Prediction Markets Are Impacting Sports Betting. Football Season Will Reveal How Bad

The NFL and college football seasons are expected to reveal the extent to which prediction markets are impacting sportsbooks.

Since prediction markets began offering trading on events involving sports outcomes in 2025, the gaming industry has cried foul over claims that the financial exchanges were unlawfully poaching customers from sportsbooks. With the NFL and college football seasons having kicked off, the coming months should paint a more accurate picture of whether the claims are grounded in reality.  

Prediction markets allow traders to buy and sell shares of sports outcomes, like whether the Kansas City Chiefs will win tonight (Sept. 14) on “Monday Night Football.” The American Gaming Association (AGA), which represents the regulated sports betting industry, believes prediction markets are hurting sportsbooks, recently suggesting that legal betting on the NFL this year will stall for the first time since 2018.

Calling sports prediction markets “backdoor sports betting,” AGA President and CEO Bill Miller said the platforms regulated by the Commodity Futures Trading Commission are “dangerously misleading … by marketing sports wagers as an investment.”

The NFL regular season began last week, and with college football two weeks in, September could provide more clarity into the impact that prediction markets are having on sports betting.

New York Reports Decline

New York is the largest sports betting state, with bettors placing a record $26.3 billion in bets in 2025. Oddsmakers kept $2.55 of the bets, also an all-time high.

New York collected $1.32 billion in 2025 tax revenue from sports gambling. Those funds could be at risk, as prediction markets, which aren’t subject to state gaming taxes or fees, continue to gain traction.

New York has experienced continued sports betting growth through July, with several months reporting handle upwards of $2 billion. The World Cup was credited for the early summer surge by bringing in new customers to the legal sportsbook market.

August, however, told a different story. Handle, or the amount bet, dropped 15.3%, marking just the second time in the history of New York sports betting that monthly handle was lower compared with the same month in the prior year.

Mobile oddsmakers in New York took $1.73 billion in wagers, $313 million less than they did in August 2025.

Some sports betting fatigue could have lingered after the World Cup concluded in July, with bettors looking to the start of the NFL and college football seasons. The months ahead, however, will tell if the AGA’s forecast of stagnating sports betting is accurate.

New Jersey, one of the top three sports betting states, has already experienced a pullback. Through July, handle was almost 4% lower.

Prediction Market Volume

During the first NFL Sunday of the regular season, sports prediction markets saw unprecedented volume.

Publicly available data compiled by TicketTracker, a prediction market data aggregator, reported that more than $5 billion in contracts were traded on Saturday (Sept. 12) and Sunday (Sept. 13) alone. The weekend was the prediction market industry’s two largest trading days of all time.