The Number That Isn't Yours

Three US gambling figures, $3 billion, $32 billion and $63 billion, were published at different times for different purposes. The US commercial sports betting and iGaming market grew sharply over that period, but growth is only part of the explanation. For suppliers, the commercial question is how to bridge operator market size to the revenue pool their product can actually address.

Playtech's investor site puts the US total addressable market at $32 billion across iGaming, online sports and platform services. The footnote is precise about what that is: a market size based on 2025 gross gaming revenue estimates, from a third-party market data provider.

Flutter, an operator rather than a supplier, published a different US number. At its September 2024 investor day it set out a North American mature market of approximately $70 billion, of which the US was forecast at around $63 billion and Canada at $7 billion, described as 1.5 times its previous estimate and built from internal projections for states expected to regulate by 2030.

And Playtech has published a third figure, its own. In its H1 2022 results presentation the company put the total US B2B opportunity, excluding structured agreements, at around $3 billion.

These are not three estimates of the same market taken at different points in time. They sit at different layers of the value chain. Playtech's $3 billion figure was a 2022 supplier-side B2B opportunity excluding structured agreements. Its current $32 billion figure is a market-size estimate based on 2025 gross gaming revenue across iGaming, online sports and platform services. Flutter's $63 billion figure is a projection of the US consumer market at maturity. Comparing the three without adjusting for both date and scope would be wrong.

The date effect is material. The American Gaming Association reported combined sports betting and iGaming revenue of approximately $12.5 billion in 2022 and $27.7 billion in 2025. That tells a supplier that the US commercial sports betting and iGaming revenue pool expanded quickly. It does not tell the supplier how much of that growth became addressable supplier revenue. To get there, the supplier still has to bridge from operator activity to the part of the stack its product can serve, then account for in-house capability, tax and promotional deductions where relevant, and its own commercial model. The useful question is therefore not which headline number is right, but what bridge turns it into a supplier-addressable number.

That bridge is the subject of this article. A market-size figure can be a useful input for territory planning, hiring or investor analysis, but it is not a supplier revenue forecast on its own. The industry's disclosures show why: the denominator changes again when market size becomes reported revenue, contractual NGR, a tax base or a supplier fee pool.

The same problem recurs at every layer. It runs from an operator's market estimate into a supplier's investor page, from one definition of net revenue into a contract written on the assumption of another, and from a regulator's choice of tax base into every forecast built on the figures it publishes.

From market size to supplier opportunity

Flutter's model is demand-side, centred on expected market coverage and a mature-market TAM. The company reiterated expectations of 80 percent sportsbook and 25 percent iGaming population coverage, and described the TAM figures as internal estimates for states expected to regulate by 2030. That answers Flutter's question, which is how large its consumer market could become.

A supplier can take from that model the jurisdictions Flutter expects to regulate and the population coverage assumptions underpinning its mature-market view. Those are inputs. For a revenue-share supplier, the figure itself is not yet a supplier-revenue output, because getting from an operator market to a supplier opportunity means accounting for the portion of activity the supplier's product does not address, including functions handled in-house or by other providers, duty and promotions where those items are deductible under the applicable commercial arrangement, and then the supplier's actual rate for its layer of the stack.

Playtech's $3 billion, whatever its vintage, is at least framed from the supplier's side, with its scope stated. The company's wider model also includes equity-linked strategic investments, including Caliente Interactive and Hard Rock Digital. That is distinct from the conventional B2B opportunity measured in the $3 billion figure, which the 2022 presentation explicitly stated excluded structured agreements. That is precisely why the two Playtech figures cannot be read as one market and one discount.

Three letters, two meanings

The distortion becomes commercially sharp when NGR is used as a payment base for suppliers or affiliates.

Rank Group defines net gaming revenue in its results for the year to June 2026 as gross gaming revenue less customer incentives. Entain defines it in its 2025 results as net revenue before charging for VAT and sales taxes. Codere Online defines it in its Q2 2026 earnings presentation as gross gaming revenue less the impact from player bonuses and promotional bets, with gaming taxes as a separate cost line beneath it, running at 18.9 percent of NGR in the quarter. Betsson's 2025 annual report defines revenue as reported after payment of players' winnings, less deductions for jackpot contributions, loyalty programmes and player bonuses. Evoke's 2025 annual report puts gaming duties in cost of sales, alongside payment provider commissions and royalties payable to third parties, where they accounted for £427.0 million of a £600.9 million total. Across these disclosures, gaming duty is generally presented outside the headline NGR or revenue measure, although Betsson notes an accounting exception for certain games reported as financial instruments, where gaming taxes and related licensing fees may be deducted from reported revenue.

FDJ United defines it differently. In its 2025 results, gross gaming revenue was €8,705.6 million, public levies on games were €5,212.0 million, or 59.9 percent of it, and net gaming revenue was €3,493.6 million. Allwyn's 2025 annual report defines NGR as revenue from gaming activities less gaming taxes and good cause contributions; in its FY 2025 preliminary results the group reported gross gaming revenue of €8.632 billion and NGR of €3.753 billion, with consolidated net revenue of €4.112 billion once non-gaming revenue is included. Lottomatica's 2022 financial statements provide a historical example of the after-tax treatment, defining NGR as total bet minus winnings minus taxes. Its 2025 annual report instead defines GGR as the difference between bets and winnings and reports revenue separately, so the older NGR definition should not be read as evidence of its current headline reporting terminology.

Across the current disclosures above, two principal reporting treatments are visible. Under the first, the headline NGR or revenue measure remains before gaming duty. Under the second, NGR describes what remains after public levies or gaming taxes and other specified contributions: about 40 percent of GGR at FDJ and 43.5 percent at Allwyn in 2025. In this sample the after-duty definitions sit with the lottery and concession-led groups, though the group is too small to treat that as a sector rule. None is wrong and all are disclosed. A contract that uses the abbreviation without defining or incorporating the calculation can leave a commercially material ambiguity.

Betsson adds a third analytical layer. Alongside its headline revenue measure, it reports gross profit as revenue less variable costs including commission to partners and affiliates, gaming taxes, licensing fees to games suppliers, payments to payment suppliers and fraud. That line deducts several supplier-related costs and gaming taxes together. For 2025 Betsson reported revenue of €1,197.0 million and gross profit of €755.5 million, a gross margin of 63 percent, so a supplier reading only the revenue figure sees a base more than half again larger than Betsson's reported gross-profit base.

FDJ is explicit about the accounting consequence of its definition: any increase in tax automatically reduces revenue and, by the same amount, recurring EBITDA. FDJ's H1 2026 results provide a current example consistent with that mechanism: GGR fell 1.3 percent to €4.314 billion while revenue fell 4.5 percent to €1.782 billion, with the company saying the revenue decline was impacted by gaming tax increases. Rank's disclosure shows the other convention in the same reporting season. The UK raised remote gaming duty from 21 to 40 percent on 1 April 2026. Rank's NGR definition does not deduct duty, so the increase appears in cost rather than as a mechanical reduction in NGR; the company expects digital profitability to step down in 2026/27 as the full-year effect lands. Evoke, which also reports before duty, flags the increases effective from 1 April 2026 as a matter for its UK Online segment, where they land in cost of sales rather than revenue. Entain's H1 2026 results show the before-duty presentation from the other side: Group NGR rose 5 percent on a constant-currency basis, while underlying EBITDA fell 2 percent to £479 million, with the company saying NGR outperformance was more than offset by increased UK online gambling tax. All else equal, an equivalent increase in a levy deducted within NGR would reduce reported revenue directly.

What the difference costs

Two operators, each with €100 million of gross gaming revenue and €10 million of promotional spend, in a jurisdiction that has just moved gaming duty from 21 to 40 percent. The rates mirror the UK's change to remote gaming duty; the calculation below applies them to gross gaming revenue as a simplified illustrative base rather than as HMRC's statutory measure. A supplier contracts with both operators at 10 percent of NGR. For this illustration, the first convention deducts promotional spend but not gaming duty from NGR; the second deducts gaming duty but not the promotional spend.

Under the first convention, NGR is €90 million before and after the change. The supplier receives €9.0 million either way.

Under the second, NGR was €79 million at the old rate and is €60 million at the new one. The supplier's receipt falls from €7.9 million to €6.0 million.

Same rate, same underlying activity. The second supplier's fee base has fallen because its contractual NGR definition deducts the higher duty. The figures are illustrative; the rate change is not. In this illustrative structure, a higher duty applied to the revenue base widens the gap between the two treatments.

What to write into the contract

The commercial diligence implication is to avoid relying on an undefined reference to a counterparty's reported NGR, and, with appropriate legal advice, to define the calculation base expressly: gaming duty, VAT, promotional credits, jackpot contributions, payment costs, and the treatment of a mid-term change in a jurisdiction's tax base.

The exposure is not hypothetical. Kambi's Q2 2025 report states that its commission is a revenue share of operators' GGR less deductible costs such as certain capped marketing incentives and tax, which it defines as NGR, and the same report attributes part of the quarter's revenue decline to increased gaming-related taxes in multiple jurisdictions. Kambi has specified its base, and that base deducts duty, so where tax is deductible under the applicable arrangement an increase reduces the base its commission is calculated on. Gambling.com Group's annual report on Form 20-F makes the same point for affiliates: under revenue share agreements NGR is GGR adjusted for direct costs such as transaction fees, bonuses and taxation, and operators' direct costs may increase through new tax regulations. A supplier whose contracts inherit a counterparty's definition without examining it may be carrying that exposure unpriced.

For operators, the point runs the other way. An operator reporting NGR after duty presents a smaller base to every counterparty paid on it, including suppliers, affiliates and platform partners. That difference becomes commercially material wherever counterparties are paid on the same defined base, and anyone assessing the economics should examine the base rather than rely on the abbreviation.

There is also a public benchmark for a material part of the supplier cost base. Codere Online reports platform and content, which it defines as including payment service provider fees and sports streaming and data feeds, as a discrete line in its income statement. It has run between roughly 23 and 30 percent of net gaming revenue in every quarter since the start of 2023, and higher before that, against gaming taxes of 16 to 19 percent over the same period. Codere's disclosure is an unusually useful public benchmark for a material part of the supplier cost base, giving counterparties a disclosed reference point for assessing the economics.

For investors, the diligence test is short. A supplier deck citing an operator's TAM without a supplier-side bridge has not demonstrated a supplier-addressable TAM. Ask for the bridge.

What the base decides

Tennessee is the sharpest US example of why the base matters more than the rate. According to the state's own summary, licensed sportsbooks paid a 20 percent privilege tax on adjusted gross income until 1 July 2023, when Public Chapter 450 replaced it with a tax of 1.85 percent of gross handle. According to the American Gaming Association's nationwide comparison, Tennessee is the only US state taxing sportsbooks on wagers rather than on revenue, and because the tax no longer references payouts, the Council states plainly that payouts and adjusted gross income are not reported, since they are not used to assess the tax due.

The Council explains the arithmetic behind the change. Under the old structure, it says, sportsbooks were required to meet a 10 percent hold threshold, which made the 20 percent revenue tax mathematically equivalent to about 2 percent of gross handle. Public Chapter 450 set the new rate at 1.85 percent, below the 2 percent mathematical equivalent the Council describes for the previous structure.

What the change also did was move the state to the other side of the hold rate. A tax on revenue rises and falls with what operators keep. A tax on handle does not. Tennessee's receipts now track defined gross handle, which the state calculates after adjustments including cancelled or voided wagers and the federal excise deduction, rather than tracking what operators keep. That is a different exposure from states that tax sportsbook revenue.

June 2026 showed what that means. According to figures published by the Council, Tennessee handle reached $456.1 million, 30 percent up on the year before, and the privilege tax assessed came to $8.44 million, up almost exactly in step. National sportsbook hold also fell materially that month, during the World Cup. The American Gaming Association's tracker shows national June handle up 26 percent to $12.59 billion while revenue fell 18.3 percent, as hold dropped to 8.1 percent from 12.5 percent a year earlier.

New Jersey shows the other side of the same month. The Division of Gaming Enforcement's June release reports sports wagering handle up 16 percent while gross revenue fell 37.7 percent to $57.3 million, a decline the Division attributes to patron winnings on the NBA Finals and World Cup. New Jersey taxes that revenue. Tennessee taxes the wagers. The same month produced a 30 percent year-on-year increase in handle and a tax take that rose with it in Tennessee, while New Jersey's taxable sports-wagering revenue fell sharply. The contrast illustrates how the chosen tax base changes what each regulator's headline measure captures when hold moves.

The consequence reaches into company reporting. Because Tennessee stopped publishing revenue data in 2023, Flutter has excluded the state from its reported US sportsbook market share; the definition in its Q1 2026 earnings release, as in releases going back to 2023, reads "excluding Tennessee as they no longer report this data". A listed company's headline market share is calculated on a smaller map because Tennessee changed its tax base and the regulator consequently stopped publishing the revenue data Flutter uses.

A turnover-linked supplier and a net-revenue-linked supplier can therefore be exposed to very different signals from the same underlying market. The regulatory comparison makes the same point: the base decides what the observer sees, and the observers do not all use the same one.

When the denominator moves

DraftKings' Q1 2026 results still reported Sportsbook Handle and Sportsbook Net Revenue Margin. In its Q2 2026 results, the company reported Sports Consumer Volume, defined as the total amount of settled customer wagers or trades on its Sportsbook and Prediction Markets offerings, and Sports Net Revenue Margin, defined as sports revenue as a percentage of that volume. Sports Consumer Volume was $13.14 billion, up 14.5 percent. Sports revenue was $891.9 million, down 10.6 percent. Sports Net Revenue Margin was 6.8 percent against 8.7 percent a year earlier. Total company revenue was $1,443 million; the two volume and revenue figures are on different scopes and cannot be divided.

Flutter's second quarter results, published the previous day, reported US sportsbook handle up 2 percent and a net revenue margin of 8.7 percent, down 170 basis points, with promotional spend rising to 5.4 percent of handle. FanDuel Predicts is reported separately and its revenue was described as not material in the quarter.

So the most familiar head-to-head in American sports betting, DraftKings against FanDuel on net revenue margin, is no longer like for like. DraftKings' denominator now combines sportsbook wagers and prediction market trades, in the company's own words. Flutter's disclosed margin remains calculated on sportsbook handle, with its prediction market product reported separately. A reader comparing 6.8 to 8.7 is comparing quantities that are not compositionally identical, and a supplier sizing a fee pool on the blended figure cannot see from the headline what share of it comes from which product.

DraftKings was not alone that week. Two days earlier, DigiPlus Interactive introduced NGR after tax as a key operating metric, defining it as gaming revenues net of the Philippine regulator's share, game provider fees, marketing and promotional expenses, payment channel fees and other direct costs. On that measure the company reported growth of 0.9 percent in a quarter when gross gaming revenue fell 9 percent. Two companies, three days, two denominators moving, and both changes disclosed and defined. Anyone comparing either company's second-quarter reporting with its first therefore has to account for a changed KPI set or denominator.

When market development lagged the forecast

In its Q3 2025 report, Kambi said Brazil was developing more slowly than anticipated and cut full-year guidance for adjusted EBITA on its stated basis to around €17 million, with Brazil among the factors cited.

Kambi's disclosure makes a narrower point: a top-down market thesis and the supplier revenue realised from it are different quantities. The company did not attribute Brazil's slower development to a single cause; it cited Brazil alongside the ongoing negative impact of foreign exchange and the revised timing of a key partner launch. Super Group's July 2024 announcement that it would close its US sportsbook in all nine states in which it operated, because after an extensive review it did not see a long-term path to profitability for the product, makes the same point from the operator side. A large market and an obtainable one are different quantities.

What this means

For suppliers, a supplier-addressable market figure has to be built from the supplier's side, using a denominator that matches the commercial model. For a revenue-share product that may be regulated GGR or NGR; for transaction, usage or fixed-fee products it may be a different measure altogether. In each case, adjust for the portion of the operator stack the product can actually address, including in-house capability, and state the scope. Where NGR is used as a payment base, the commercial diligence implication is to understand the definition each relevant contract uses, with appropriate legal advice, before a duty change rather than after it. The UK's Remote Gaming Duty moved to 40 percent in April 2026. In the simplified remote-gaming illustration above, the same move from 21 to 40 percent reduces an after-duty base from €79 million to €60 million, a fall of roughly 24 percent, despite unchanged underlying activity.

For operators, the NGR definition can determine the base used by counterparties paid on it. Where a commercial arrangement adopts that definition, the economic consequence follows from the calculation itself, regardless of how the metric is labelled.

For investors, a supplier TAM that cites an operator's estimate is an input, not a sizing. The absence of a bridge from operator market to supplier revenue is itself information about how the opportunity is being presented.

The structural point is that multiple market-sizing, revenue-base and reporting conventions coexist in this industry, and they are not inherently reconciled with one another. The cited disclosures are generally explicit about their definitions. The distortion begins when the definition is stripped away from the number, at the point a figure leaves the document that defined it. Reading the footnote is not a research habit. It is where the money is.

---

Methodology. Figures and definitions were checked against the cited public disclosures: annual and interim reports, regulatory filings, company investor materials and regulator publications. Definitions are quoted or paraphrased as indicated.

Disclaimer. This article is published for information and analysis. It is not investment, legal, tax or other professional advice, and no reader should act in reliance on it without taking their own advice. Figures, definitions, tax rates and regulatory positions are drawn from the sources identified and stated as at the date of publication; some are described as preliminary or unaudited by their issuer and remain subject to revision. The worked example comparing two revenue conventions uses hypothetical figures to illustrate a mechanism and describes no actual company or contract; all commercial arrangements referred to reflect public disclosure only. Links are provided for reference and do not imply endorsement. Gaming Eminence gives no warranty as to accuracy or completeness and accepts no liability for loss arising from reliance on this article, to the fullest extent permitted by law. Corrections are welcomed at editorial@gamingeminence.com.