AGA Flags Prediction Markets as Legal NFL Betting Growth Stalls

The American Gaming Association (AGA) estimates that $29.5bn will be bet legally on the 2026 NFL season in the US, projecting a negligible increase over 2025’s $29.4bn. This forecast signals stagnation in state-regulated handle, and the AGA attributes the slowdown in part to the growing influence of prediction market platforms, including Kalshi.

Stagnant Legal Betting Growth for 2026 NFL Season

For the first time since federal restrictions on sports betting were lifted, legal handle on NFL wagers has flatlined. The AGA’s $29.5bn projection for the 2026 NFL season includes pre-season games, all playoff rounds, the Super Bowl, and futures markets available months in advance. Compared to rapid growth years earlier—when operators saw double-digit gains—this represents what the AGA describes as “no growth in the legal, state-regulated betting handle.”

AGA Points to Prediction Markets as a Key Factor

AGA President and CEO Bill Miller publicly challenged the role of so-called backdoor sports betting, directly linking the proliferation of prediction markets to the stall in operator handle:

“But this year is different. Since the widespread launch of backdoor sports betting on so-called ‘prediction markets’, the growth of legal handle has stalled.” — Bill Miller, AGA CEO

Miller singled out Kalshi, a major prediction market operator, for broadening its sports offering and contended that these platforms are “misleading consumers by marketing sports wagers as an investment, rather than what it is: entertainment.” Miller further criticised these operations for marketing to younger demographics and avoiding the consumer protections mandated by state and tribal regulations.

Market Context: Handle, Trading Volume, and Operator Moves

The AGA highlights the contrast between betting handle, which tracks the total amount wagered through legal operators, and the trading volume reported by prediction market platforms. For instance, the 2027 Super Bowl market on Kalshi has already seen more than $82m in trading activity, while analytics platform DeFi Rate projects NFL-related prediction market trading volume across the season could reach $57bn. Still, the AGA cautions that “handle and trading volume are not truly comparable metrics,” since trading volume can reflect repeated wagering on the same event.

Mainstream US sports betting operators have taken note. DraftKings, FanDuel, and Fanatics have all exited AGA membership in pursuit of event contract business via prediction markets. DraftKings’ own Q1 2026 handle—spanning the NFL playoffs and Super Bowl—was up only 1.5% year-on-year to $14.1bn, a stark drop from the 15.7% handle increase in Q1 2025.

Legal and Regulatory Backdrop

Prediction markets are now available to US consumers for the first full NFL season, but their status remains contested. The Ninth Circuit Court of Appeals sided with Nevada in a legal challenge against Kalshi, but the Third Circuit supported Kalshi in an earlier dispute involving New Jersey, creating a federal circuit split. Reacting to this, New Jersey recently petitioned the US Supreme Court for a uniform ruling on the legality of sports event contracts.

State- and tribal-regulated sportsbook operators are subject to strict regulatory oversight and gaming taxes, which Miller contrasts with the more lightly regulated or exempt status claimed by prediction markets. The AGA warns that lack of regulatory accountability means consumers might place bets—sometimes as teenagers or first-year students—without the protections found in the legal, regulated ecosystem.

How Prediction Markets Could Reshape US NFL Betting

Prediction markets allow participants to trade on the outcomes of sports events, often under the regulatory umbrella reserved for event contracts rather than gambling. The 2026 NFL season, which starts on September 10, will be the first in which prediction markets operate nationwide throughout the campaign.

If venues like Kalshi achieve multi-billion dollar volumes, there could be further shifts in consumer behaviour and operator strategy. The AGA’s concern is that unless regulators clarify jurisdiction and enforcement, the gap between state-regulated sports betting and prediction markets will continue to widen.

Where Operators and Stakeholders Stand

The dynamic between traditional sportsbooks and prediction markets will likely intensify as legal challenges play out. Operators focused on sports betting face a marketplace in flux, while state regulators must address the evolving definition of what constitutes a bet and who is responsible for consumer protection.

Looking ahead, Super Bowl markets and integrated prediction exchanges represent a new competitive layer for US betting operators, and clarity on legal status will be crucial for future growth.