The 2026 football season should be the best one yet — at least through a financial lens, so writes analyst Jordan Bender of Citizens.
In an industry note Tuesday, Bender wrote that his team expects $35 billion in regulated sportsbook football handle, up 5% from last year. The number is higher than than the American Gaming Association’s projection of $29.5 billion, which would be flat against 2025.
Bender’s team sees growth across verticals and believes that this year will be different as prediction markets continue to expand and are a key topic. Citizens is projecting $400 billion in prediction market volume through the Super Bowl and up to $800 billion for 2027, inclusive of the 2026-27 postseason and Super Bowl and the fall 2027 season. The team further breaks the $400 billion number down, writing that $250 billion will be “total consumer volume,” which they say is “equivalent to the size of the legal online sports betting (OSB) market in the United States.”
The NFL season kicks off Wednesday with a Super Bowl rematch when the New England Patriots play at the Seattle Seahawks, then continues Thursday when the San Francisco 49ers and Los Angeles Rams play at the Melbourne Cricket Ground in Australia. The first full day of games will be Sunday.
Prediction cannibalization may be waning
Prediction market cannibalization is “not getting worse, potentially is even easing,” Bender wrote based on an analysis of customer wallets. Other insights include “evidence that wallets split between the PM and OSB are expanding” and that competition for new customers as well as “self-inflicted wounds” have been driving down online sports betting handle. Juice Reel shows that 4% of online sports betting handle has moved to prediction markets, and that there was a “notable slowdown” in overall and per-user handle between December 2025-February 2026, when Kalshi first started offering sports event contracts.
For players splitting their wallets between predictions and online sports betting, the average increase in wallet was 27% in the first six months.
“Prediction market companies such as Kalshi are successfully using marketing initiatives to bring new customers into the ecosystem who otherwise may not have entered the industry or would have eventually gravitated toward sports betting apps,” the Citizens note reads. “Cannibalization not getting worse and customers spending more is a bullish signal heading into the NFL season.”
Bender believes handle will increase as the industry readjusts during the second NFL season with sports betting at prediction markets and the “market leader” (FanDuel) addresses its “self-inflicted mistakes.” FanDuel CEO Peter Jackson said during the company’s fourth-quarter earnings call in February that it failed to properly execute a consistent bonus strategy.
“Generosity was on, it was off, it was on, it was off,” Jackson, who will be stepping down as CEO at the end of this month, said in February. “We were not deploying it effectively,” making it more difficult for consumers to stay engaged with the platform.
Success isn’t just about market share
Some other Citizens observations:
- Citizens points to 16 fewer games than last in September due to the late start to the season, which would mean a 10%-15% decrease in handle.
- Prediction market success should not be measured by market share, Bender wrote. Rather, as with online sports betting, he said, “product and technology matter as much as scale,” and that an increase in stock price and sustainable cash flow can be considered wins and indicators of future success.
- Investors should consider key differences between private and publicly traded companies as well as capital investment and other factors when rating a prediction platform.
“We expect a noisy and highly competitive NFL season (favoring Genius Sports), but we believe there is ample opportunity for multiple players to emerge as long-term winners rather than a single winner being determined this season,” Bender wrote.
AGA views prediction markets as predatory
The AGA highlighted its view that prediction markets are significantly cutting into sportsbook handle. CEO Bill Miller called the platforms “backdoor sports betting” and because of this, “the growth of legal sports betting has stalled.”
The industry group wrote in its press release that legal sports betting is maturing while prediction markets are expanding, and that “Sports bets make up about 80% of Kalshi’s volume, which includes an estimated $5.1 billion in volume from users between the ages 18-20, which is below the legal age in 35-of-40 jurisdictions where sports betting is legal.”
The AGA, which has written amicus briefs in several cases against prediction markets and has been lobbying in Congress and across the country in support of legal sports betting, leaned into the argument that prediction markets are exploiting consumers and ignoring state and tribal sports betting regulation.
“These ‘prediction market’ platforms are dangerously misleading consumers by marketing sports wagers as an investment, rather than what it is: entertainment,” Miller said. “Kalshi and other ‘prediction markets’ say they don’t need to follow state- and tribal-regulated sports betting laws or pay state gaming taxes. Their defiance means consumers, including teenagers and freshmen, placing bets without the protections, oversight, and accountability that the legal market provides.”
