New York Sports Betting Handle Grows Despite Prediction Market Competition

New York's sports betting market continues to expand despite industry concerns about competition from federally regulated prediction markets. According to the New York State Gaming Commission, sportsbooks handled more than $2.4 billion in wagers during September 2026, representing a 5% increase compared to the same month in 2025 and adding nearly $114 million in incremental volume. Year-to-date through September, the state's handle sits 3.7% higher than 2025 levels, with bettors wagering approximately $697 million more than a year prior.

The growth trajectory is even more pronounced when measured across the state's fiscal year. Over the first six months of the 2026-2027 fiscal year starting in April, New York generated nearly $12.6 billion in sports betting handle, marking a 6.9% increase from the comparable 2025 period. This sustained expansion positions New York firmly as the nation's largest sports betting state among 39 jurisdictions with legal sports gambling operations.

However, the handle growth masks a troubling revenue picture for sportsbook operators. Despite increased wagering volume, sportsbooks generated only $1.1 billion in revenue through the first six months of the current fiscal year, down 5.8% year-over-year. This decline stems from a compression in the operators' hold rate, which fell from 10% to 8.8% during the same comparative period. In practical terms, bettors are winning more frequently or at larger margins, leaving less profit for the nine licensed sportsbooks operating in New York: Bally Bet, BetMGM, BetRivers, Caesars Sportsbook, DraftKings, Fanatics, FanDuel, Resorts World Bet, and theScore.

The regulated gambling industry attributes this profitability squeeze partly to competition from unregulated prediction markets that expanded nationally in late 2025. The American Gaming Association contends that sports trading on these federally regulated platforms diverts volume from state-licensed operators while siphoning tax revenue. The AGA's estimates project nearly $1.6 billion in lost state gaming taxes since prediction markets began offering what industry representatives characterize as back-door sports betting. Prediction market operators counter that they facilitate trading between users rather than wagering against a house, and thus operate differently from traditional sportsbooks.

New York's experience provides mixed evidence for both sides of this debate. The state's continued handle growth suggests that prediction markets have not yet meaningfully cannibalized the regulated market, at least in the nation's largest sports betting jurisdiction. This contrasts with performance elsewhere. Illinois, the second-largest sports betting state, reported online handle of $9.3 billion through August 2026, up 5.7% year-over-year. However, New Jersey tells a different story. The state recorded a 4.1% decline in sports betting handle, with total wagers falling from $8.6 billion to $8.3 billion through September.

The divergent state-by-state results underscore the complexity of evaluating prediction market impact. New York's market remains robust with nine major operators competing aggressively for market share, while smaller markets or those with less competitive operator landscapes may be more vulnerable to alternative betting platforms. The persistence of handle growth in the nation's largest market suggests that consumer demand for regulated sports betting remains resilient, even as unregulated alternatives gain prominence. Whether this holds true as prediction markets mature and expand their product offerings remains an open question for regulators and operators alike.