The NCAA Division I Men’s Basketball Tournament, aka March Madness, is very big business. Will this year’s take be even greater now that sports betting is legal in eight states? Absolutely, but not by as much as people may think.

March Madness is already big. The 68 teams play 67 games over a period of 19 days and every game is broadcast on TV. The championship game is expected to attract an audience of 25 million, and four television networks — CBS, TBS, TNT and TruTV — will broadcast every game, beginning March 19 and running through the championship game in Minneapolis on April 8.

The four networks together paid the NCAA $10.8 billion in 2011 for a 14-year contract to broadcast the tournament. That contract was extended for an additional seven years (until 2032) for another payment of $8.8 billion in 2016. That works out to an average payment over the 22 years of the contract to $891 million a year. The NCAA is clearly a big winner in the money sweepstakes. The networks raked in $1.32 billion in March Madness advertising revenue last year, second only to the $1.68 billion in ad revenues for the 2018 NFL post-season playoffs. Ticket sales for this year’s 68 games are expected to add around $160 million to the NCAA’s (and the host schools’ and participant teams’) coffers.

How much will legal gambling on the tournament add to the take since the U.S. Supreme Court last year lifted a ban on sports betting? Eight states — including Nevada, where sports betting was already legal — have passed legislation to legalize betting on sporting events, and gambling industry research firm H2 Gambling Capital estimates that this year’s March Madness will generate $12.1 billion in total handle (money wagered) for the tournament.

While that may sound like a windfall for states where sports betting is legal (Nevada, New Mexico, Mississippi, West Virginia, Pennsylvania, New Jersey, Rhode Island and Delaware), H2 estimates that a bare 6.6% of the total handle will be placed in legal bets in those eight states. That’s $798.6 million, not an amount to sneeze at, but less than the NCAA’s or the TV networks’ take.

The analysts at H2 estimate that the handle for each March Madness game will be around $11.9 million, compared with an average $90,000 handle for regular-season games. The gross win (for the house) could be as high as $1.1 billion, with 6.7% ($73.7 million) generated in the eight states where sports betting is legal.

At a total handle of $12.1 billion, betting on March Madness is double the $6 billion bet on this year’s Super Bowl, the single biggest sporting event for U.S. sports bettors. Of those billions, however, this year’s Super Bowl generated just $300 million in legal bets.

Americans do love to bet on sporting events, but office pools and brackets are by far the most popular and lucrative ways to get in on the action. Will that change as more states legalize sports betting? In 2017, when Nevada was the only state where sports betting was legal, the state’s handle on March Madness was less than 3% of the total wagered both legally and illegally.

But that’s still a lot of money on the table for states to divvy up. In 2018, the total handle on regulated U.S. sports betting was a bit less than $7 billion with a gross win of around $445 million. To reap the largest rewards, the trick for the states and their gambling books will be to attract occasional gamblers. That’s where the money is.

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