KEY TAKEAWAYS
CONTENTS
The short answer: sportsbooks make money from hold
A sportsbook makes money by pricing every bet so that, across many wagers, it pays out less than it takes in. The gap is called hold. In 2025, U.S. commercial sportsbooks kept 10.16% of the $166.94 billion wagered, which produced $16.96 billion of revenue, according to the American Gaming Association (AGA) Commercial Gaming Revenue Tracker for calendar year 2025.
That revenue is not profit. Promotional spending, state taxes and operating costs are all paid out of it. State-regulated sportsbooks paid $3.71 billion in taxes on their 2025 results, about 21.9% of revenue, and DraftKings, for one, reports the cost of user incentives and promotions as a reduction of its revenue.
This article explains the vig that sits inside every price, why the national hold is much higher than the margin on a single standard bet, how parlays and bet mix change the picture, and how taxes and promotions reduce what an operator keeps. All figures cover 2025 unless a different period is stated, and every metric is used as its source defines it.
Background: handle, revenue and hold
Three terms carry most of the analysis. Handle is the total amount wagered. Gross gaming revenue (GGR) is what remains after winning bets are paid; DraftKings Inc. describes its own sportsbook revenue as taking the settled handle for resolved betting markets and subtracting the payouts. Hold is GGR expressed as a percentage of handle.
Definitions are not identical everywhere. State regulators publish revenue under their own rules, and the AGA builds its tracker from those state reports. States can differ in how they treat items such as promotional credits and other deductions. Operators then publish their own measures: DraftKings, for example, defines its Sportsbook Net Revenue Margin as sportsbook revenue as a percentage of sportsbook handle, a figure that already reflects promotional reinvestment. Comparing a state hold figure with a company margin is therefore a comparison of two different definitions.
Sportsbooks are taxed on revenue, not on handle. Each state sets its own rate and its own base, so the same $100 million of wagers can leave an operator with very different amounts depending on where the bets were placed. Readers comparing markets should always check the period, the unit and the definition a source uses. New York, for example, taxes mobile sports wagering revenue at 51%, according to the New York State Gaming Commission, as of October 2026.
How the vig builds a margin into every bet
The mechanism behind hold starts with the price. Many point-spread and totals bets in the United States are quoted at -110 on both sides, meaning a bettor risks $110 to win $100. The extra $10 on the losing side is the sportsbook’s fee, usually called the vig or juice. The next example is hypothetical and is used only to show the arithmetic.
Suppose one bettor risks $110 on each side of the same game. The book collects $220 and pays $210 to the winner, which is the $100 profit plus the $110 stake. The remaining $10 is revenue, whichever side wins. The built-in margin on a balanced -110 market is therefore $10 ÷ $220, or about 4.5%.
where: vig is the amount the book keeps after paying the winner; total stakes is the money wagered on both sides.
Real books rarely see perfectly balanced action, and they do not need to. They adjust lines, limit exposure and manage risk bet by bet, so that results over a large number of wagers move toward the margin built into the prices. Short-term outcomes still swing results, which is why hold varies from month to month even when pricing is unchanged.
The 2025 numbers and the math
The AGA reported that sports betting revenue rose 22.8% in 2025 to $16.96 billion, on a total handle of $166.94 billion, up 11.0%. Nationally, hold increased by 98 basis points to 10.16%. Online sports betting accounted for 96.5% of the market. Dividing the two reported figures reproduces the AGA’s hold, which is a useful check on any hold figure quoted without its inputs.
where: GGR is sports betting revenue as reported by the states; handle is total wagers.
The same two inputs show how much of each dollar the books retained. For every $100 wagered, sportsbooks kept about $10.16 and returned about $89.84 to winning bettors. Taxes of $3.71 billion equal about $2.22 per $100 of handle, and revenue less taxes was $13.25 billion, or about 7.94% of handle, before promotions not already deducted and before any operating costs.
Growth rates reveal where the increase came from. Working back from the reported growth, 2024 revenue was about $13.81 billion on about $150.39 billion of handle, a hold near 9.18%. Handle grew 11.0%, hold grew about 10.7% in relative terms, and the two together produced the 22.8% revenue gain. Revenue growth in 2025 therefore had two sources of similar size: more dollars wagered, and more kept from each dollar.
where: handle growth is 11.0%; relative hold growth is 10.16% ÷ 9.18% − 1; the small gap to the reported 22.8% reflects rounding in the inputs.
What the economics mean for operators
A margin near 4.5% on a single balanced bet and a national hold above 10% cannot both come from simple spread betting. The difference points to bet mix. DraftKings’ 2025 annual report notes that hold percentage may be affected by factors such as the mix of games played, and the company’s 2023 investor presentation attributed part of its sportsbook hold gains to a higher average leg count and to more accurate pricing. Multi-leg wagers and same-game parlays carry higher theoretical margins than single bets because the margin on each leg compounds.
Reported margin also depends on promotions. DraftKings’ sportsbook revenue of about $3.83 billion on $53.55 billion of handle in 2025 gave a Sportsbook Net Revenue Margin of 7.1%, up from 6.0% in 2024. The company attributes the increase to a better hold percentage and improved promotional reinvestment. That is the company’s own explanation and one company’s result, not an industry average.
For operators, revenue per dollar wagered is shaped by three levers at once: prices and product mix, promotional cost, and the tax rate where the bet is placed. Any one can move results without a change in handle. This is analysis of reported figures, not investment advice.
Sportsbooks compared with other verticals
Sports betting is one of three verticals the AGA tracks. In 2025 it was the second-largest of the three in revenue, behind traditional gaming, and it grew far faster than traditional casino gaming, while its tax share of revenue was close to that of the others. The table uses the AGA’s reported revenue and tax totals, and the tax shares are calculated from them.
U.S. commercial gaming, calendar year 2025. Source: American Gaming Association. Tax share = taxes ÷ revenue, calculated.
| Vertical | Revenue | Revenue growth | State taxes | Taxes as % of revenue |
|---|---|---|---|---|
| Traditional gaming | $50.94B | +2.3% | $11.33B | 22.2% |
| Sports betting | $16.96B | +22.8% | $3.71B | 21.9% |
| iGaming | $10.74B | +27.6% | $2.59B | 24.1% |
| Total commercial gaming | $78.72B | +9.2% | $18.09B | 23.0% |
The averages hide large differences by state. The national figure of 21.9% blends states with much lower rates and states, such as New York, at 51%. The blended tax share also shifts as the mix of states changes, so it should not be applied to any single operator or market. Over time, rising shares of online revenue and changes in state rates will move the blended figure even if no single state changes its rules.
Risks, limits and misreadings
Hold is an outcome, not a price. Because results depend on what happens in games, a single month or quarter can sit well above or below an operator’s expected level. DraftKings states in its annual report that actual win rates may differ from its theoretical rates and could have a negative effect on results. A high or low hold in one period is not evidence of a lasting change.
The AGA tracker covers commercial operations only. The AGA’s companion State of the States report notes that its sports betting total does not include revenue earned by sportsbooks in tribal casinos or mobile sports betting in Florida, which is conducted as a form of tribal gaming. Rules and reporting vary by state, so the national hold is a blend of different definitions rather than one uniform measure.
Finally, revenue and profit are different things. Taxes, promotions, marketing, data and technology costs and compliance all sit between revenue and earnings, and this article does not estimate any of them for the industry.
Key figures and definitions
Key figures for U.S. sports betting, calendar year 2025, with sources.
| Metric | Value | Definition or note | Source |
|---|---|---|---|
| Handle | $166.94B (+11.0%) | Total wagers | AGA |
| Revenue (GGR) | $16.96B (+22.8%) | As reported by states | AGA |
| Hold | 10.16% (+98 bps) | Revenue ÷ handle | AGA |
| State taxes | $3.71B (+32.4%) | Taxes paid by sportsbooks | AGA |
| DraftKings net revenue margin | 7.1% (6.0% in 2024) | Company definition: sportsbook revenue ÷ handle | DraftKings 10-K |
A basis point is one hundredth of a percentage point, so 98 basis points equal 0.98 percentage points. Moving from 9.18% to 10.16% is a gain of 0.98 percentage points, or about 10.7% in relative terms. Percentage points and percent are not interchangeable, and mixing them is a common source of error when hold figures are discussed. Handle, revenue and hold are used here as the AGA reports them; the DraftKings margin uses the company’s own definition and is not directly comparable.
What to read next
This article covers the mechanics of sportsbook revenue. The natural next steps in WagerBiz’s coverage are the other half of the equation, how state taxes shape what operators keep, and the other verticals, such as how online casinos and land-based casinos earn their revenue. After that come company-level analysis of how specific operators combine these levers, and market-level analysis of how individual states compare. Reading company results with this framework helps separate changes in handle, hold and promotions, and it makes earnings releases easier to interpret. Links to related WagerBiz analysis will appear here as those articles are published, and readers who want the primary data can start with the AGA tracker and the regulator reports listed below.
Frequently Asked Questions
Sources & References
- American Gaming Association — Commercial Gaming Revenue Hits $78.7 Billion in 2025 (press release, Feb. 26, 2026)
- American Gaming Association — Commercial Gaming Revenue Tracker, CY 2025
- DraftKings Inc. — Form 10-K for the fiscal year ended Dec. 31, 2025 (SEC EDGAR)
- DraftKings Inc. — 2023 Investor Day presentation (SEC EDGAR)
- American Gaming Association — State of the States 2026
- New York State Gaming Commission — Sports Wagering: taxes and revenue
