US Gaming Industry Leaders Bet on Growth as Prediction Markets Raise Alarms
The US gaming industry is experiencing a surge in executive confidence, reaching its strongest level since late 2022 as leaders anticipate sustained revenue growth and expanded investment opportunities, according to The American Gaming Association’s latest survey.
Source: RG.org. The Gaming Conditions Index climbed 1.5% year-over-year in Q1 2026, with more than 60% of respondents expecting improvements in business conditions, revenue, and capital spending moving forward. However, this optimism faces a significant challenge, as 81% of executives identified prediction markets as a major threat to regulated gaming operators. Moreover, roughly 62% of respondents said they expect capital investment to increase over the next year as companies continue expanding offerings and improving customer experiences.
Gaming Industry Confidence Reaches Highest Level Since 2022
Executive sentiment across the US gaming industry rose to 21.4% net positive in Q1 2026, marking the strongest outlook since Q3 2022. The Gaming Conditions Index, which measures real economic activity across gaming revenue, employment, wages, executive sentiment, and casino hotel event activity, reflects sustained momentum throughout the sector. This expansion continues a positive trend observed over the previous two quarters, driven primarily by improved executive sentiment and normalized readings across other performance indicators.
When surveyed about their future business situation, 29% of executives anticipated improvement while 21% expected deterioration, resulting in an 8% net positive outlook. While this represents a decline from the 26% net positive reported in Q3 2025, conditions remain favorable across multiple metrics. Sentiment proved particularly strong around expected revenue growth, with executives reporting 56% net positive expectations, matched by identical projections for overall balance sheet health. Customer activity expectations reached 32% net positive, indicating sustained confidence in consumer demand.
Promotional activity is expected to decline for the second consecutive survey period. The legal state- and tribal-regulated gaming industry continues to demonstrate resilience and adaptability in a dynamic economic environment, according to American Gaming Association President and Chief Executive Bill Miller.
Prediction Markets Emerge as Major Threat to Traditional Gaming Operators
Prediction market platforms offering sports event contracts in nearly every state pose what 81% of surveyed executives described as a “very significant” threat to regulated gaming operators. Kalshi and Polymarket lead this emerging sector, which began offering sports contracts in early 2025 and has since evolved into sportsbook-like markets featuring spreads, totals, and moneyline offerings across the NFL, NBA, MLB, NHL, and NCAA.
“Illegal sports betting through sports event contracts is increasingly encroaching on legal, state- and tribal-regulated operators,” Miller stated. The scale of this threat became evident during Super Bowl 60, when Nevada sportsbooks recorded approximately $133.80 million in wagers while Kalshi users traded more than $1 billion in Super Bowl-related contracts, representing a 2,700% increase from the prior year.
More than a dozen states are engaged in legal battles against trading exchanges, with tribal gaming leaders voicing strong opposition. In December 2025, Arizona became the first state to revoke a fantasy sports license due to a partnership with a prediction market provider.
FanDuel, DraftKings, and Fanatics departed the AGA after launching prediction market platforms, though they avoid operating event contracts in jurisdictions where they hold legal sportsbook licenses. Prediction markets operate under federal Commodity Futures Trading Commission oversight, while sports betting faces state-level regulation.
US Gaming Industry Leaders Plan $300M+ in Capital Investments
Capital investment plans among US gaming industry leaders reflect sustained commitment to growth, with 62% of respondents indicating increased spending over the next six to 12 months. Correspondingly, gaming equipment suppliers registered their strongest capital investment expectations since survey inception, reaching 55% net positive sentiment.
Hotel and food and beverage facilities emerged as the primary targets for capital allocation, though at lower shares than reported in Q3 2025. The implementation of AI technology adds another dimension to investment strategies, as 50% of executives anticipate cost savings within the next six to 12 months.
Bill Miller, AGA President and CEO, emphasized that operators remain focused on investing in innovation and delivering world-class entertainment while navigating an evolving competitive and regulatory landscape. Companies continue expanding offerings and improving customer experiences through these capital deployments.
In contrast to aggressive spending plans, expectations around hiring pace and wage growth remain muted. Executive near-term outlook reached record highs across several business areas, with revenue expectations at 56% net positive and balance sheet health matching that level. Customer activity projections stood at 32% net positive.
