North American iGaming Is Outpacing Online Sports Betting as Prediction Markets Squeeze Sportsbooks

The North American digital gaming sector is showing a clear split between iGaming operators and online sportsbooks, with iGaming-centric companies dramatically outperforming in Q1 2026 while traditional sports betting operators face guidance reductions driven partly by prediction market competition. That is the finding of a May 18 investor note from Macquarie Equity Research analyst Chad Beynon, who reviewed quarterly results across the sector and concluded that the structural advantage currently favors operators with a strong online casino core.

Rush Street Interactive, the operator of the BetRivers brand, was the most striking example of the iGaming advantage. The company reported record Q1 revenue of $370.4 million, up 41 percent year over year, with North American online casino monthly active users growing 62 percent in the quarter. Net income hit $26.2 million, a 134 percent increase year over year. RSI raised its full-year 2026 revenue guidance to $1.49 billion to $1.54 billion and lifted adjusted EBITDA guidance to $230 million to $250 million. Its stock surged roughly 22 percent on the results.

The Divergence With Sportsbooks

While iGaming operators exceeded expectations by as much as 25 percent in EBITDA terms, sportsbook-heavy operators had a different story. DraftKings beat Q1 revenue guidance, coming in at $168 million against a $153 million projection, but trimmed full-year EBITDA guidance. Flutter Entertainment, the parent company of FanDuel, delivered $631 million in Q1 revenue against a $611 million estimate, also a beat, but similarly reduced longer-term projections. Macquarie attributed the gap partly to the disruption that DraftKings and other sportsbooks face from prediction market platforms.

Kalshi, Polymarket, and the prediction market products that DraftKings and FanDuel themselves have launched are creating a fragmented sports wagering marketplace where traditional sportsbooks no longer have a monopoly on the digital bettor’s attention. That competitive disruption appears to be suppressing sports betting growth in ways that do not affect online casino operators, whose product set has no prediction market equivalent.

What This Means for the Market

The Macquarie findings arrive at a moment when the iGaming expansion thesis is being tested in a growing number of states. Currently, only a handful of states have legal online casino gaming, and the addressable market is far smaller than the sports betting market. But in states where both are available, the per-player economics of iGaming are significantly stronger than sports betting. RSI’s average revenue per monthly active user in the United States and Canada was $317 in Q1 2026, compared to $54 in Latin American markets, underscoring how valuable regulated iGaming players are compared to other segments. The Macquarie analysis suggests that as the competitive disruption from prediction markets continues, the iGaming-first operators are well positioned to extend their relative advantage.