Legal Sportsbooks Anticipate $29.5 Billion Handle While Industry Leaders Warn of Unregulated Backdoor Platforms Siphoning Tax Revenue and Bypassing Age Limits
According to projections from the American Gaming Association (AGA), Americans are estimated to legally wager $29.5 billion on the 2026 NFL season through U.S. regulated commercial sportsbooks. This forecast points to virtually flat growth in the legal, state-regulated betting handle when compared to last season’s $29.4 billion figure. While millions of Americans continue utilizing legal and state-regulated sportsbooks to enhance game-day engagement, the broader landscape is shifting as “prediction markets” rapidly expand backdoor sports betting offerings across all 50 states and Washington, DC.
Bill Miller, AGA President and CEO, addressed the shifting market dynamics:
“We’re excited for the NFL season to kickoff, as are millions of fans eager to engage with their favorite teams. Since the Supreme Court struck down the federal sports betting ban in 2018, legalized sports betting had seen tremendous growth. But this year is different. Since the widespread launch of backdoor sports betting on so-called “prediction markets,” the growth of legal handle has stalled.”
Regulatory Challenges and Economic Impact
Platforms operating as prediction markets function outside the established regulatory frameworks governing sports betting across the 40 jurisdictions where it is legal, while simultaneously bypassing prohibitions in the 11 states that have chosen not to legalize the practice. Since the start of the previous football season, legal commercial sports betting handle growth has decelerated significantly amidst market maturation and nationwide sports offerings from prediction platforms.
Data indicates that sports bets comprise approximately 80% of Kalshi’s total volume, which includes an estimated $5.1 billion generated from users aged 18 to 20, falling below the legal betting age in 35 of the 40 jurisdictions where sports betting is authorized.
While the legal, regulated gaming industry supports 1.8 million jobs and generates roughly $18 billion annually in sports betting tax revenue for essential community projects like education, infrastructure, and public services, prediction markets such as Kalshi and Polymarket are estimated to have siphoned more than $1.3 billion in potential state gaming tax revenue since 2025.
As the NFL season commences, the AGA is actively urging fans to differentiate between licensed sportsbooks, prediction markets, and other illicit operators, encouraging wagers to be placed strictly with legal state- and tribal-regulated entities.
Miller further emphasized the risks posed by these alternative platforms:
“These “prediction market” platforms are dangerously misleading consumers by marketing sports wagers as an investment, rather than what it is: entertainment. Kalshi and other “prediction markets” say they don’t need to follow state- and tribal- regulated sports betting laws or pay state gaming taxes. Their defiance means consumers, including teenagers and freshmen, placing bets without the protections, oversight, and accountability that the legal market provides.”
