177% up to 5BTC + 77 Free Spins!
New players only. Exclusive Welcome Bonus of 177% + 77 Free Spins
H2 Gambling Capital expects prediction markets to eat into U.S. sportsbook betting during the 2026 NFL season, enough to offset underlying growth in football wagering.
Good to Know
Demand for NFL betting would grow by roughly 4% without competition from sports event contracts, according to H2. Instead, the firm expects traditional sportsbook handle to record a small annual decline.
Prediction markets now represent another route for football wagering, including in states without regulated online sportsbooks. H2 estimates sports event contract volume at around 35% of the combined sportsbook and prediction market wagering pool on a handle equivalent basis.
Most activity remains concentrated outside legal sportsbook states. However, H2 estimates prediction market consumer handle equals 8% to 11% of sportsbook handle in competitive legal markets.
“We assume that rate holds,” H2 said.
Florida, New Jersey and New York show some of the highest overlap. Kalshi and Robinhood have developed large user bases in those markets.
Age rules also create a separate customer pool. Prediction markets can serve users aged 18 to 20 in jurisdictions where licensed sportsbooks generally set the minimum age at 21. H2 also pointed to brokerage users, closed sportsbook accounts, self excluded bettors and customers treating contracts more like investments.
H2 expects those groups to account for 50% to 60% of substitution from sportsbooks.
H2 forecasts an NFL sportsbook hold near 10.9% and gross revenue of about $3.5 billion from August through February, down 2% annually.
Operators recorded an 11.4% football hold last season, compared with 8.6% in 2024 to 2025 and 8.9% one season earlier. H2 does not expect sportsbooks to repeat that unusually favorable result.
Parlays remain important to sportsbook margins, but higher operator win rates can reduce future betting volume because less money returns to customers for additional wagers.
Missouri adds another source of sportsbook growth after launching legal wagering in December 2025. H2 expects the state to produce about $2 billion in handle during its first full NFL season.
Including college football, H2 forecasts $42.1 billion in total football sportsbook handle and $38.5 billion across states that publicly report betting data.
The American Gaming Association reaches a similar conclusion using a narrower measure. It forecasts $29.5 billion in 2026 NFL wagers through regulated commercial sportsbooks, nearly unchanged from $29.4 billion in 2025. H2 includes Florida, where sports betting handle data is not publicly reported.
September data could give an early indication of how much activity prediction markets are taking from sportsbooks.
H2 already expects NFL handle to fall around 25% annually during the month because September 2026 contains three NFL Sundays rather than four. A much deeper decline could indicate greater displacement than H2 currently models.
December and January should benefit from calendar timing, including Weeks 17 and 18. Another run of sportsbook friendly NFL results could lift gross revenue while reducing the money customers recycle into later bets.