March Madness betting at state-regulated sportsbooks is expected to fall this year, Citizens Bank research reportedly shows. If accurate, it would be the first year-over-year drop since sports betting expanded in the U.S. in 2018.
Citizens projected the legal betting handle for the 2026 tournament at $3 billion, a 3% year-over-year decline.
A dip in betting coincides with rising concern about the societal harms of legal sports betting. Approximately half of online sports bettors are at-risk of problem gambling or experience addiction.
Industry March Madness Estimate
The American Gaming Association, which lobbies on behalf of sports betting companies, estimated $3.3 billion in legal bets this year, up from its $3.1 billion estimate in 2025.
The group estimated $2.7 billion in 2024, so even industry forecasts show slowing handle growth.
States regulating sports betting do not report data specifically on March Madness wagers.
H2 Gambling Capital, an industry consulting group, estimated the 2026 March Madness sportsbook handle at $4 billion, a 6.7% increase from its prior year projection.
Citizens is more independent of the betting industry than the AGA or H2 Gambling Capital.
Why Might Handle Fall?
A confluence of factors is impacting the online sports betting industry for March Madness.
Citizens analyst Jordan Bender reportedly attributes this year’s dip partly to lower online gambling engagement after the NFL regular season and Super Bowl.
FanDuel, for example, reported weak growth in betting handle near the end of the season because its customers lost too much money in a short period. The sportsbook crushed users with high-margin parlays.
Prediction markets like Kalshi, excluded from handle estimates, may also affect regulated online betting. However, only 3% of Americans have used a prediction market, according to a recent poll.
The legal sports betting market is maturing, with few new market launches. Missouri was the exception in 2025.
Some states and jurisdictions, such as Chicago, have implemented higher sports betting taxes, which sportsbooks may pass on to consumers.
Bottom Line
No one knows exactly how much is bet on March Madness via state-regulated platforms each year.
It is also unknown how much is bet through offshore and sweepstakes sportsbooks—sources considered illegal by many states—since these platforms do not publish verifiable gambling data.
Prediction markets, widely viewed by Americans as gambling, publish volume data on their platforms, offering a look at their controversial March Madness activity. Volume is not the same as handle, as the former includes both sides of a sports trade.
Factoring in these platforms, Americans will likely bet slightly more online during March Madness 2026, though some consumers seem to be recognizing their limits.
One study found that just 4% of online bettors win money, and another paper found that Kalshi users have an expected ROI of -22% after fees.
Image via Wikimedia Commons/Jeff Marquis from San Carlos, CA, USA.
