For sports gamblers in New Hampshire, the first days of the NCAA’s men’s and women’s college basketball tournaments are a chance to cash in on top teams and Cinderella upsets.
The New Hampshire Lottery Commission forecasts that more than $20 million will be wagered by the time champions are cutting down the nets in early April. For legal sports wagering on March Madness, and any other event, DraftKings is the only game in town: the state has signed a multi-year contract with the firm that calls for a split of the proceeds.
But the rapid rise of prediction markets could put a dent in long-term revenue from sports wagering. Kalshi and Polymarket, the two largest players, allow participants to enter into “yes” or “no” contracts on the outcomes of games, as well as a range of political and world events. Customers are essentially wagering against each other, with the platforms collecting a fee on every contract.
Both companies are now heavily promoting prediction opportunities for NCAA games, but since neither Kalshi nor Polymarket has entered into any agreement with the state, New Hampshire won’t receive any portion of the money the firms collect.
New Hampshire Lottery’s executive director Charlie McIntyre said the state hasn’t yet seen an impact on revenues from the rise of prediction market offerings, but that it’s possible down the road. “Given the overlap in sports offerings, we anticipate the expansion of prediction markets could erode New Hampshire revenues from sports betting,” he said.
Other states are taking action against the rise of these alternative wagering platforms. This week, Arizona’s attorney general filed a criminal lawsuit against Kalshi, accusing the company of operating an illegal gambling business. That lawsuit comes following a wave of other civil lawsuits filed against the Kalshi and Polymarket, which are regulated by the federal government as futures trading entities, and not as sportsbooks, which states typically regulate.
Massachusetts secured a preliminary injunction against Kalshi in January, in an attempt to block users from placing bets on sports through the app. New Hampshire hasn’t yet pursued legal action, but officials said they are monitoring the suits in other jurisdictions.
In 2019, DraftKings was awarded the sole license to offer both online and in-person sports wagering in New Hampshire, with approximately 50% of all profits split with the state. That’s netted more than $172 million in government revenues, to date. The New Hampshire Lottery Commission recently announced a two-year extension, meaning the Boston-based company will maintain its hold over the legal sports gambling market through the summer of 2028.
In December, DraftKings announced it would begin offering its own version of prediction market wagering to compete with Kalshi and Polymarket, but the company is not making the use of contracts available in certain states, including New Hampshire.
In the short run, Michael McCann, who directs the Sports and Entertainment Law Institute at UNH, said he doesn’t expect states, including New Hampshire, to see any sizable drop in revenues. “But in the years ahead, this will be competition for DraftKings and other companies like it.”
McCann said that the legality of Kalshi and Polymarket offering what are futures contracts on sporting events – and whether or not they are just sportsbooks in another name – will ultimately be settled by the courts.
“Is sports betting and prediction markets synonymous, or are they sufficiently distinct that there should be different treatment under the law? That's an open ended question,” he said.
