Americans placed about $166 billion in wagers on sporting events in 2025, a total larger than the combined revenue generated by the U.S. movie, music, book and museum industries.

The North American box office reached $8.87 billion in 2025, still 22% below pre-pandemic levels. Recorded music revenue rose to a record $11.5 billion, while live music, including concerts and festivals, generated $18.51 billion. Book publishers tracked by the Association of American Publishers reported $14.6 billion for the year, and the U.S. museum industry produced an estimated $16.4 billion. Together, those categories totaled roughly $70 billion, less than half the amount Americans wagered on sports.

The comparison is not a like-for-like measure of consumer spending: sports-betting handle counts every dollar staked, while box-office tickets, concerts, books and museums report revenue. Still, the gap illustrates how quickly legal sports wagering has become a mainstream consumer activity since the market opened across much of the country.

“It fills that void, and it will crowd out other forms of entertainment, other forms of hospitality, for sure,” said Martin “Marty” Conway, an adjunct lecturer in Georgetown University’s Sports Industry Management program. Sports gambling has become more widespread and, as a result, more accepted as another form of entertainment, he said. “They’ve taken something that was just who’s going to win, and now you’re actually able to get involved in certain other events of the game. That’s a form of engagement as opposed to what we knew previously.”

The $166 billion figure may understate the actual scale of the market. Several states allow betting through tribal casinos, most notably Florida, as well as Washington and Wisconsin, and those operators are not required to publicly disclose their betting handle. Victor Matheson, an economist at Holy Cross who studies sports gambling, said Florida alone accounts for somewhere between $5 billion and $10 billion. “The $165 or $170 billion number is low,” he told Fortune.

The total also does not include sports wagering activity on prediction market platforms such as Kalshi and Polymarket, which have expanded quickly into sports contracts after receiving federal regulatory clearance. Matheson estimated that those markets could add another $50 billion to $100 billion in handle. Including legal sportsbooks, unreported tribal handle and prediction markets, the real volume of American sports wagering in 2025 could approach $300 billion. That uncertainty makes disclosure rules and the treatment of sports contracts on prediction markets important to understanding the true size of the industry.

That means the average American adult placed roughly $1,000 in legal sports bets last year. Handle, however, represents gross wagering volume rather than consumer spending. More than 90% of the money wagered is returned to bettors as winnings. On that basis, the $1,000 in bets equals about $100 in average losses per adult. “That overall doesn’t really seem to be a crisis,” Matheson said, while adding that the key issue is how those losses are distributed.

The best word is ‘free’

Sports-betting losses are concentrated among a relatively small group of users. About 95% of total losses are borne by 5% of bettors, a group of heavy users whose spending is far removed from that of a casual fan placing $20 on a Sunday parlay. “That is a problem,” Matheson said.

Conway, who spent three decades as a senior executive at Major League Baseball, the Baltimore Orioles, the Texas Rangers and AOL, said betting platforms are designed to identify and retain those heavy users. “They’re able to recognize, ‘Hey, this person hasn’t really participated in two weeks. I need to spike them an offer,'” he said. “They’re very good about back-end information about when people are dropping off.”

Free-bet promotions, now common in sports advertising, are intended to draw those users back to the platforms, Conway said. He described the practice as a descendant of the old illegal bookmaking system, in which bettors received credit to continue wagering after a loss. “The best word in marketing in the history of business has been ‘free,'” he said, “and in this case they make it appear as though it’s free, even though we know it’s really not.”

Sports betting barely existed in most of the United States before the Supreme Court struck down the federal ban on sports wagering in 2018. The industry then expanded rapidly, with the amount wagered rising from $6.6 billion in the first year to $166 billion in 2025. Matheson, who had studied the U.K. market where sports betting has been legal for decades, said the growth path was not entirely unexpected. “The UK is betting about $1,000 per adult per year,” he said. “The states that went all in. New Jersey, New York, Massachusetts, Colorado, Arizona. They’re all at over $1,000 per person per year in handle.”

The illusion of control

What was less predictable, Matheson said, was the demographic profile of the legal market. Sports betting has attracted young, college-educated men who had largely avoided traditional gambling. That previously untapped group, he said, is drawn in by an illusion of control. “You say, ‘If I just knew a little bit more and studied a little bit harder, I really could make money here,’ because this isn’t craps, where the odds are what they are and I can’t throw the dice in some special way.”

That belief in a skill- or knowledge-based advantage appeals to people who would not otherwise buy a lottery ticket, he said. But the markets are priced to neutralize the edge that bettors think they have. “All of that knowledge is built into these bets in the first place. These lines are not being made by uneducated people.”

“It literally is just a vortex,” Conway said. “It picks up momentum, and that momentum takes it to another level.” Sportsbooks use parlays, live in-game wagering and prop bets on individual player statistics as engagement tools, turning betting into its own form of sports consumption. Those products compete for the same time and money that might otherwise be spent attending games or watching them without a financial stake. “They’ve taken something that was just who’s going to win,” Conway said, “and now you’re actually able to get involved in certain other events of the game. That’s a form of engagement as opposed to what we knew previously.”

Whether that new form of engagement is taking spending away from movie theaters, bowling alleys and concert venues remains an unsettled empirical question. “It’s hard to believe that $100 of entertainment spending per person, because that’s what sports betting is actually costing people on average, is going to make it so that people aren’t playing video games or going to Marvel movies anymore,” Matheson said.

The clearest displacement Matheson identified is occurring within gambling itself. Lottery ticket sales at convenience stores have begun to fall in states where online sports betting has become established, as the more frictionless online option replaces trips to the corner store.

A recent New York Fed study found that credit card delinquencies among millennials and Gen Z have increased in states where sports betting is legal. Researchers said the findings showed that some bettors are financing the habit with debt. Separately, a U.S. News and World Report survey found that a quarter of sports bettors now say they worry they cannot control their gambling. Those findings are why researchers focus less on the average loss per adult and more on whether debt, promotions and high-frequency products are concentrating harm among the heaviest users.

“With addictive products,” Matheson said, “the question is whether you kind of kill off your hosts—or whether you can string them along.”

This story was originally featured on Fortune.com.