NFL Sportsbook Handle Forecasted to Decline as Prediction Markets Gain Ground
Key Points
- H2 projects U.S. sportsbooks will take $31.4 billion in NFL wagers during the 2026-27 season, down 0.8% from last season.
- The firm estimates prediction markets are displacing roughly 4%-6% of sportsbook handle in states where the products compete.
- H2 still sees underlying betting demand growing around 4%, suggesting bettors are wagering more overall even as a smaller share flows through traditional sportsbooks.
H2 Forecasts $31.4B in NFL Sportsbook Handle as Prediction Markets Cut Into Growth
H2 Gambling Capital expects U.S. sportsbooks to handle $31.4 billion in NFL wagers from August through February, a 0.8% decline from the $31.7 billion it estimates was wagered last season.
If the forecast holds, it would mark the first year-over-year decline in NFL handle since legal sports betting began expanding across the country.
Sportsbook revenue is also expected to fall. H2 projects roughly $3.5 billion in gross revenue, down 2% from last season, based on an expected NFL hold of about 10.9%.
But H2 does not believe Americans are suddenly betting less on the NFL.
It estimates underlying wagering demand is still growing by around 4%, while Missouri should provide another boost as it enters its first full NFL season with legal online sports betting.
The problem for sportsbooks is where some of that additional betting activity is going.
H2's report concludes that sports event contracts are absorbing enough NFL wagering volume to more than offset those gains, leaving traditional sportsbook handle lower even as overall demand continues to rise.
H2 Estimates 4%-6% of Sportsbook Handle Is Being Displaced
In states where sportsbooks and prediction markets directly compete, H2 estimates event contracts are displacing approximately 4%-6% of sportsbook handle.
The effect could be considerably larger in Florida, where Hard Rock Bet remains the only licensed online sportsbook while prediction market products provide bettors with additional ways to trade sports outcomes.
That estimate is important for another reason: H2 is attempting to measure actual substitution rather than simply comparing two fast-growing pools of wagering activity.
A large share of prediction market sports volume comes from states without regulated online sportsbooks, where there is no existing legal sportsbook handle to cannibalize. H2 estimates 70%-80% of prediction market volume still originates in those markets.
In states where sportsbooks and prediction markets operate side by side, H2 estimates prediction market activity is already equivalent to roughly 8% to 11% of sportsbook handle.
Not all of that represents money that would otherwise have gone to sportsbooks. After stripping out users and trading activity that H2 considers genuinely incremental, the firm estimates prediction markets are displacing around 4% to 6% of sportsbook handle.
Those numbers still need to be treated carefully.
Prediction market trading volume is not measured in the same way as sportsbook handle, so H2 converts it into what it calls a “handle-equivalent” figure to make the two markets more comparable.
The result is an estimate of market displacement, not a direct record of bettors moving individual wagers from DraftKings to Kalshi.
Prediction Markets Now Represent a Meaningful Share of the Wider Betting Pool
On H2’s handle-equivalent basis, sports event contracts now represent roughly 35% of the combined sportsbook and prediction market wagering pool.
That does not mean prediction markets have captured 35% of existing sportsbook business. Much of their volume comes from bettors in places where conventional online sportsbooks are unavailable, while some comes from customers or trading behavior that may never have reached sportsbooks in the first place.
Still, the overlap is becoming difficult to dismiss.
H2’s forecast arrives as the American Gaming Association is independently projecting an unusually flat NFL season for regulated sportsbooks. The AGA expects $29.5 billion in legal NFL wagering, compared with its revised estimate of $29.4 billion last season. The organizations use different methodologies and arrive at different totals, but both forecasts point toward a sharp slowdown after years of expansion.
That puts more pressure on actual state results over the next several months. A market that once grew largely by adding states and bringing more bettors online now has a new variable competing for the same football audience.
September Numbers Could Make the Decline Look Worse Than It Is
The first month of football will require particularly careful reading.
H2 expects sportsbook NFL handle in reporting states to decline roughly 25% year over year in September, but says much of that drop comes from the calendar. The 2026 NFL schedule leaves fewer Sundays inside September than last season, shifting wagering volume into later reporting periods.
That makes September a poor month for declaring victory for either side of the sportsbooks vs prediction markets debate.
The more useful test will come as several months of state sportsbook data accumulate. If handle continues undershooting what normal demand growth and calendar effects would imply, H2’s displacement estimate will have considerably stronger evidence behind it.
Why This Matters for Bettors
Sportsbooks have spent years competing primarily with one another on price, promotions, market depth and product features. Prediction markets now give some of those same customers another place to put money on NFL outcomes, including in markets where bettors already have access to several licensed books.
That competition can benefit users. Operators have more reason to improve pricing, promotions and product quality when customers have credible alternatives. A bettor who previously compared FanDuel against DraftKings may increasingly compare both against an event contract price as well.
The products are still structured differently, however. Sportsbook odds, exchange-style contract prices, fees, liquidity and settlement mechanics can produce different effective prices even when two markets appear to cover the same outcome. Bettors looking for value will need to compare the actual return rather than assuming a superficially similar contract is interchangeable with a sportsbook wager.
The bigger industry question is whether H2 has correctly identified a structural change in where American sports wagering takes place.
A 0.8% decline would look minor on its own. It becomes much more significant if underlying demand is simultaneously increasing around 4%. In that scenario, sportsbooks would be losing share of an expanding betting market rather than simply suffering through a weak NFL season.
That would affect how operators think about customer acquisition, retention and promotional spending. Sportsbooks accustomed to fighting over share within a state-regulated market would increasingly be competing with platforms operating under a different federal framework and, in some jurisdictions, reaching customers the sportsbook industry cannot.
There is also an obvious regulatory dimension. The larger sports event contracts become as a share of actual wagering activity, the harder the dispute over their legal status becomes for regulators, lawmakers and sportsbook operators to treat as a niche argument.
H2 has supplied the industry with a measurable forecast: sportsbook demand should be stronger than the final handle numbers suggest because a portion of that demand is going somewhere else. State reporting over the rest of the NFL season will provide the first meaningful opportunity to see how well that theory holds up.
What Happens Next
October state reports will provide the first major batch of NFL-era sportsbook data, although September’s calendar distortion means one month will not settle the question.
The stronger evidence will come from several months of results in large competitive markets such as New York and New Jersey, where bettors have access to both established sportsbooks and sports event contracts.
If sportsbook handle persistently trails underlying betting demand while prediction market sports activity continues growing, operators will have stronger reason to treat those platforms as direct competitors rather than adjacent products.
H2’s 4%-6% displacement estimate gives the industry a benchmark. The NFL season will now test it.
Cole cut his teeth as a sportswriter in Texas, covering everything from Longhorns games to small-town Friday night lights. A lifelong bettor stuck with offshore books for over a decade thanks to Texas' slow path to legalization, he eventually found his way into the world of social sportsbooks - where he uncovered a fast-growing, community of bettors.
Today, he writes for the millions of Americans in states without legal books, helping them explore safe ways to bet without running afoul of the law.
As editor-in-chief, he aims to keep BettingScanner honest, human, and grounded in what bettors actually care about: fairness, fun, and finding your lane - even when the state won’t give you one.
