Second Straight Monthly Drop Hits U.S. Sports Betting Revenue in May 2026

The American Gaming Association released its latest figures showing that U.S. sports betting revenue fell 1.8 percent in May 2026 to 1.34 billion dollars, while the total handle slipped 0.4 percent to 12.06 billion dollars, and this marked the second consecutive month of contraction across the regulated market.

Observers note that the decline occurred because both the handle and the hold percentage moved lower at the same time, which reduced the overall revenue operators collected from bettors nationwide, and state tax collections from these activities dropped 2.4 percent as a direct result of the smaller revenue base.

Breakdown of the May Numbers

Data from the report details how the handle, defined as the total amount wagered, reached 12.06 billion dollars yet still posted that modest 0.4 percent decrease compared with the prior month, while the resulting revenue of 1.34 billion dollars reflected an even steeper 1.8 percent contraction that continued the downward trend observed in April.

Those who track monthly performance point out that when handle and hold percentage both decline together the revenue impact compounds quickly, and this combination produced the second straight month of lower totals after a period of steadier growth earlier in the year.

State Tax Revenue Follows the Same Path

State governments that rely on sports betting taxes saw collections fall 2.4 percent in May, which aligns directly with the reduced revenue reported by operators, and the figures indicate that the contraction in taxable activity spread across multiple jurisdictions that participate in the commercial market.

Analysts reviewing the tracker data observe that tax revenue moves in close step with operator revenue because most states apply percentage-based levies, so a drop in one produces a corresponding drop in the other without any change in tax rates themselves.

Unregulated Prediction Markets Continue Expansion

While regulated sports betting experienced its second month of contraction, unregulated prediction markets such as Kalshi recorded continued rapid growth outside the licensed channels, and this contrast highlights how some betting activity shifts toward platforms that operate beyond state oversight.

The report notes that these markets remain outside the commercial gaming revenue tracker, yet their expansion occurs alongside the measured decline in the regulated sector, which suggests bettors maintain overall interest even as activity in licensed sportsbooks softens.

Context for August 2026

By August 2026 the May figures stand as the most recent complete monthly data available from the American Gaming Association, and observers continue to monitor whether the two-month contraction signals a temporary pause or a longer adjustment in betting patterns across the country.

Figures released through the Commercial Gaming Revenue Tracker provide the baseline for these comparisons, allowing consistent tracking of handle, revenue, and tax collections month after month without interruption.

Conclusion

The May 2026 report from the American Gaming Association establishes that regulated U.S. sports betting revenue declined for a second straight month, driven by lower handle and hold percentage, while state tax revenue followed the same downward path and unregulated markets like Kalshi sustained their growth trajectory outside the licensed system.