With March Madness just around the corner, sports betting sites are gearing up for a record handle, with one analyst projecting in excess of $135 million spent on bets throughout the event.
Taking place from 17 March, the NCAA Division I Men’s Basketball Tournament is the annual U.S. college basketball tournament in which 68 teams compete in a single-elimination bracket to determine the national champion.
H2 Gambling Capital estimates increase of 6.7% in March Madness
According to research from H2 Gambling Capital, they estimate total betting handle for March Madness will reach $4.0 billion in 2026, a 6.7% increase year-over-year, driven by continued market expansion across U.S. states and the launch of sports betting in Missouri in December. Sportsbooks handled about $3.7 billion in wagers during the 2025 March Madness tournaments.
The same analysts estimate sportsbooks’ hold rate for this season’s tournament is expected to reach 7%, up from an estimated 6.1% margin last year. The prior tournament’s lower hold was partly attributed to an unusually predictable bracket.
In 2025, all four No. 1 seeds reached the Final Four, only the second time this has occurred in tournament history. Outcomes that align closely with betting favorites can reduce sportsbook margins, as many bettors correctly pick winning teams.
Based on the projected $4.0 billion betting handle, the improved hold rate would generate around $279 million in gross gaming revenue (GGR) for operators. That represents an estimated 23.1% increase year-over-year, driven by both higher betting volume and stronger margins.
H2 Gambling Capital adds: “Operators will be hoping hold margins continue the trend from the NFL season, which saw a marked improvement on the prior season, with many operators citing favourable outcomes boosting margins,
“This was reflected in Q4 hold rates across U.S. states reaching 10.8% this year compared with 8.1% in the prior year. Operators also benefitted from favourable outcomes in Super Bowl LX. Across the six states to have released wagering data for the big game, there was an aggregated hold margin of 24.1%, although handle was lower than expectations.”
Prediction markets to experience more modest handle
Prediction markets, which have exploded in popularity in recent months, are also expected to see increased activity around the event, although analysts say their impact will remain modest compared with traditional sportsbooks.
Platforms offering event contracts allow users to trade on outcomes in a way that mirrors sports betting markets, effectively creating an alternative mechanism for speculating on tournament results. But researchers say these markets tend to over-index in states where legal sportsbooks are not available.
According to analysis from H2 Gambling Capital, prediction markets could generate a “handle-equivalent” trading volume of roughly $135 million to $150 million in states where regulated sports betting already operates.
Compared with the projected $4 billion sportsbook handle for March Madness, that represents roughly 3.5% of the total market and less than 2% of gross gaming revenue generated by licensed operators.
As a result, analysts say any slowdown in sportsbook wagering during the tournament would be difficult to attribute to competition from prediction markets. Given their relatively small share of activity in regulated states, blaming softer sportsbook performance on the presence of these platforms would be “disingenuous,” according to the analysis.
Kalshi had already recorded more than $42 million in activity on its “Men’s College Basketball Champion” contract as of Monday morning. For comparison, the same market finished last year’s tournament with $75.4 million in total volume, suggesting that betting tied to the 2026 championship still has plenty of room to grow as the event unfolds.
Meanwhile, prediction market contracts tied to sporting events are facing legal scrutiny from state gambling regulators across the United States. Although those challenges are ongoing, court proceedings are expected to move slowly, which means the contracts will remain available throughout this year’s March Madness. Bettors will still be able to access them in states regardless of whether traditional sports betting is legal.
Fixer in NCAA basketball point-shaving scheme pleads guilty
The specter of match manipulation looms over March Madness this year, with a recent point-shaving scheme going through the courts in the lead up to the
Jalen Smith, one of the alleged organizers in a large NCAA basketball betting scheme, pleaded guilty Monday in federal court in Philadelphia. He admitted to wire fraud and bribery charges, becoming the first of 26 defendants to do so. The case comes just days before March Madness, when billions of dollars will be wagered on the tournament.
Prosecutors say Smith used his connections as a basketball trainer to recruit college players into the scheme. Players were promised payments to intentionally underperform during games. Fixers would then bet against those teams, profiting when the manipulated results hit.
Authorities allege the operation expanded quickly, eventually involving more than 39 players across 17 Division I teams. More than 29 games were targeted, with players typically receiving between $10,000 and $30,000 per game. Investigators say the group wagered millions and paid out hundreds of thousands in bribes.
The scheme reportedly began with manipulated games in China’s professional league in 2023 before moving to U.S. college basketball. Some players also recruited teammates to help influence outcomes. According to prosecutors, the final game linked to the scheme took place in January 2025.
