The upcoming NCAA basketball tournaments are projected to generate unprecedented wagering activity in the United States, with analysts forecasting billions of dollars in bets during the annual March Madness event.

According to research from H2 Gambling Capital, sportsbooks across the country could accept roughly $4 billion in wagers on the men’s and women’s tournaments this year. That estimate represents an increase of about 6.7 percent compared with the roughly $3.7 billion bet during the 2025 edition.

The tournaments begin with early games on March 17, while the first full round of action starts on March 19. The competition spans about three weeks and has become one of the busiest periods for betting operators across both online and retail platforms.

“H2 estimates 2026’s event to grow on the record levels seen in the prior tournament as a result of continued handle growth across U.S. states, coupled with the launch of Missouri betting market in December,” the research firm said in its report (pdf), which was being released this week.

Although 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 stands out because of its sustained volume of betting across dozens of games. H2 notes March Madness is “the most bet on event in the U.S. sporting calendar,” thanks to the large number of matchups played throughout the tournament.

Prediction Markets Expand the Total Betting Picture

While regulated sportsbooks account for the bulk of betting, prediction markets are emerging as another avenue for wagering on tournament outcomes. These exchanges allow participants to trade contracts tied to event results, including which team will win the championship. Their activity has expanded since last year’s tournament, when sports-related contracts were still relatively new.

H2 estimates that prediction markets could produce about $530 million in what it calls the equivalent of sportsbook handle for the 2026 tournament. If those projections materialize, overall wagering connected to March Madness could approach $4.5 billion. There is an important distinction between the two measures. Prediction market volume counts both sides of a trade, while sportsbook handle reflects only the bettor’s stake. For example, purchasing a “yes” contract for 20 cents would count as a full dollar in volume, whereas a $50 bet at a sportsbook would register as $50 in handle.

The legality of these contracts remains under dispute in multiple states. Regulators in several jurisdictions argue the exchanges offer unlicensed gambling products that bypass state oversight and taxation. Operators of the markets contend they operate under federal supervision from the Commodity Futures Trading Commission. Despite the legal challenges, contracts tied to the college basketball tournaments remain available nationwide this year.

Limited Impact on Sportsbooks in Legal Betting States

Analysts expect prediction markets to have a different influence depending on whether a state already permits sports betting through licensed operators.

“Under the assumption that prediction markets over-index in those states where there is no legal sportsbook competition, the impact of prediction markets in states where legal sportsbooks operate is much lower,” the report said. “On that basis, H2 estimate that prediction markets are likely to generate a ‘handle equivalent’ volume of c.$135-150m in states where there is legal sports wagering.”

That amount would represent roughly 3.5 percent of the projected $4 billion sportsbook handle. The firm said the share of gaming revenue would be even smaller.

“Therefore, if there is any softness in wagering for traditional sportsbooks, in our view it would be disingenuous to blame it on the presence of prediction markets in those states,” the report added.

Tournament Betting Behavior and Sportsbook Margins

The event also influences betting patterns among players. Data from the analytics app Juice Reel suggests that bettors tend to increase their activity during the tournament window. During last year’s 22-day tournament stretch, the average bet recorded by Juice Reel users was $36.50, with a median betting handle per user of $5,127. In the 22 days before the tournament, those figures were slightly different: an average bet of $43.27 and a median handle of $5,042. The data also shows that many participants enter the betting market only for the tournament itself. Juice Reel reported that 12 percent of March Madness bettors placed no wagers during the pre-tournament period.

Sportsbooks also face unique financial dynamics during the college basketball tournament. Hold percentages, essentially the share of wagers retained as revenue, often run lower than those seen in professional leagues. One reason involves the structure of bets. College basketball players are less widely recognized than professional stars, which leads to fewer player-prop wagers and same-game parlays. Because of that, sportsbook results can hinge on whether favorites advance through the bracket. H2 expects sportsbooks to record a hold rate of about 7 percent during the 2026 tournament. That would be higher than last year’s estimated 6.1 percent, a season in which all four No. 1 seeds reached the Final Four for only the second time.

Combining the projected handle and margin suggests sportsbooks could generate approximately $279 million in gross gaming revenue from the event, representing an increase of more than 23 percent compared with the previous year. Operators hope those results will mirror trends seen during the recent NFL season, when favorable game outcomes helped raise hold rates across several states.