Kalshi hits March Madness record with US$800 million traded

Charlotte Capewell

25 March 2026 at 7:04am UTC-4

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Despite pushback from the NCAA, prediction market Kalshi has come away from March Madness a winner with trading reaching over US$800 million in the first weekend of the tournament.

This figure nearly doubled the amount traded on all three weeks of last year’s competition, according to Bloomberg. In the first two rounds alone last year, Kalshi customers traded US$208 million on March Madness-related contracts.

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On top of that, Kalshi also announced its Billion Dollar Bracket, which awards a US$1 billion prize for a perfect bracket, with US$1 million for the leading entry if no participant correctly picks all 63 games.

Looking at data from Dune Analytics, Kalshi’s total handle last week topped US$3.4 billion, with US$1.6 billion of that being generated from basketball-related contracts.

The figures come as prediction markets solidify themselves as alternatives to traditional sportsbooks, which are expected to generate only US$3.3 billion from March Madness, according to the American Gaming Association.

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Yet, prediction markets have faced growing scrutiny in recent months. The NCAA has attempted several times to halt prediction market activity tied to its tournaments.

Last week, NCAA President Charlie Baker sent a letter to the Commodity Futures Trading Commission asking the federal regulator to impose a temporary suspension on trading tied to college sports events.

Prior to the letter, the regulator had updated its guidance for prediction markets, but has yet to publicly respond to Baker. An NCAA spokesperson said, “Sport integrity is paramount for the NCAA, and despite the recent CFTC memo, we remain deeply concerned by unprotected prediction markets that pose a threat to competition integrity and student-athlete safety.”

Charlotte Capewell brings her passion for storytelling and expertise in writing, researching, and the gambling industry to every article she writes. Her specialties include the US gambling industry, regulator legislation, igaming, and more.

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The Backstory

A surge that reorders March Madness money

Prediction markets used March Madness to move squarely into the mainstream of U.S. wagering, challenging traditional sportsbooks on both volume and visibility. The broader pivot has been months in the making: retail trading platforms, digital advertisers and policy advocates converged on the NCAA tournament as a proving ground for event contracts that look and feel like sports bets but clear through federally regulated derivatives venues.

Robinhood Markets set the tone days before tipoff by unveiling a prediction markets hub inside its app through its CFTC-regulated partner, positioning event contracts as an investable asset class for eligible derivatives customers. The launch, delivered via its futures arm, added a high-traffic consumer gateway to the category and immediately raised policy stakes because college sports were among the first use cases. For details on the product scope and guardrails, see Robinhood launches prediction market in time for March Madness.

The category’s commercial momentum dovetailed with a sharp increase in consumer intent to wager. Industry data projected Americans would legally bet more than $3 billion during the tournament, spotlighting a fragmented market in which state-licensed sportsbooks, off-platform scams and federally supervised prediction markets compete for the same attention. The advertising and integrity responses that followed show how quickly growth has outpaced policy alignment.

Robinhood’s push meets a moving regulatory target

Robinhood’s March debut followed an earlier attempt to list Super Bowl event contracts that was cut short after CFTC scrutiny, illustrating the fluid boundary between permissible event derivatives and prohibited gaming. The firm’s NCAA rollout leaned on a partner exchange licensed at the federal level, enabling nationwide distribution without the state-by-state approvals required of sportsbooks. That structure, central to the pitch, immediately drew questions from state officials who argue the activity, while regulated as derivatives, functions like sports betting for consumers.

Massachusetts regulators opened a probe into how many in-state Robinhood accounts traded college sports event contracts and whether the marketing and disclosures met investor protection standards. The investigation underscores a jurisdictional gray zone: the CFTC oversees event contracts at the exchange level, but states police broker-dealer conduct and consumer protection. Read more in Massachusetts investigates Robinhood’s March Madness event contracts and the original Reuters report on the Massachusetts probe.

Federal posture remains in flux. The CFTC has updated guidance around event contracts, and market participants monitor the agency’s notices and docket to understand where sports-related questions might land next. The CFTC’s site hosts rules and public materials at cftc.gov, while comment filings, including on event contracts and election markets, can be searched via its public comment portal. The NCAA has urged the commission to halt trading tied to college sports, escalating a policy confrontation that is unlikely to fade after the tournament.

Advertising muscle widens the gap with compliance

While sportsbooks have pared back ad spending, prediction markets filled the vacuum ahead of and during March Madness. Digital ad impressions tied to prediction market operators surged even as online sportsbook impressions fell year over year, according to a review of Sensor Tower data compiled by the American Gaming Association. The exposure puts event contracts in front of casual fans at scale, raising brand recognition—and regulatory questions—because many of those ads are not captured by state gaming rules that mandate responsible gambling messages.

Through the first two months of the year, more than two in five digital sports betting ads seen by U.S. consumers lacked required responsible gaming messaging due to the growing share from prediction market operators. One exchange’s imprint was especially large, ranking among the most visible brands by digital impressions and rivaling top sportsbooks. The shifting ad mix, and what it omits, is detailed in March Madness brings increased focused on sports betting ads.

The advertising tilt illustrates the core tension: event contracts can be marketed nationally under federal derivatives rules, but the consumer sees sports outcomes with a yes-no price and a payout—functionally indistinguishable from a regulated wager. That mismatch complicates compliance regimes built around state licensure, disclosures and helpline placements tied to traditional sportsbooks.

Integrity and consumer risk rise to the forefront

With more money and marketing flowing into college sports outcomes, integrity concerns took center stage. The NCAA expanded partnerships with data and monitoring firms to limit risky betting and track social media abuse, reporting a decline in betting-related harassment despite higher overall volumes of online hostility for some men’s teams. The findings signal that targeted countermeasures can curb a subset of harmful behavior even as engagement grows. A full breakdown is in March Madness sports betting abuse down 23%, according to NCAA.

Consumer risk also climbed outside regulated channels. Cybersecurity experts warned of a spike in fraudulent betting sites and apps during the tournament, exploiting the flood of first-time or infrequent bettors. Prediction markets’ mainstream visibility may unintentionally aid scammers by normalizing novel wagering formats and broadening the pool of individuals seeking quick ways to bet on games. Guidance to stick with well-known, licensed brands became a recurring theme. See Online betting scams on the rise during March Madness for red flags and context.

The upshot for regulators is twofold: guardrails around student-athlete safety and game integrity must now account for both sportsbooks and federally regulated event markets, while consumer education has to reach beyond state-license frameworks to confront scams that flourish during peak sports moments.

What the next inning looks like for rulemakers

The NCAA’s call for a timeout on college sports event contracts puts the CFTC in the crosshairs of a policy debate that mixes market structure with social risk. If the commission tightens or clarifies its stance on sports-related event contracts, platforms that built momentum on March Madness could face product restrictions or higher compliance burdens. If federal rules remain permissive, expect more brokers and fintechs to follow Robinhood in offering access, betting that national scale offsets episodic state-level scrutiny.

States, meanwhile, are likely to continue testing their authority at the distribution layer—marketing, suitability, disclosures and investor protection—especially when college sports are involved. The Massachusetts inquiry will act as an early bellwether for how far state securities regulators can push oversight of federally permitted products offered to retail users through local accounts.

The advertising dimension may force faster coordination. As prediction markets capture outsized digital share without state-mandated responsible gaming messaging, pressure will grow for a harmonized standard or for platforms to voluntarily align with sportsbook norms. Without that, the compliance gap could widen just as event contracts attract a broader, less sophisticated audience.

For now, March Madness has demonstrated the commercial potential of prediction markets at scale and the policy frictions that follow. The next moves from federal regulators, state enforcers and platforms will determine whether this spring’s surge becomes a durable reshaping of how Americans speculate on sports outcomes—or a high-water mark before new rules redraw the lines.