March Madness 2026 Betting Handle May Fall for the First Time Ever

Every March, the sports betting world gets its biggest moment of the year: the NCAA Tournament, better known as March Madness. For eight straight years since sports betting was legalized across the U.S. in 2018, the amount of money wagered on the tournament has gone up, up, and up. But 2026 might be different — and the reasons why are worth paying attention to.

A Bank Is Projecting a Drop — That’s a Big Deal

Citizens Bank, one of the more independent financial institutions that analyzes the gambling industry, has projected that the legal betting handle for the 2026 NCAA Tournament will come in at around $3 billion. That would be a 3% year-over-year decline from 2025 — and if accurate, it would be the first time that number has ever gone down since sports betting exploded nationally.

To put that in perspective: the American Gaming Association (AGA), which represents the major sportsbooks and is more bullish on the industry, projected $3.3 billion in legal bets — slightly higher than their $3.1 billion estimate from 2025. Meanwhile, H2 Gambling Capital, an industry consulting group, pegged it at $4 billion, forecasting a 6.7% increase.

So who’s right? The honest answer is: nobody knows for sure. States don’t report tournament-specific betting data — we only get monthly revenue figures after the fact. But the fact that an independent bank is projecting a decline is notable, and there are some concrete reasons behind it.

Why Betting Might Be Slowing Down

Citizens Bank analyst Jordan Bender points to a few key factors driving the projected dip:

Post-NFL/Super Bowl hangover. Online sports betting engagement tends to drop after football season ends. FanDuel actually reported weak growth in betting handle toward the end of the NFL season because customers had lost so much money — particularly through high-margin parlays — that they pulled back. When bettors lose big, they often take a breather.

Prediction markets taking a slice. Platforms like Kalshi and Polymarket allow users to bet on sports outcomes but operate outside traditional sportsbook regulation. They’re not included in the standard handle estimates, so when money flows there, it doesn’t show up in the official numbers. A recent poll found that only about 3% of Americans have used a prediction market, but that’s still millions of people.

Market maturity. The legal sports betting industry doesn’t have many new states to launch in anymore. Missouri was a rare new market in 2025, but most major U.S. states with the appetite for sports betting already have it. There’s a growth ceiling developing.

Tax hikes getting passed to bettors. Cities like Chicago have implemented higher sports betting taxes, and sportsbooks have responded by adjusting odds and margins. When your expected payout gets a little worse, you might bet a little less.

What This Means If You’re a Recreational Bettor

If you’re someone who tosses $50 on the bracket and maybe a few game bets during March Madness, none of this changes your experience directly. But it’s useful context.

The fact that sportsbooks crushed users with high-margin parlays — and then saw engagement drop — is a reminder of something we always say here at Hello Rookie: parlays are fun, but they are designed to be hard to win. When too many bettors lose too much too fast, even they eventually stop betting so aggressively.

One study found that just 4% of online sports bettors actually win money over time. Another analysis of Kalshi users found an expected return of -22% after fees. These numbers aren’t meant to scare you — they’re meant to calibrate expectations. Sports betting is entertainment with a cost, and the smarter you are about it, the longer and more enjoyably you can participate.

The Sweet 16 Is Still Worth Watching (and Betting)

Despite the macro trends, the 2026 tournament has been exciting. The Sweet 16 is underway, and favorites have generally covered — going 29-19 against the spread through the first two rounds, with 37 games won outright by the higher seed. That’s a chalky tournament, which often means the betting public’s favorites are winning, and sportsbooks are paying out more than usual on those popular sides.

If you’re still looking to place a bet on remaining tournament games, here’s a quick framework for thinking about it:

• Follow line movement. If a point spread moves significantly from when it opened, sharp bettors (the pros) have put money on one side. That’s worth noticing.
• Avoid big parlays. A five-team parlay on March Madness is exciting but extremely difficult to win. Two or three-game parlays with realistic odds are smarter for your bankroll.
• Check player availability. The NCAA now requires teams to report player availability specifically to reduce betting pressure on athletes — and those reports are public. Use them.

The Big Picture

Whether the March Madness handle drops by 3% or rises by 6% this year, the sports betting industry remains enormous. Billions of dollars will be wagered legally during the tournament. But the era of guaranteed explosive growth may be slowing down — and that’s actually not a bad thing for bettors. A more mature market tends to mean more competitive odds, better promotions to attract and retain customers, and hopefully more responsible product design.

The sportsbooks that crushed their customers with parlay-heavy marketing in recent years are now seeing those same customers pull back. The lesson is simple: treat your betting bankroll like you’d treat entertainment spending, not an investment. Set a budget, stick to it, have fun — and you’ll be the rare bettor who actually enjoys March Madness no matter what happens on the court.