March Madness is poised to deliver a substantial boost to the US sports betting market, with billions in wagers anticipated across legal sportsbooks and a projected increase in operator hold rates.
Key Takeaways
* H2 Gambling Capital estimates March Madness sportsbook handle to reach $4 billion, a 6.7% increase from the previous year.
* Sportsbooks are projected to achieve a 7% hold rate for the tournament, translating to $279 million in Gross Gaming Revenue (GGR).
* Prediction markets are expected to generate a ‘handle equivalent’ of $135-150 million in legal wagering states, representing a small fraction of the overall market.
March Madness Betting Volume Anticipated
The NCAA men’s and women’s basketball finals, commencing on March 17 with Round One starting March 19, mark the beginning of the most wagered-on event in the US sporting calendar. While the Super Bowl remains the single most bet-on game, generating an estimated $1.4 billion for Super Bowl LX, the multi-week March Madness tournament offers a consistent opportunity for operators to expand their customer base and elevate betting handle.
H2 Gambling Capital forecasts the March Madness sportsbook handle for this season to reach $4 billion. This projection indicates a 6.7% increase compared to the prior year’s tournament, continuing a trend of consistent growth. Looking ahead, H2 estimates further expansion for the 2026 event, driven by ongoing handle growth across US states and the full integration of the Missouri betting market, which launched in December.
Prediction Market Impact
Prediction markets are expected to generate a ‘handle equivalent’ volume of approximately $135-150 million in states where legal sports wagering is active. This figure, when compared to the $4 billion legal handle, represents about 3.5% of the total market handle and less than 2% of market GGR. This suggests that any potential softness in wagering for traditional sportsbooks would not be primarily attributable to the presence of prediction markets in those states.
Hold Rate Expectations and Industry Trends
March Madness typically results in lower hold rates for sportsbooks compared to professional sports. This is partly due to a reduced percentage of same-game parlays, as individual college players are generally less recognized, making player props less popular. Operator performance during the tournament is often influenced by the outcomes of favorites, with underdog victories or deep tournament runs frequently boosting margins as multi-game parlays may not complete.
H2 estimates the sportsbooks’ hold rate for this season’s tournament to reach 7%. This marks an increase from last year’s estimated margin of 6.1%, which was notably lower than previous seasons, possibly influenced by all four number one seeds advancing to the Final Four for only the second time in history. Based on the handle estimates, this hold rate implies a GGR of $279 million, a 23.1% increase from the prior year’s estimate, reflecting both higher handle and an improved hold margin.
Operators are looking for hold margins to continue the positive trend observed during the NFL season, which saw an improvement over the previous season, with many operators noting favorable outcomes contributing to increased margins. This was evident in Q4 hold rates across US states, which reached 10.8% this year, up from 8.1% in the prior year. Operators also benefited from favorable outcomes during Super Bowl LX, with an aggregated hold margin of 24.1% across the six states that released wagering data, despite handle being lower than expectations.
Tournament Overview and Basketball’s Market Share
In the men’s competition this season, the Michigan Wolverines and Duke Blue Devils open as pre-seeding favorites, both at +340. The Arizona Wildcats follow at +480, and the reigning champions, the Florida Gators, complete the current top four sides below +1,000, at +800. For the women’s tournament, the UConn Huskies are strong favorites to retain their title, currently at -320.
Basketball continues to be the most popular sport for bettors in the US, projected to account for 32% of the handle in the US sports betting market in 2025. H2 estimates that approximately 20% of the total basketball handle is generated from NCAA college basketball, distinct from the NBA and WNBA professional leagues. As with all sports, basketball betting is highly seasonal, with peak handle occurring in the first quarter of the year, culminating in March with the March Madness competition.
Broader Sports Betting Market Trends
While the overall regulated US sports betting handle continues to grow, the rate of growth has shown some moderation. December saw a 5% year-over-year growth, which included a boost from the launch of Missouri’s market; like-for-like growth was 2%. For Q4 as a whole, year-over-year growth stood at 14%. Total regulated US sports betting handle increased by 30% year-over-year to $19 billion. H2 forecasts continued growth in 2026, albeit at a lower rate, with handle projected to grow by approximately 17% year-over-year to around $22.2 billion, partly driven by a full year of the Missouri betting market’s operation.
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