The US gaming sector entered 2026 with steady momentum, supported by continued growth in core business activity and a generally positive outlook among industry leaders. At the same time, concerns around prediction markets and shifting regulatory dynamics have moved closer to the center of strategic discussions, according to the latest industry survey.

Data from the American Gaming Association’s Spring 2026 Gaming Industry Outlook [pdf] shows that economic activity across the casino sector continued to expand during the first quarter. The report, based on responses collected between late March and early April from 26 senior executives, points to sustained gains in revenue, investment plans, and operational performance.

Growth Continues Across Key Metrics

The industry’s Gaming Conditions Index, which measures factors such as revenue, employment, wages, and sentiment, increased by 1.5% compared to the same period last year. This marked a continuation of growth seen in the prior two quarters, indicating that the sector remains on an upward trajectory even after adjusting for inflation.

Executive sentiment reached its highest level since the third quarter of 2022, with a net positive reading of 21.4%. Current business conditions also improved slightly, with 24% of respondents describing them as good and 64% as neutral.

Forward-looking expectations remained favorable, although slightly softer than previous readings. Around 29% of executives anticipate improved conditions over the next six to twelve months. More than 60% expect gains in revenue, capital investment, and overall financial health during that period.

Bill Miller, president and CEO of the American Gaming Association, said: “Operators are focused on investing in innovation and delivering world-class entertainment, while also navigating an evolving competitive and regulatory landscape.”

Capital investment remains a central theme in the outlook. Approximately 62% of executives indicated plans to increase spending, reflecting continued confidence in long-term growth opportunities. Among gaming equipment suppliers, expectations for investment reached particularly high levels, with an 80% net positive reading for future capital deployment.

Revenue trends also showed strength, with both revenue growth and balance sheet health recording net positive readings of 56%. Customer activity metrics followed a similar pattern, although at lower levels, suggesting steady but measured engagement growth.

Despite this positive outlook, companies continue to face cost-related pressures. Hiring expectations have remained negative for seven consecutive survey periods, with executives signaling caution around workforce expansion. Wage expenses remain the most frequently cited concern, identified by 54% of respondents as a key pressure point.

Other factors affecting operating costs include tax and regulatory changes, insurance expenses, and data protection requirements. Each of these was cited by 42% of executives, highlighting a broad range of financial considerations impacting the sector.

Promotional spending is expected to decline, with a net negative reading of 31%. This indicates a shift toward tighter control of margins, with operators placing less emphasis on aggressive marketing incentives.

Prediction Markets Draw Industry Focus

While the broader business outlook remains positive, the growing presence of prediction markets has emerged as a major concern. According to the report (pdf), 81% of executives view these platforms as a very significant threat to the regulated gaming industry.

Miller addressed this issue directly, stating: “Illegal sports betting through sports event contracts is increasingly encroaching on legal, state-and tribal-regulated operators. It’s clear the legal, regulated industry views this is a threat, and will continue to fight back and protect the integrity of our industry.”

Executives highlighted several concerns tied to these platforms, including their regulatory positioning and potential expansion into traditional gaming markets. Some described prediction markets as “Unregulated and untaxed competition,” while others pointed to the “Threat of further expansion into gaming markets” and a possible “Impact industry credibility.”

The issue has gained attention due to the way certain platforms operate under financial market frameworks rather than traditional gambling regulations. This allows them to offer products in jurisdictions where sportsbooks face stricter rules and tax requirements.

Industry participants remain divided on the long-term impact. Some believe prediction markets could develop into a separate segment, while others argue they may disrupt existing sportsbook models if regulatory gaps persist.

Regulation continues to play a significant role in shaping the outlook. Federal regulatory concerns were cited by 46% of executives, a noticeable increase from previous survey periods. State-level regulatory issues were mentioned by 42%, alongside rising competition from alternative gaming formats.

Economic uncertainty remains the most widely cited constraint, with 62% of respondents pointing to geopolitical risks and broader market conditions. The report links these concerns to inflation, tariffs, and supply chain challenges, all of which have affected both operating costs and consumer spending patterns.

Despite these pressures, the overall outlook suggests the industry is positioned for continued expansion, supported by investment and steady demand. At the same time, new forms of competition and evolving regulatory frameworks are expected to influence strategic decisions throughout the year.