Americans on Track to Lose $250B in Betting and Trading

Economics writer Joseph Politano projects Americans will lose more than $250 billion in 2026 across legal sportsbooks, prediction markets, retail options and cryptocurrency trading. Politano’s analysis shows losses have risen about 67% since the start of the COVID-19 pandemic and increased 8% over the past year.

Commercial gaming revenue in the U.S. reached $78.72 billion in 2025. Sports-betting revenue was $16.96 billion on a handle of $166.94 billion in 2025, up from just under $150 billion in 2024. Prediction market platforms recorded more than $44 billion in notional trading volume in 2025, led by Polymarket and Kalshi.

U.S.-listed options volume hit a record 15.2 billion contracts in 2025, a 26% increase from 2024. Short-term options are a growing share of that flow: zero-days-to-expiration contracts on the S&P 500 averaged 2.3 million contracts a day and made up 59% of SPX volume, with retail traders accounting for roughly half to 60% of that activity. In crypto markets, memecoin market value moved from about $36.5 billion to roughly $47.3 billion in early 2026 after sharp declines and recoveries.

Regulatory treatment varies by product type. State gaming commissions and state gambling laws govern licensed sportsbooks. Some prediction markets and event contracts have been litigated under federal derivatives law and reviewed by the Commodity Futures Trading Commission in certain cases. Stock options fall under SEC and CFTC rules. Most memecoins and many other digital tokens remain outside comprehensive federal oversight unless they meet legal tests for securities or commodities.

Because rules depend on product category, a resident of a state where sports betting is illegal may be able to place a similar event-style wager through a federally regulated market with different consumer protections. The American Gaming Association estimates prediction markets offering sports-related contracts diverted more than $500 million in potential state and tribal betting tax revenue since the start of 2025.

The CFTC is divided on its role: former CFTC chairman Gary Gensler filed a brief arguing Congress did not intend the agency to be a national sports-betting regulator, while current agency leadership has sued states to assert jurisdiction over some event contracts. States including Nevada, Massachusetts, Arizona and Tennessee have been the sites of lawsuits and enforcement actions tied to event contracts.

The industry has realigned as well. DraftKings and FanDuel left the main trade association in November 2025. DraftKings launched a federally regulated event-contract product that reached a $3.1 billion annualized trading run rate within six months.

Research cited in the analysis links expanded betting access to social and financial harms. One study found an NFL home team’s upset loss raises rates of intimate partner violence more in states with legal sports betting than in states without it. A separate analysis using millions of credit reports found debt delinquency rates rose after states legalized sports betting, concentrated among men and people under 40.

Some trading serves hedging, price discovery or long-term investment. Volumes and losses are growing across sportsbooks, prediction markets, options and crypto while regulatory rules continue to differ by product type rather than by the economic nature of the wagers.