Published on: March 9, 2026, 02:59h.

Updated on: March 9, 2026, 02:59h.

• Anticipation builds for March Madness NCAA basketball betting
• Forecasts suggest a handle of $4 billion for the tournament
• Americans facing new tax considerations on betting due to the Big Beautiful Bill

March Madness has arrived, marking a monumental moment in sports betting, characterized by bracket competitions, prop bets, and extensive multi-game action—making it the most wagered-upon event of the year based on industry predictions.

The Sports Betting Powerhouse

According to recent statistics from H2 Gambling Capital, the sports betting handle for the NCAA men’s and women’s basketball finals is projected to hit $4 billion this year, solidifying its status as the most wagered event in the U.S. sports calendar. In contrast, the Super Bowl remains the leading one-off game, generating around $1.4 billion in betting handle last month, according to H2’s statement.

This marks an estimated 6.7% growth compared to last year’s tournament. H2 Gambling Capital, known for its expertise in gambling market intelligence and forecasts, is a UK-based analytics firm frequently referenced in the industry.

Tax Considerations for Bettors

H2 offered an intriguing observation: sportsbooks typically experience lower hold rates during March Madness, as bettors may not be as familiar with individual players, leading to diminished prop betting interest. Consequently, the performance of favored teams tends to have a greater impact on sportsbooks’ holds, with underdog wins enhancing profitability.

For this year’s tournament, H2 estimates that sportsbook hold rates will reach 7%. Notably, last year witnessed all four No. 1 seeds reaching the Final Four—a rare occurrence.

Operators’ Reduced Hold Rates

Many eager individual bettors are gearing up. For the men’s tournament, Selection Sunday is set for March 15, and First Four matches will be held on March 17-18. The First Round takes place March 19-20, with the Second Round on March 21-22. The Sweet 16 is set for March 26-27, the Elite Eight for March 28-29, and the Final Four on April 4, culminating in the NCAA championship on April 6 at Lucas Oil Stadium in Indianapolis.

For the women’s tournament, Selection Sunday is also on March 15, with the First Four on March 18-19. The First Round occurs on March 20-21, Second Round on March 22-23, Sweet 16 on March 27-28, Elite Eight on March 29-30, Final Four on April 3, and the NCAA championship on April 5 at Mortgage Matchup Center in Phoenix.

Tax Changes Under the Big Beautiful Bill

For bettors, all winnings are considered taxable income, irrespective of the amount, and must be reported on Form 1040 under “other income.” Sportsbooks are required to issue a W-2G form for payouts exceeding $2,000 or those that are 300 times the original wager. This $2,000 reporting threshold is a new provision for 2026 (previously $1,200 for slots/bingo and $600 for other betting types, including sports betting). For the first time, sports betting has been explicitly referenced in W-2G guidelines this year.

While itemizing deductions, losses will be reported on Schedule A. Deductions for gambling losses can only occur if itemizing on Schedule A (not if opting for the standard deduction). The 2026 Big Beautiful Bill limits bettors to deducting only 90% of those losses, a change from the previous 100% deduction (the older rule applies for the 2025 tax year).

Even with outright profit neutrality on wins and losses, taxes apply. Therefore, should a bettor win $20,000 and lose the same amount during the tournament, only $18,000 can be deducted. The IRS views that $2,000 as taxable income, regardless of net profits. To have a net tax liability of $0, you must be a net loser. These regulations took effect on January 1, 2026.

State Variations in Tax Regulations

All bonus wagers are taxable; any cash received is considered gambling income. Notably, certain U.S. states have not adopted the federal 90% cap. For instance, New Jersey continues to permit 100% adjustments for wins and losses under local regulations. Bettors in these jurisdictions should confirm that federal guidelines do not apply to state tax returns.

Ultimately, every dollar of winnings must be reported, whether or not a W-2G form is received. Bettors are encouraged to maintain meticulous records of betting activity: including the date, sportsbook, type of wager, amounts wagered, results, and any payouts. In the event of an audit, personal documentation will carry more weight than any records maintained by the sportsbook app. It is recommended to consult an accountant for those whose gambling activities exceed $25,000 annually.