The annual frenzy of March Madness is poised to shatter records for legal sports wagering across both online platforms and physical sportsbooks over the coming three weeks. According to fresh data released by the American Gaming Association (AGA), an influential industry lobbying group, Americans are projected to legally bet a staggering $3.3 billion on the men's and women's NCAA basketball tournaments by 2026. This figure represents a dramatic 54-percent increase compared to the last three years, as reported by the AGA, and nearly doubles the total handle recorded for February's Super Bowl.
Unprecedented Fan Engagement and Legal Betting Growth
Bill Miller, President and CEO of the American Gaming Association, emphasised the tournament's significance in a recent statement. 'March Madness stands as the pinnacle of the college basketball season, with fans eagerly preparing for a month of intense tournament action,' Miller declared. 'Supporters are increasingly turning to legal, state- and tribal-regulated sports betting in record numbers, particularly during this major highlight on the sports calendar.'
The organisation attributes this sustained expansion to rising consumer confidence in regulated gambling options. However, the AGA also recognises a substantial uptick in activity on prediction markets—platforms that operate outside the oversight of state gaming commissions. Instead, these markets fall under the jurisdiction of the federal Commodity Futures Trading Commission (CFTC).
The Rising Influence of Prediction Markets
While the AGA's projected $3.3 billion handle for March Madness excludes bets placed on prediction markets, the group's press release underscores the growing impact of platforms such as Kalshi and Polymarket on the broader industry. In 2025, approximately 15 percent of all digital sports betting advertisements originated from prediction markets, with Kalshi currently ranking as the third-largest sports betting advertiser in the United States, according to AGA statistics.
Estimating the total handle for prediction markets during March Madness presents challenges, but gaming data firm H2 anticipates that platforms like Kalshi and Polymarket will attract around $150 million in wagers this year. These emerging trading platforms function similarly to online sportsbooks by offering futures contracts with prices and returns that fluctuate akin to traditional betting odds, where underdogs yield higher payouts than favourites.
Customers engage with binary choices—such as 'yes or no' or 'one or the other'—on a wide array of positions, ranging from gas prices and papal elections to sports outcomes, like whether the Celtics will clinch the NBA title. Notably, platforms like Kalshi and Polymarket gained attention during the 2024 US Presidential race by accurately forecasting Donald Trump's electoral victory over Kamala Harris through customer wagers.
Regulatory Loopholes and Political Backing
Since then, the industry has encountered cease-and-desist orders from multiple states as these platforms have accepted hundreds of millions of dollars in bets on events from March Madness to the Masters. Crucially, these websites classify themselves as 'exchanges' rather than 'sportsbooks,' enabling them to face lower taxes and achieve broader availability since they are not prohibited or regulated by individual states.
Prediction markets operate under the CTFC, a framework that Nevada state senator Dina Titus has criticised as a 'backdoor way' to legalise sports gambling without implementing essential safeguards. Despite regulatory scrutiny, prediction markets have garnered support from reformers like the influential Campaign for Fairer Gambling, as well as high-profile figures such as Donald Trump Jr., who serves on Polymarket's board and acts as a strategic advisor for Kalshi.
For enthusiasts, Kalshi and Polymarket are currently predicting Duke to triumph in the men's NCAA tournament, while the women's field remains highly competitive and open. As March Madness unfolds, the convergence of legal betting and unregulated prediction markets continues to reshape the sports wagering landscape, driving unprecedented financial engagement from fans nationwide.
