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A gambling industry split over online casinos slows iGaming as mobile revenue leaders push to expand while regional operators fight to protect brick-and-mortar casinos.
American gaming stakeholders have for years largely agreed online betting will shape the industry’s future. The structure of that mobile gambling future is far more divisive.
Key takeaways
- The U.S. gaming industry is deeply divided over real-money online casino gaming, with digital giants like FanDuel and DraftKings supporting expansion and many regional operators opposing it.
- Opponents, including Cordish and Churchill Downs, argue iGaming could harm brick-and-mortar casinos, jobs, and local economies, while supporters say it can help curb unregulated gambling and increase state revenue.
- This internal division stalled legislative progress, preventing iGaming from gaining the broad support that helped legalize sports betting in dozens of states.
Current, former and potential online gambling entities are strongly divided about which types of games should be allowed. Disparate factions have formed trade groups, hired lobbyists and tried to shape public opinion around real money slots and table games played on phones and laptops.
The lines, not surprisingly, are predominantly based on each stakeholder’s financial interests. How these competing interests’ existence plays out in statehouses and courthouses in the U.S. will determine the allocation of hundreds of billions in potential gambling dollars for years to come.
US iGaming background
U.S. jurisdictions could legalize real money online casino gaming before the 2018 Supreme Court decision that overturned the federal sports betting ban. 39 states since legalized sports betting or approved laws to do so. Seven allow real money casinos, and only four states launched iGaming following the Court’s sports betting decision.
Sports wagering quickly gained bipartisan support in statehouses nationwide. Real money online casino gaming, which critics decried as a “slot machine in every pocket,” sparked greater problem gambling fears and is far less politically palatable among both Republicans and Democrats.
The industry itself is also divided.
The COVID-19 pandemic onset in 2020 and shutdown of practically all the nation’s 1,000 brick-and-mortar casinos reinvigorated gaming operators’ efforts to reach an increasingly digital customer base. The U.S.’ largest retail gaming companies including BetMGM, Caesars, Wynn, Churchill Downs and PENN National (now PENN Entertainment) all invested hundreds of millions in newly legalized online sportsbooks, as well as digital slots and table games.
In the years following the pandemic, two digital operators cemented themselves as the clear leaders in American online gaming.
DraftKings, publicly traded in late 2020, and FanDuel, acquired by European gaming giant Flutter Entertainment in 2018, now take in roughly three-fourths of all U.S. digital iGaming and sports betting money. The two daily fantasy sports pioneers emerged from a crowded field of more established gaming companies largely due to existing online-based customers and industry-leading sportsbook offers, most notably same-game parlays.
Though parlays helped sportsbooks nearly double their profit margins since 2018, online casino games still generate roughly 2.5 times as much operator revenue as sportsbooks in states where both game types are legal.
Since DraftKings and FanDuel cemented a de facto digital duopoly by 2023, the gaming industry became increasingly fragmented about its online future.
The digital operator pair, as expected, loudly championed real money iGaming bills in more than two dozen statehouses. Caesars and BetMGM typically joined them, investing billions into their online platforms and tout iGaming as a significant future revenue driver.
They’ve argued these for-cash games are readily available via unregulated offshore sites, as well as hundreds of free-to-play and “freemium” social and slots casinos. These offshore and unregulated platforms don’t offer player protections, real money iGaming proponents argue, and don’t pay state and federal taxes on their profits.
Opposition remains
Opposition from within the industry is most prominently from smaller regional operators that pivoted away from iGaming.
Cordish Companies, which operates around a dozen brick-and-mortar casinos, and Churchill Downs, owner of many of the country’s best-known horse tracks and hybrid “racinos”, are among the most notable names in a trade group of more than a dozen regional casino operators working to stop real money casino gaming expansion. Along with problem gambling, the National Association Against iGaming (NAAIG) argued digital gaming will hurt existing brick-and-mortars, threatening job opportunities and local economies.
It’s important to correct a common misconception raised today at @NCLGS during a panel: not all forms of online wagering are the same. Equating regulated pari-mutuel horse racing with 24/7 casino-style iGaming misrepresents both the law and the lived experience of gambling harm.…
— NAAIG_Official (@NAAIG_Official) July 11, 2025
Cannibalization, or how much money is lost from in-person gaming to digital offerings, has been one of the industry’s largest sticking points. Supporters and opponents use corporate-commissioned studies, executive testimonies, financial reports and anecdotal evidence to argue their case.
Wynn, the third-largest casino operator on the Las Vegas Strip and a former online gaming and sportsbook company, hasn’t taken a public corporate stance on legal iGaming. Penn, which operates the U.S.’ largest portfolio of regional casinos, supported iGaming in jurisdictions such as its home state of Pennsylvania but opposed expansion in some other markets.
What’s clear is that digital-focused or digital-only operators have far less to lose by a decrease in brick-and-mortar gambling revenues.
Divide has worked in opponents’ favor
What’s also clear is the divide is benefiting opponents.
Without widespread gambling industry support, commonplace during sports betting legalization discussions, it’s far harder to build momentum for regulated iCasinos. Companies such as Cordish (which operates an iCasino in Pennsylvania) and Churchill (which runs a digital racebook in most states) have nevertheless helped thwart iGaming expansion.
Proponents maintain the thousands of unregulated digital casinos indicate consumer demand and that states should take steps to protect players and generate tax dollars like they did with black market sports betting. With states facing greater economic uncertainty, advocates also say these high-revenue-generating online slots and table games are a much-needed boost to state tax coffers.
Those arguments were largely unsuccessful before lawmakers in recent years. It remains to be seen how iGaming will be received in 2026 when most state legislatures begin their respective sessions.
In the meantime, it’s clear major digital operators and smaller brick-and-mortar companies remain divided on the issue.
