+ states | Market depth, live streaming | ★★★★★ |
| DraftKings | 36.4% | 25+ states | App design, same-game parlay | ★★★★★ |
| BetMGM | ~14% GGR | 20+ states | MGM Rewards, customer service | ★★★★½ |
| Caesars | ~8% GGR | 25+ states | Caesars Rewards, phone support | ★★★★½ |
| bet365 | Growing | NJ, CO, IA, VA, others | In-play depth, early payout | ★★★★½ |
| Fanatics | Growing | 20+ states | FanCash merchandise rewards | ★★★★ |
| ESPN Bet/theScore | ~3% GGR | 20+ states | Penn National rebrand; rebuilding | ★★★½ |
| BetRivers | ~2% GGR | 18+ states | iRush Rewards; casino-focused | ★★★½ |
21+ in most states (18+ in some). Must be physically located in a licensed state. T&Cs apply. Gambling problem? Call 1-800-GAMBLER.
The 2026 events that reshaped sports betting
The Illinois surcharge controversy
Illinois introduced a graduated sports betting tax structure with rates up to 40% at the highest revenue bracket - among the most aggressive in the US. FanDuel responded by announcing a bettor surcharge: a percentage added to the cost of each bet to offset the operator's increased tax liability. DraftKings followed. The surcharge is a first in US sports betting - an operator passing tax costs directly to bettors rather than absorbing them in reduced margin. If adopted as a template in other high-tax states, it changes the economics of US sports betting for bettors in those markets.
ESPN bet becomes theScore bet
Penn Entertainment terminated its ESPN branding partnership in November 2025 after the sponsorship failed to translate into meaningful market share gains. ESPN Bet never cracked the top five in any state by handle. The rebrand to theScore Bet - the Canadian sports media brand Penn acquired in 2021 - took effect in early 2026. ESPN, meanwhile, announced a content partnership with DraftKings focused on odds integrations and DraftKings-branded programming, including a reworked ESPN Bet Live show.
DraftKings reclaims handle lead
DraftKings reclaimed the US sports betting handle crown from FanDuel in May 2025 and has maintained it. As of March 2026, DraftKings leads with 35.8% to FanDuel's 32.0% by handle. The gap of 3.8 percentage points has remained fairly stable. Note the distinction: DraftKings leads on handle (total dollars wagered) while FanDuel leads on revenue (net after paying out winnings). The differential reflects FanDuel's historically stronger hold rate - FanDuel retains more of each dollar wagered, suggesting better price management or market mix.
Fanatics' rapid ascent
Fanatics Sportsbook entered the US market with aggressive promotional spending and the FanCash integration. Its growth trajectory mirrors its casino performance - rapid user acquisition through merchandise-linked incentives. Fanatics is now consistently ranked in the top five by handle in states where it is licensed.
How US sportsbooks make money: the honest economics
Every bettor should understand this before placing a single wager. US sportsbooks do not win because they pick outcomes better than bettors do. They win because of the vig - also called the juice or margin - built into every market price.
The -110 standard line
The standard US sports betting price for a point spread or totals bet is -110: you risk $110 to win $100. Both sides of most spread and totals bets are priced at -110.
The mathematics: At -110, the implied probability of winning is 52.4% (calculated as 110/(110+100) = 52.38%). If both sides of a market are priced at -110, the sum of implied probabilities is 104.76%. The excess 4.76% is the sportsbook's built-in margin - approximately $4.55 of expected profit per $100 wagered on each side.
Why this matters: You need to win approximately 52.4% of -110 bets just to break even. Winning more than 52.4% of the time consistently is what professional sports bettors do - and the reason most sportsbooks will restrict their accounts.
Market differences by operator
Not all sportsbooks price all markets identically. The most significant pricing variations:
Moneylines on major sports: FanDuel and DraftKings are generally most competitive on NFL, NBA, and major league moneylines - the markets with the highest handle volume and the tightest competition for bettor attention.
Alternate lines and props: More variation here. Player props are typically priced with wider margins than game spreads. Same-game parlays - which DraftKings pioneered and popularised - carry higher combined margins than the component legs would suggest because correlation between events within a single game is not fully priced in by operators.
Player-friendly pricing exists: BetRivers and bet365 are consistently cited in independent pricing analysis as offering better-than-average prices on certain sports and market types. Shopping lines across multiple operators - holding accounts at two or three sportsbooks - is the most consistently effective edge available to recreational bettors.
The overround by operator (NFL spread markets)
| Operator | Typical Overround (NFL Spreads) |
|---|---|
| bet365 | ~3.5–4.5% |
| FanDuel | ~4–5% |
| DraftKings | ~4–5% |
| BetMGM | ~5–6% |
| Caesars | ~5–6% |
| ESPN Bet | ~5–7% |
The difference between a 3.5% and 6% overround compounds over time. A bettor placing 500 wagers per year at $110 per bet at 6% margin loses approximately $3,300 per year to margin alone. At 3.5% margin: $1,925 per year. The lower-margin operator saves approximately $1,375 annually at this volume.
Welcome offers: what they're actually worth
This is where US sportsbook marketing and player reality diverge most dramatically.
Bet-and-get offers
The most common structure in 2026: "Bet $5, Get $150 in Bonus Bets" or similar. The mechanics:
- Deposit the required minimum amount
- Place one qualifying wager (any amount, any market)
- Receive bonus bets regardless of whether the qualifying bet wins or loses
- Bonus bets must be wagered once; any winnings from bonus bets are paid as cash
- Bonus bets typically expire in 7–14 days if unused
The real value: If you receive $150 in bonus bets and use them all on standard -110 markets, the expected return on the bonus bets themselves is approximately $150 × (100/210) = approximately $71. The bonus bet structure pays out only the winnings, not the stake - so a $50 bonus bet on a -110 line that wins returns $45.45 (the profit), not $95.45 (profit + stake).
Effective value of a $150 bonus bet offer: Approximately $71 in expected real-money value, not $150. Still genuinely valuable - but approximately half the headline figure.
First-bet-back offers
Less common but simpler: deposit, place one first bet up to a maximum amount, receive that amount back as bonus bets if the first bet loses. BetMGM offers up to $1,500 back as a first-bet insurance. The expected value of this structure is easier to calculate: if the market is -110 and you bet $100, you win 47.6% of the time (net +$90.90) and lose 52.4% of the time (net +$100 in bonus bets, worth approximately $47). Expected value = 0.476 × $90.90 + 0.524 × $47 ≈ $43.27 + $24.63 = approximately $67.90 on a $100 first bet insurance offer.
No bonus betting
Some bettors - particularly those serious about long-term performance - avoid claiming bonuses entirely. Bonuses create behavioural obligations (meeting wagering requirements, using bonus bets by expiration) that can distort betting decisions. A bettor who would not otherwise wager on a particular market but does so to use an expiring bonus bet is making a decision driven by promotional mechanics rather than betting judgement.
2026 Tax obligations for US sports bettors
The tax section that every sportsbook page omits. For many regular bettors, this is the most financially significant section on this page.
Federal income tax
All sports betting winnings are ordinary income at the federal level. There is no gambling exception.
W-2G reporting: A sportsbook is required to issue a W-2G form when a single bet wins $600 or more AND the payout is at least 300x the wager. For a $100 bet, the 300:1 threshold means winning $30,000+ on a single bet. Most standard bets do not trigger W-2G. The W-2G threshold is event-specific - it is not an annual aggregate.
But all winnings are still taxable: The absence of a W-2G does not mean winnings are not taxable. You are legally obligated to report all gambling winnings as income on your federal return regardless of whether a W-2G is issued. The IRS does not require a form to know income exists.
The 2026 OBBBA loss deduction
Effective January 1, 2026, the One Big Beautiful Bill Act caps gambling loss deductions at 90% of winnings - down from the previous 100% cap.
The phantom income problem for sports bettors:
A bettor who wagers $50,000 on sports throughout 2026, wins $52,000, and loses $50,000 has a net profit of $2,000. Under the previous rules: deduct $50,000 losses against $52,000 winnings = $2,000 net taxable income. Under 2026 OBBBA: deduct only $45,000 (90% × $50,000) against $52,000 winnings = $7,000 taxable income. Tax at 22% federal rate: $1,540 on $2,000 of actual profit.
A bettor who loses overall - wins $30,000, loses $35,000 for a $5,000 net loss - now faces: $30,000 gross winnings minus $27,000 (90% × $30,000) = $3,000 phantom taxable income. Tax on a net gambling loss is now possible.
Record-keeping is mandatory: Maintain a session-by-session log of every wager - date, operator, sport, bet type, amount, outcome. This is the only way to substantiate loss deductions. Sportsbooks provide account transaction histories that can serve as documentation, but these reports are not always available indefinitely - download them regularly.
New York's 51% tax rate: what it means for players
New York imposes a 51% GGR tax on online sports betting operators - the highest in the US, matched only by Rhode Island and the top bracket of Illinois and Vermont. In 2025, New York collected nearly $1.3 billion in sports betting tax revenue from operators.
This tax does not affect players directly - it is paid by operators on their net revenue. But it does affect the market in two ways: operators cannot offer as generous promotions in NY as in lower-tax states, and NY operators face structural pressure on profitability that limits their competitive behaviour on pricing.
Responsible gambling in sports betting
Sports betting carries specific responsible gambling risks distinct from casino gambling. Research consistently identifies in-play (live) betting as the highest-risk betting format - the combination of real-time events, rapidly changing odds, and the emotional intensity of watching a game in progress creates conditions for faster, more impulsive wagering.
The surcharge problem from a responsible gambling perspective: The Illinois bettor surcharge - where FanDuel and DraftKings added a fee to each wager to offset state taxes - has prompted concern from responsible gambling advocates. The surcharge makes problem gambling more expensive while not affecting recreational bettors' disposable income in a meaningful way. It is a regressive feature of the Illinois tax policy.
Tools available at all licensed US sportsbooks
All licensed US sportsbooks are required by state gaming authorities to provide:
- Deposit limits (daily, weekly, monthly)
- Loss limits
- Wagering limits
- Session time limits
- Reality check prompts
- Cooling-off periods
- Self-exclusion
Self-exclusion by state: Each state operates its own self-exclusion programme. A self-exclusion in New Jersey does not automatically cover New York. Players who bet across multiple licensed states should register with each state's self-exclusion programme separately if they want comprehensive coverage.
The account restriction reality
US sportsbooks are legally permitted to restrict or close the accounts of successful bettors at their commercial discretion. This practice is widespread - FanDuel, DraftKings, BetMGM, and Caesars all limit stakes or close accounts of bettors whose performance suggests sharp, positive-expected-value betting.
This is a material risk for successful recreational bettors who become too good. The standard advice: spread action across multiple operators, avoid patterns that flag as sharps (consistently betting certain markets, steam moves, line shopping), and expect restrictions if you win consistently.
Bettor protection against arbitrary restrictions varies by state. New Jersey's Division of Gaming Enforcement is the most active in investigating bettor complaints about restrictions. Most other states offer limited recourse.
Frequently asked questions
Which sportsbook has the best odds in the US?
Independent pricing analysis consistently identifies bet365 and BetRivers as offering the most competitive prices on certain markets. For NFL spreads specifically, the major operators cluster within 0.5–1% of overround - the differences are real but not dramatic over a recreational betting volume. Shopping across two or three operators is more valuable than picking one.
What is the best sports betting app in the US?
DraftKings has the highest App Store and Google Play ratings of any US sportsbook by sustained average. FanDuel is the close second. CBS Sports rates DraftKings slightly ahead for market variety and depth; FanDuel slightly ahead for cash-out functionality and Google Play ratings as of September 2026.
Do i pay tax on sports betting winnings?
Yes. All sports betting winnings are ordinary income at the federal level. Under the 2026 OBBBA, you can deduct only 90% of gambling losses against winnings - meaning a player who breaks even or loses can still owe federal tax on phantom income. State taxes also apply in states that tax gambling winnings.
Is sports betting legal in Texas?
Not yet. Texas does not have legal sports betting as of September 2026. Las Vegas Sands is actively lobbying for Texas gambling expansion. The most realistic timeline for Texas is 2027 legislative session, though passage is not certain.
What happened to ESPN bet?
Penn Entertainment terminated its ESPN branding partnership in November 2025 after ESPN Bet failed to achieve competitive market share. The platform rebranded to theScore Bet in early 2026. ESPN announced a separate content partnership with DraftKings for odds integrations and casino programming.
How does the Illinois sports betting surcharge work?
Following Illinois' introduction of a graduated GGR tax structure with rates up to 40%, FanDuel and DraftKings began adding a percentage surcharge to each bettor's wagers to offset the increased tax liability. The surcharge passes the operator's marginal tax cost directly to bettors. It is a first in US sports betting and faces ongoing regulatory and political scrutiny.
What is the FanDuel and DraftKings duopoly in US sports betting?
FanDuel (43.6% of US online handle) and DraftKings (36.4%) together control approximately 80% of all US regulated online sports betting activity. The combined share, while declining slightly from historical highs near 75%, represents a duopoly that constrains the competitive pricing behaviour that would benefit bettors if more operators competed equally.
21+ in most states (verify age requirement in your state). Must be physically located in a licensed state. Sports betting winnings are taxable income - consult a tax professional. Gambling problem? Call 1-800-GAMBLER (1-800-426-2537) - free, confidential, 24/7. Information correct as of September 2026.
State spotlight: Missouri (launched December 2025)
Missouri became the 32nd state with legal online sports betting on December 1, 2025 - and collected just $521,000 in tax from $543 million wagered in the launch month. Read the full breakdown of the promotional-deduction loophole, all 8 licensed operators, and why Missouri has no online casino in our Missouri Sports Betting guide.