H2 Gambling Capital projects sportsbooks will handle roughly $4 billion in March Madness wagers in 2026
The 2026 NCAA basketball tournaments are on track to generate record wagering in the United States. Research firm H2 Gambling Capital projects that licensed sportsbooks will accept approximately $4 billion in wagers across the men’s and women’s tournaments this year. That figure represents an increase of roughly 6.7% over the estimated $3.7 billion handled at the 2025 edition.
The tournaments open with early games on March 17, with the first full round beginning March 19. The competition runs for approximately three weeks and has established itself as one of the most active periods of the year for both online and retail sportsbook operators.
What Is Driving the Growth
H2 attributes the increase to two primary factors. Continued handle growth across existing legal betting states is one. The other is the December launch of the Missouri sports betting market. Missouri became the latest state to go live late last year, adding a significant new pool of bettors entering the market just before one of the year’s biggest betting events.
While the Super Bowl remains the most wagered single game in U.S. sports, drawing an estimated $1.4 billion in bets for Super Bowl LX, March Madness generates the highest sustained volume of any annual sports event.
H2 describes it as the most bet-on event in the U.S. sporting calendar, a product of the sheer number of games played across the tournament window and the broad participation it drives from casual bettors.
Prediction Markets Add Another Layer
Prediction market platforms will also handle tournament-related activity this year, adding a dimension that was far smaller in scope during the 2025 event. H2 estimates these exchanges could produce approximately $530 million in handle-equivalent volume during the 2026 tournament. If that materializes, total wagering connected to March Madness could approach $4.5 billion.
The comparison between prediction market volume and sportsbook handle requires some care. Prediction markets count both sides of a trade in their volume figures. A bettor purchasing a contract for 20 cents registers as a full dollar in volume, while a $50 wager at a sportsbook registers as $50 in handle. The two metrics are not directly equivalent.
The legal status of these contracts remains contested. Several states have moved to block prediction market platforms from operating, arguing they function as unlicensed gambling products that bypass state oversight and taxation. The platforms contend they operate lawfully under federal CFTC oversight. Despite the ongoing legal disputes, tournament-linked contracts are available nationwide this year.
Limited Impact on Licensed Sportsbooks
H2’s report addresses the question of whether prediction markets are drawing handle away from traditional sportsbooks. The firm’s conclusion is that the impact in legal betting states is modest. Its analysis suggests prediction markets are most active in states where no licensed sportsbook operates, which limits their competitive effect in regulated markets.
In states where legal sports betting already exists, H2 estimates prediction market activity will account for roughly $135 million to $150 million in handle-equivalent volume during the tournament. That represents approximately 3.5% of the projected $4 billion sportsbook handle. The firm noted that the share of gross gaming revenue would be even smaller, and that it would be inaccurate to attribute any sportsbook softness in those states to prediction market competition.
Bettor Behavior and Sportsbook Margins
Data from betting analytics app Juice Reel provides a closer look at how bettors engage with the tournament. During last year’s 22-day tournament window, average bet sizes among tracked users were $36.50, with a median handle per user of $5,127. Notably, 12% of March Madness bettors placed no wagers in the 22-day period before the tournament began, suggesting the event brings a distinct seasonal audience into the market.
Sportsbooks typically face lower hold percentages during March Madness than during professional sports seasons. College basketball generates fewer player-prop and same-game parlay bets, which tend to carry higher margins for operators.
As a result, hold rates are more sensitive to whether tournament favorites advance. H2 projects a hold rate of around 7% for the 2026 tournament, up from an estimated 6.1% in 2025, a year in which all four top seeds reached the Final Four.
At a 7% hold on $4 billion in handle, sportsbooks would generate approximately $279 million in gross gaming revenue from the event. That would represent an increase of more than 23% compared to the prior year.
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