March Madness handle to decline in 2025

According to insights from H2 Gambling Capital, the handle for March Madness is projected to experience a slight decline in 2024 compared to previous years. This article delves into the handle and Gross Gambling Revenue (GGR) growth rates, along with potential influences from this iconic tournament.

The NCAA Men’s and Women’s Basketball tournaments, commonly referred to as March Madness, commenced last week, heralding the onset of the most heavily wagered event in the United States sporting calendar. While the Super Bowl commands the highest one-off betting activity—an estimated $1.6 billion wagered on Super Bowl LIX—basketball is a significant player, accounting for more than one-third of total U.S. betting handle.

This prestigious tournament historically provides operators with an excellent opportunity to expand their customer base and enhance overall betting volume during its three-week run.

H2 Gambling Capital estimates that approximately 169 million bets will be placed during March Madness this year, yielding a total handle of $2.9 billion. This figure reflects a modest decrease of 1.5% from the previous year’s tournament, concluding a streak of consistent growth over the past several years.

Looking ahead to 2025, analysts anticipate further slowdown in event handling due to declining growth rates experienced in the preceding months. Furthermore, the absence of new state launches for online sports betting—unlike the last tournament, which benefited from North Carolina’s launch—poses additional concerns for future growth.

The so-called “Caitlin Clark effect” significantly bolstered the betting handle in 2024, showcasing how prominent player performances can influence market dynamics. It is also important to note that these figures don’t account for bets placed on prediction or sweepstakes markets, which can siphon engagement away from the regulated wagering segments.

March Madness Hold Rates: A Comparative Analysis

Typically, March Madness sees lower hold rates compared to various professional sports, attributable mainly to the reduced popularity of same-game parlays and individual player props due to lesser-known athletes in the collegiate arena. For instance, Vermont recorded a mere 1.14% hold rate during last year’s tournament, contrasting sharply with an 11.03% hold rate for all sports bets combined over the same timeframe.

This season, H2 forecasts a hold rate of 7.8%, a slight uptick from the 7.5% recorded last year. When applied to our handle estimates, this hold rate suggests a GGR of $223 million, indicating a healthy $7 million increase over the prior year’s projections. This boost in revenue demonstrates that improved hold margins can counterbalance slight decreases in overall handle.

Operators are optimistic about achieving a better hold rate after experiencing persistently low margins during the NFL regular season. Nonetheless, the commencement of 2025 appears brighter, largely driven by the Super Bowl’s strong performance, amplified by successful player props.

In the context of March Madness, the outcome of matchups will play a crucial role in influencing operators’ hold margins. Underdog victories tend to provoke excitement and drive engagement, thereby enhancing profitability.

Identifying the Favorites: March Madness 2024

The current season’s Men’s bracket features four number-one seeds firmly positioned as favorites. The Duke Blue Devils lead the pack at +300, buoyed by their star player, Cooper Flagg, who is anticipated to return for Duke’s opening match after an ankle injury.

The Women’s tournament sees the South Carolina Gamecocks poised to defend their title, holding a slight edge over the UConn Huskies at +240 and +260, respectively. The women’s competition witnessed a surge in popularity last season, contributing to 12.5% of Vermont’s overall March Madness handle in 2024.

Basketball: A Pillar of the U.S. Betting Market

Basketball remains a linchpin for bettors in the United States, contributing 32% of the overall handle within the sports betting landscape as of 2024. Notably, around 16% of basketball’s total handle is attributed to NCAA college basketball, distinguishing it from professional leagues like the NBA and WNBA.

As with all sports, basketball’s betting activity is seasonal, peaking during the initial quarter of the year, particularly in March amidst the excitement of March Madness.

Recent trends indicate a deceleration in total U.S. betting handle growth. The final quarter of 2024 saw a 23% growth rate, declining from the previous year’s 43%. December was particularly subdued, registering only a 14% increase compared to the impressive 52% growth witnessed in December 2023.

Despite these fluctuations, total regulated U.S. sports betting handle expanded by 39% year-on-year, reaching $14.6 billion. H2 forecasts sustained growth into 2025, albeit at a moderated pace, anticipating an approximate 25% year-on-year increase toward $18 billion. This growth projection is partially contingent on forthcoming state launches in Nebraska and potential developments in Missouri, anticipated to enhance organic same-state market growth.