Online Sports Betting Handle Is Declining Amid Prediction Markets Growth

Posted on: April 20, 2026, 01:19h. 

Last updated on: April 20, 2026, 01:19h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.
  • Prediction markets are likely poaching play from online sportsbooks
  • Prediction markets continue to face scrutiny for their sports contract trading

Online sports betting is being overshadowed by the continued, rapid rise of prediction markets.

online sports betting handle prediction markets
A mobile phone shows an app download for Kalshi, an online prediction market site. Online prediction market platforms allow people to place bets on wide-ranging subjects, including sports, finance, politics, and current events. Prediction markets are likely cutting into online sports betting revenue. (Image: Getty)

Gaming analysts are projecting that once first-quarter results for commercial sports betting states where online wagering is allowed are released and tallied nationwide, handle, or the amount of money bet, will be down year-over-year. John DeCree, CBRE’s director of global gaming research, wrote in a note on Monday that same-state online sportsbook (OSB) handle declined 2.3% in January and February.

Initial reports from March suggest that trend has continued. Assuming same-state OSB handle remains down in March, it would be the fourth consecutive month of year-over-year handle declines,” DeCree explained.

DeCree said that while there could be several factors for the same-state sports betting declines, it’s hard to overlook the timing coinciding with the “exponential acceleration in sports contracts volumes.”

Prediction Markets Trading

Late last year, prediction markets, federally regulated trading exchanges that facilitate the buying and selling of yes/no shares on event outcomes, began dabbling in contracts involving sports.

State attorneys general, gaming regulators, and both federal and state lawmakers have argued against prediction markets offering sports contracts. They claim that trading impedes a state’s right to dictate which forms of gambling and betting are allowed within its jurisdiction.

Prediction markets like Kalshi, DraftKings Predictions, and FanDuel Predicts allow their online platforms to take sports contract trades in states where online sports betting remains illegal. Under the second Trump administration, the Commodity Futures Trading Commission has moved to solidify the rights of prediction markets to offer sports trading.

Regardless of the legality and future of prediction markets trading sports contracts, DeCree says, at least for now, the exchanges are cutting into OSB handle.

Some OSB operators have estimated prediction markets could be having a low to single-digit impact on volumes. However, the data suggests the impact could be greater,” DeCree explained. “Monthly same-state OSB handle had been growing at a double-digit pace through November 2025 before turning negative in December.”

The topline handle is naturally impacting bottom lines and margins for online sportsbooks. BetMGM said it’s spending more on customer acquisition and retention, while DraftKings and FanDuel have reported increased costs related to their prediction market startups.

iGaming the Better Bet

DeCree said the iGaming market, though limited to just eight states, remains strong and “presents the better long-term opportunity” for online gaming operators.

CBRE estimates iGaming revenue will grow almost 22% in the first quarter, and even the most mature markets, including Pennsylvania (+17%) and New Jersey (+19%), continue to expand.

“Long-term, there remains ample untapped white space for additional state legalization,” DeCree continued.

Only one state has joined the iGaming market this year in Maine.