Legal sports betting on the NFL is projected to reach $29.5 billion for the season. That marks a modest 0.3% increase from last year’s $29.4 billion total, according to annual estimates released by the American Gaming Association (AGA) on September 4. The minor growth rate highlights a broader deceleration in the regulated market as state-regulated sportsbooks face mounting competition from prediction markets.
The Slowdown Facing Regulated NFL Books
The updated projections cover preseason action, futures wagers placed as early as March, upcoming playoff games, and Super Bowl LXI in February 2027. According to ESPN reporting, the amount wagered at US sportsbooks grew by just 4% between September and May, down sharply from a 14% growth rate recorded during the same period a year earlier. While Missouri stands as the only state to legalize sports betting since 2025, the AGA points to an alternative disruption for the flattening handle.
Prediction Markets and the Regulatory Divide
Bill Miller, president and chief executive officer of the AGA, stated in an association release that the growth of legal betting volume has stalled due to the proliferation of sports betting on prediction markets. Miller added that these platforms present sports wagering as an investment rather than entertainment and bypass state and tribal regulations. According to AGA figures, sports betting accounts for approximately 80% of Kalshi’s volume, including $5.1 billion generated from users aged 18 to 20 who fall below the legal gambling age in most regulated jurisdictions. The AGA estimates that platforms like Kalshi and Polymarket have diverted over $1.3 billion in potential state tax revenue since 2025 from a regulated industry that generates roughly $18 billion annually in taxes and supports 1.8 million jobs.
Surging Volume in Untapped States
In contrast to the AGA’s cautious outlook, industry research firm Eilers & Krejcik Gaming reported that the volume of NFL betting on prediction markets in August was 4.6 times higher than the previous August. Projections from the firm indicate that the seasonal total could reach approximately $36.8 billion, with analysis showing that 44% of that volume originates from California and Texas alone, and 69% comes from states where traditional sports betting remains illegal. Industry analysts note that prediction market volume measures contracts changing hands repeatedly rather than capital staked just once, making direct comparisons to sportsbook handle misleading.
Escalating Court Battles and League Pushback
Regulatory and legal battles surrounding prediction markets continue to escalate across federal and state courts. A federal appeals court ruled that Nevada can enforce its gambling laws against Kalshi’s sports contracts, while New Jersey petitioned the Supreme Court on September 2 to resolve a jurisdictional split regarding state authority over such platforms. The NFL has also engaged directly with the issue; according to a letter obtained by ESPN, league chief compliance officer Sabrina Perel wrote to prediction market operators last week calling the listing of sports-related contracts deeply concerning.