Americans spent more on regulated gambling than ever before in 2025, especially online. Here’s what’s fueling that explosion, and what you can do to keep your online gambling expenses in check.
Last year, gambling in the U.S. reached heights no one’s seen before. The American Gaming Association says commercial gaming revenue hit an all-time high of $78.6 billion in 2025. That’s 9.1% more than in 2024, marking the sixth straight record-breaking year.
Online casinos are at the heart of this story, and the appeal is clear. Now, you’ll find slots, blackjack and even live dealer casino games, which is where you watch a real person dealing cards or spinning a wheel through live-stream, right on the same site. Take PlayFame, one of those sweepstakes-style social casinos: its live section sorts games into blackjack, roulette, baccarat and even game shows.
How big is the U.S. online casino market?
Revenue from regulated U.S. online casinos shot up to $10.73 billion in 2025, up 27.6% from the year before, according to the AGA’s State of the States report. That’s coming from only 7 states where real-money online casinos are legal, making up a fraction of the country.
Physical casinos still make more money in total, but online gambling is expanding much quicker. In states like Pennsylvania and New Jersey, online casino revenue overtook the brick-and-mortar casinos for the first time this past year.
Why does online casino gaming keep growing?
It mostly boils down to convenience. People can play from their phones during a lunch break. There’s no need to plan a trip to Las Vegas or Atlantic City. New games keep dropping, and the barriers to playing are lower than ever.
States have a clear incentive too. Online casinos brought in $2.6 billion in taxes in 2025, a 36.9% increase, according to CDC Gaming. That gives lawmakers a reason to keep welcoming online play.
What are live dealer casino games, and how do they change your spending?
Live dealer games are table games; think blackjack, roulette and baccarat, dealt by an actual person working in a studio, and streamed straight to your device in real time.
From a budgeting perspective, the pace really stands out. These games move slower than slots. So, the same amount of money usually lasts longer. That slower tempo means you’re a lot more likely to notice how much you’re spending, because it doesn’t just pass by in a fast game.
How do you set a gambling budget that holds up?
Treat gambling as entertainment, not a way to make money, and set a limit before you even start. Whatever you cap it at, make it an amount you’d feel fine losing, like what you’d pay for a concert or a fun night out. Here’s a simple method, say you pick $100 per month as your limit:
- First, take care of your bills, savings and any debt. Only use what’s left for entertainment.
- Break that $100 into four $25 weekly sessions.
- Decide on a stop-loss. Lose your $25 for the week? That’s it, you’re done for now.
- Have a win-stop too: if your $25 grows to $50, cash out the extra $25 and keep playing only with your original stake.
- Don’t carry over money you didn’t spend, or make up losses, from month to month.
It helps to write this rule down. Most people go overboard in the spur of the moment, so set your limits ahead of time.
Do gambling winnings and losses affect your taxes?
Yes, and the rules have become stricter. Gambling winnings count as taxable income. Starting in 2026, you can only deduct 90% of your gambling losses under the One Big Beautiful Bill Act, according to the IRS Internal Revenue Bulletin 2026-19.
Here’s how that plays out: say you win $10,000 and lose $10,000 in the same year, the deduction is capped at $9,000. So you’ll owe tax on $1,000 in winnings, even if you broke even. Only people who itemize deductions can write off losses, so make sure to keep a record of dates, sites and amounts; that’s what the IRS wants to see.
Does where you live change which online casinos you can use?
Yes. Only 7 states allow real-money online casinos. Sweepstakes-style sites face state laws that are always changing. For example, New York banned sweepstakes casinos in December 2025 after $762 million in sales the previous year, according to iGaming Business. California’s AB 831 kicked in January 1, 2026, according to LegiScan.
So, always double-check that a site is legal in your state before signing up.
FAQ
Yes. Winnings count as taxable income, and you need to itemize to deduct losses.
Only use money left after covering bills, saving and paying off debt.
Because they’re slower, tracking spending can be easier.