June 10, 2026

Gambling is One of Crypto's Fastest-growing Sectors, Reaching USD 14 Billion in Q1 Despite Market Correction

TRM Team

Gambling is One of Crypto's Fastest-growing Sectors, Reaching USD 14 Billion in Q1 Despite Market Correction

In 2025, on-chain gambling ran at comparable scale to prediction markets while drawing a fraction of the attention. This report examines the structural drivers behind that growth, the behavioral patterns among the wallets powering it, and the degree of illicit activity associated with the industry.

Key takeaways

While the industry fixated on prediction markets, on-chain gambling quietly reached USD 51 billion in 2025 — a sector larger than prediction markets until Q1 2026, when prediction markets pulled ahead for the first time.
Quarterly on-chain gambling volume surged through 2025, reaching USD 15 billion in Q4 2025 — the highest quarter on record — and sustaining USD 14 billion in Q1 2026, more than five times the USD 2.6 billion recorded in Q1 2021.
USDT accounts for approximately 94% of TRON gambling volume, structurally insulating the sector from crypto price swings.
Gambling growth persisted through the April 2025–March 2026 market correction — monthly volumes averaged higher than at any point in the preceding bull market, driven by structural demand that now outpaces price signals.
Prediction markets overtook crypto gambling in Q1 2026 for the first time, reaching USD 36.6 billion in on-chain volume against gambling's USD 14.0 billion. The two sectors increasingly overlap in the stablecoin flows that exchanges must monitor for risks, including money laundering.
The criminal risks facing crypto gambling and prediction markets are distinct: gambling platforms are primarily used as money laundering infrastructure, while prediction markets face scrutiny for insider trading — illustrated in April 2026 when a US Army soldier was indicted for using classified information to profit more than USD 400,000 on Polymarket.
TRM identifies three distinct patterns of illicit activity around crypto gambling: platforms used as money laundering infrastructure, platforms that are themselves frauds (e.g. the USD 33 million ZKasino exit scam), and platforms targeted by sophisticated attackers (e.g. Lazarus Group's USD 41 million theft from Stake.com).

How crypto gambling differs from prediction markets — and why it matters now

In early 2026, volume on prediction market platforms like Polymarket and Kalshi surged as US policy events drove retail participation. Allegations of pre-announcement trading on several high-profile markets prompted calls for regulatory action. TRM's research on prediction markets tracks how the sector scaled from near-zero volume to USD 21 billion in monthly trading volume. Crypto gambling drew less of that scrutiny — despite running at comparable scale throughout the same period.

Crypto gambling platforms — such as Stake, WINk, and Rollbit — operate like a traditional casino. The platform takes the other side of every bet, sets the odds, and maintains a house edge. A provably fair random number generator or live event result settles each bet near-instantly.

Prediction markets are peer-to-peer markets for binary outcomes. Traders buy YES or NO shares at market-determined prices; each correct share pays out USD 1; an incorrect share pays USD 0. There is no house edge — prices reflect collective probability estimates. The primary on-chain collateral is USDC on Polygon. Kalshi is regulated by the Commodity Futures Trading Commission (CFTC) as a designated contract market, distinguishing it from platforms that lack comparable regulatory authorization.

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By Q1 2026, prediction markets had pulled decisively ahead of gambling platforms for the first time — reaching USD 36.6 billion in on-chain volume against gambling's USD 14 billion. The rise of prediction markets into public consciousness also lifted gambling platforms. On-chain gambling hit a record USD 15 billion in Q4 2025 and held at USD 14 billion in Q1 2026, growing faster than most other on-chain categories throughout the same period.

What's driving the growth of on-chain gambling

On-chain gambling volume hit records in four of the last six quarters — including during the 2025 market correction, when most other crypto sectors contracted. Quarterly volume reached an all-time high of USD 15 billion in Q4 2025 and remained elevated at USD 14 billion in Q1 2026.

Across both bull and bear markets, gambling activity was less tied to crypto price cycles than other major on-chain categories. Exchange volumes generally rose and fell with the market, while gambling volumes remained relatively stable — and even grew during market pullbacks — before climbing steadily from 2023 through Q1 2026, regardless of bitcoin's (BTC) price movements.

Unlike trading activity, crypto gambling volumes showed limited sensitivity to broader market sentiment. Price appreciation was not a primary driver of gambling activity. To understand what else was driving growth, we examined whether volume expansion was coming from new participants or from existing users increasing their activity over time. The data points to the latter.

New wallet inflows peaked in Q3 2022 and have since declined roughly 54%. Over the same period, returning wallets — those that had gambled in at least one prior quarter — grew approximately 4x. Fewer people are trying crypto gambling for the first time — but those who have gambled keep coming back. By Q1 2026, new wallets still outnumbered returning wallets — but the ratio had narrowed from 9:1 in Q1 2022 to 1.4:1, a structural shift in who is driving activity.

Returning wallets didn't simply maintain their activity — they deepened it. Through the 2022 bear market, wallets already in the ecosystem continued sending to gambling platforms, pulling back average bet sizes but not frequency. When prices recovered, average stakes climbed to new highs. Volume expanded more than 300% between the bear market trough and early 2026; the active wallet count grew far less. Both the count of returning wallets and average spend per wallet rose over this period — but spend per wallet expanded at a faster rate, making higher per-wallet spending the primary driver of volume growth.

Indexed to Q1 2022, returning wallet activity compounded consistently upward across every market regime. New wallet acquisition peaked in 2022 and has trended lower since. Growth in on-chain gambling volume is a retention story.

The same retention dynamics also appear around major sporting events. Daily active gambling wallets remain relatively stable most of the year, but major events such as the Super Bowl and March Madness produce sharp temporary spikes in activity as otherwise dormant wallets return to bet, then fall inactive again. This pattern confirms a shift toward habitual and event-driven retail participation rather than purely speculative, market-linked activity.

Behavioral patterns emerge from on-chain wallet analysis

The growth in crypto gambling wasn't driven by a single type of user. Between January 2022 and March 2026, more than 2 million personal wallets interacted with gambling platforms — from low-stakes newcomers testing a casino once to entrenched high rollers moving hundreds of thousands of dollars over multi-year tenures. Transaction cadence, lifetime volume, and retention patterns separate these wallets into five behavioral archetypes.

Five behavioral archetypes shape gambling demand

Dabblers (413,000 wallets, 19%)

Five or fewer transactions, under USD 500 lifetime, gone within a month.

Casual Bettors (1,198,000 wallets, 55%)

The largest cohort. Average 18 transactions over eight active days before drifting away. Average bet USD 220.

Event Chasers (405,000 wallets, 19%)

Multi-year tenures but episodic activity — active on fewer than 15% of days in their tenure, with bursts around the Super Bowl, March Madness, and the World Cup. Average bet USD 166.

Daily Grinders (27,000 wallets, 1%)

The rare structural-engagement cohort. 99 active days on average, gambling on at least 30% of the days in their tenure. Median bet USD 70 — the demographic behind the USD 46 median deposit pattern identified in prior TRM research.

High Rollers (139,000 wallets, 6%)

Anchor the sector. Average USD 13,558 per bet, average lifetime gambling volume USD 378,000.

High Rollers represent 6.3% of personal gambling wallets but drive 91.8% of all personal wallet gambling volume since 2022 — USD 52.4 billion of the USD 57 billion in personal wallet volume. (This personal wallet total is distinct from the USD 169 billion sector-wide figure cited elsewhere, which includes smart contract-to-contract flows and non-personal custodial addresses.) The other four archetypes — 2.04 million wallets combined — account for the remaining USD 4.6 billion.

Volume growth: Intensification and retail expansion

Two forces drove on-chain gambling growth over the past 12 months.

The first is intensification among High Rollers. Monthly High Roller volume rose from USD 379 million in January 2022 to more than USD 2 billion by March 2026. The wallet population itself grew over this period, but average spend per wallet increased as well — meaning the same users, on average, are betting larger amounts over time.

The second is retail expansion. Casual Bettor monthly volume rose from USD 17 million to USD 188 million over the same period — an 11x increase, faster than any other major cohort. Active Casual Bettor wallets per month grew 8.4x, from 17,330 to 146,149. Daily Grinder volume grew even faster, increasing 12x between early 2022 and March 2026.

Through 2024 and early 2025, growth was driven primarily by High Roller intensification. During the 2025–26 market correction, that dynamic began to shift. Casual Bettor and Daily Grinder volumes started growing faster, in percentage terms, than High Roller volume — even as High Rollers continued to account for roughly 83% of monthly gambling volume.

High Rollers still anchor 83% of monthly volume — but they are not the growth story. Daily Grinders and Casual Bettors are the fastest-expanding cohorts. Daily Grinder volume grew 12x since 2022; Casual Bettor volume grew 11x, with active wallets expanding from 17,330 per month to 146,149. These are not high-stakes speculators, but recreational bettors with regular habits, small bets, and long tenures. The sector is broadening as well as intensifying.

The regime-by-regime breakdown shows that on-chain gambling continued expanding across every major market environment — bear, recovery, bull, and correction — though the drivers of that growth shifted over time. During the bull market (Q1 2024–Q1 2025), High Rollers and Daily Grinders led volume growth, with both cohorts expanding more than 180% relative to the recovery period. During the 2025–26 correction, overall gambling volume continued rising across every archetype, confirming the sector's structural resilience even as broader crypto markets weakened. But the composition of growth changed materially. High Roller growth slowed to +66% relative to the bull baseline, while Daily Grinder volume held at +169% and Casual Bettor volume at +133%, indicating that correction-era expansion has been driven increasingly by retail participation rather than whale intensification.

How the chain mix shifted: TRON's rise, Polygon's surge, and Bitcoin's decline

In January 2022, TRON handled approximately USD 180 million in monthly gambling volume — about 17% of the combined eight-chain total. By 2025, TRON's annual inflows reached USD 19.3 billion — 38% of total volume across all chains, a 12x increase from early 2022. In Q1 2026, Polygon posted its highest quarterly gambling volume on record, approaching TRON's USD 6 billion in on-chain inflows — the first time since 2022 any chain has come close to matching TRON's quarterly scale. Polygon's rise likely reflects its low-cost EVM-compatible infrastructure and deep USDC liquidity, which attracted both new casino-style gambling platforms and hybrid wagering products that operate at the boundary between traditional gambling and prediction markets.

TRON's dominance is built on near-zero gas costs, three-second block times, and deep USDT liquidity. Bitcoin's trajectory ran in the opposite direction: in 2022, Bitcoin-based gambling accounted for approximately 36% of combined volume. By 2025, its share had fallen to around 2%. High transaction fees and Bitcoin's unspent transaction output (UTXO)-based architecture impose friction on the high-frequency, small-value transactions that characterise online gambling. TRON's near-zero fees and three-second block times remove that friction entirely.

Ethereum gambling grew in absolute terms — from roughly USD 610 million per month in early 2022 to approximately USD 1.4 billion by early 2026 — but its share of combined volume declined from roughly 30% in 2022 to 24% by 2025 as TRON outpaced it. In absolute terms, Ethereum kept pace with the category's overall growth; in relative terms, TRON captured the new demand.

Stablecoins drive the sector

This reflects a core limitation of early crypto gambling: players were exposed not just to the outcome of the game, but also to swings in the value of the underlying asset. A player depositing volatile cryptocurrency into a gambling contract is making two simultaneous bets — one on the game, one on the asset price. Stablecoins collapse that to a single bet. A USD 50 USDT deposit is worth USD 50 when placed, USD 50 while the round resolves, and USD 50 on withdrawal. That predictability makes on-chain gambling functionally equivalent to fiat-currency casino products. It also explains why platforms built on high-frequency, low-margin games (dice, crash, slots) migrated to stablecoin rails as soon as the infrastructure made it economically viable.

Illicit exposure: Three distinct risk patterns

Crypto gambling crossed USD 51 billion in 2025, and prediction markets have grown alongside it into a multi-billion-dollar sector. With that scale comes criminal attention — and the risks attached to each sector are not the same.

Prediction markets have come under scrutiny primarily for insider trading — pseudonymous wallets placing large bets just before public events that resolve the markets in their favor. In April 2026, federal prosecutors indicted a US Army soldier stationed at Fort Bragg for allegedly using classified information about a military operation to capture Nicolás Maduro to place approximately USD 33,000 in Polymarket bets, netting more than USD 400,000 in profit after the operation succeeded. The Department of Justice characterised the conduct as “clear insider trading.”

Crypto gambling platforms attract a different threat profile. Rather than trading on non-public information, the risk centers on money laundering — criminal proceeds moving through casinos that absorb illicit deposits, co-mingle them with legitimate gameplay, and pay them back out as ostensibly clean “winnings” — and on a smaller but distinct set of platforms that were never legitimate to begin with.

TRM has observed two primary patterns of illicit activity around crypto gambling: gambling platforms used as money laundering infrastructure and gambling platforms that are themselves fraud.

Money laundering: Gambling as a layering mechanism

Gambling platforms are structurally attractive for money laundering. High transaction volumes, frequent deposits and withdrawals, minimal KYC requirements on many offshore platforms, and the plausible explanation of “winnings” for sudden wealth all make casinos — physical and online — a documented layering vehicle. TRM has observed this pattern across a wide range of predicate crimes — including terrorist financing, child sexual abuse material (CSAM), and the broader Chinese-language money laundering network (CMLN) ecosystem — a few examples of which are highlighted below.

In one case, a CSAM vendor sent nearly USD 100,000 in USDT and ETH to a top gambling platform between March and September 2025. The platform absorbed the funds into its centralized infrastructure and co-mingled them with deposits from unrelated users — a pattern consistent with systematic layering rather than recreational gambling.

In another, Hamas-linked addresses exhibited bidirectional exposure to a major gambling platform totaling approximately USD 1.2 million in USDT between June and November 2025. The bidirectional pattern — funds flowing both in and out — is consistent with using the platform as a pass-through mixer rather than a gambling venue. In one documented instance, an address deposited USD 15,000, received USD 15,000 back within hours, then withdrew USD 10,500 to a major exchange.

At the organized crime level, Prince Group — one of the largest pig butchering operations ever uncovered — allegedly ran JinBei Casino as dedicated laundering infrastructure. Victim funds moved through the casino and affiliated businesses, including two mining companies, before integration as ostensibly clean proceeds. TRM analysts identified previously unattributed addresses linked to Prince Group that held or transacted large sums connected to this laundering stack. The pattern — scam compounds physically co-located with casino infrastructure — has been documented across Myanmar, Cambodia, and Lao PDR, where pig butchering operations and their adjacent casinos function as a single criminal complex.

Chinese-language money laundering networks (CMLNs) have also made gambling a primary integration layer at scale. Gambling platforms are one of the primary money movement techniques deployed by CMLNs — alongside running-point brokers, money mules, OTC desks, Black U services, and mixing/swapping services. The UNODC documented more than USD 17 billion in illicit USDT transactions through casino platforms in a single year (September 2022 to September 2023). In the most sophisticated cases, CMLN-affiliated insiders go a step further — directly controlling gameplay outcomes, with Chinese-language Telegram vendors openly advertising “winning numbers” backed by compensation guarantees if they fail to pay.

Gambling platforms that were never legitimate to begin with

The clearest example of criminal activity is when the platform itself is the scam. Users deposit funds expecting to gamble, but the operators never intended to run a real game.

One such case is ZKasino, a self-described decentralized gambling protocol that launched in early 2024. Users were told their deposits would be returned after the platform went live. On April 20, 2024, the operators removed approximately 10,515 ETH — roughly USD 33 million — from the bridge contract that had collected deposits from 8,815 wallets. The funds were swapped into wstETH via Lido and split across three new wallets within nine days. Operators quietly removed the language promising deposit returns before executing the withdrawal.

What comes next for on-chain gambling

In just over four years, on-chain gambling has grown from a Bitcoin-native experiment into a USD 51 billion annual sector — one that sustained volume through a prolonged crypto market correction while most other on-chain categories contracted.

On-chain gambling and prediction markets are converging on a shared financial infrastructure. Both sectors serve demand for on-chain probability pricing, and an emerging class of hybrid wagering products already operates at the boundary between them. The USD 14 billion in Q1 2026 gambling volume and USD 36.6 billion in prediction market volume increasingly represent two expressions of the same underlying rails.

The sector's continued growth will depend on how several tensions resolve. Questions about platform integrity, the role of non-public information, and the regulatory treatment of offshore-licensed operators remain open and increasingly relevant as gambling platforms attract the mainstream attention that prediction markets drew in 2025 and early 2026. Bitcoin's decline from 36% to 2% of gambling volume shows how quickly market participants route around infrastructure that imposes friction; similar competitive dynamics are already playing out between chains and between stablecoin-native and volatile-asset platforms.

At the behavioral level, the shift from acquisition to retention as the primary growth driver is the most notable finding. A sector that grows during bear markets because habitual users return regardless of price is a different kind of market than the speculative experiment that 2022 suggested it might become. Whether that signals genuine maturity or a concentration risk is the central question for the sector's next phase.

Methodology

TRM analyzed transaction data across eight major blockchains (TRON, Ethereum, Bitcoin, BNB Chain, Polygon, Solana, Base, and Arbitrum) from January 2022 through March 2026. Gambling volume represents proportional incoming volume to addresses in the gambling and decentralized gambling categories in TRM's analysis. WINk game-type transaction counts sourced from TRONScan contract-level data against smart contract addresses identified in TRM's ABI table; infrastructure contracts excluded. BTC price data: TRM Labs asset price feed (monthly averages).

Frequently asked questions (FAQs)

1. What is on-chain crypto gambling?

On-chain crypto gambling refers to wagering activity conducted through smart contracts on public blockchains, where bets are placed, settled, and recorded on-chain. Platforms such as WINk (on TRON), Stake, and Rollbit handled over USD 14 billion per quarter in on-chain volume as of Q1 2026. The dominant settlement currency is USDT on TRON, which accounts for approximately 94% of TRON gambling volume.

2. How does crypto gambling differ from prediction markets?

Crypto gambling platforms operate like a traditional casino: the platform takes the other side of every bet, sets the odds, and maintains a house edge. Prediction markets such as Polymarket and Kalshi are peer-to-peer markets for binary outcomes, where traders buy and sell probability shares with no house edge. Kalshi is regulated by the CFTC as a designated contract market; most crypto gambling platforms operate under Curaçao or similar offshore licenses.

3. Why do stablecoins dominate crypto gambling volume?

Stablecoins account for approximately 70% of all on-chain gambling volume since 2022 — USD 117 billion of the USD 169 billion total. USDT and USDC together make up the vast majority of that, at USD 73 billion and USD 34 billion respectively. On TRON, where near-zero TRC-20 transaction fees make micro-deposits economically viable, the stablecoin share reaches 94%. Stablecoins also remove the price-volatility risk that previously made on-chain gambling impractical, giving players predictable deposit and payout values comparable to fiat-currency casino products. That predictability is why platforms built on high-frequency, low-margin games (dice, crash, slots) run on stablecoin rails wherever the infrastructure makes it economically viable.

4. Is crypto gambling regulated?

Crypto gambling platforms operate under varying regulatory regimes. Many hold licenses issued in Curaçao or similar offshore jurisdictions; others operate without any regulatory authorization. Compliance teams should verify that customer transaction flows do not reach operators unauthorized to serve customers in their specific jurisdiction of residence — a license in one jurisdiction does not guarantee compliance in another.

5. How should compliance teams monitor crypto gambling exposure?

A USDT or USDC transfer from a centralized exchange to a gambling contract is indistinguishable from any other stablecoin withdrawal at the transaction level. Detection depends on whether the destination address has been attributed to a gambling entity. Compliance teams should ensure transaction monitoring programs cover TRC-20 USDT flows on TRON — where most gambling volume occurs. Programs focused on native cryptocurrency flows alone will miss approximately 70% of gambling volume.