Kentucky And Churchill Downs Push Back Against Prediction Market Expansion

Kentucky and Churchill Downs are taking a stance against prediction markets, warning they could disrupt regulated wagering systems and weaken the horse racing industry’s financial foundation.

Ziv Chen

Last Updated: April 23, 2026 6:23 AM EDT • 3 minute read

Pictured: Exercise rider Alejandro Galindo with 2026 Kentucky Derby horse Intrepido on the track as we look at the Churchill Downs pushback on prediction markets. Photo by USA TODAY Network via Reuters Connect

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Kentucky regulators, alongside Churchill Downs Incorporated (CDI) and other horse-racing industry bodies, are now taking a stance on prediction market platforms like Polymarket and Kalshi, as their role alongside conventional wagering starts to draw scrutiny.

That shift is happening even as the biggest race days keep delivering. The Kentucky Derby and Kentucky Oaks have both posted record profits from traditional licensed betting, including at the best Kentucky Derby betting sites, each year since 2023, reinforcing their importance to the racing market.

However, when looking at the handle totals, fewer races are being run, and wagering on non-premium fixtures has quietly softened. US racing handle has fallen in six of the last seven years, with drops of 3.7% in 2023, 3.35% in 2024, and 2.1% in 2025.

Attendance trends remain under pressure, and the foal crop continues to shrink, limiting long-term supply. Kentucky, long positioned as the center of the US horse racing industry, has responded by closing tracks and reducing race schedules.

At the same time, prediction market apps have added a new competitive dynamic. While Polymarket generated $1.2 million in wagers on the most recent Derby, their broader influence has been more visible in other sports. Earlier this year, parent company Flutter Entertainment (FanDuel) and DraftKings saw their stock prices decline as bettors shifted toward prediction markets for Super Bowl LX.

Churchill Downs focuses on content control and distribution

Against this backdrop, CDI has maintained a firm stance on protecting its wagering model and content distribution. During an investor meeting in February, CEO Bill Carstanjen opposed prediction markets and outlined the company’s business strategy, stressing the need for premium racing days and controlled distribution of its content.

As he noted, important race days have been growing larger and more popular over time, solidifying the trend towards high-end races. This is true for the Kentucky Oaks, one of the most bet-upon races today in the United States.

Also, Carstanjen stressed the legal aspects of placing bets on horses. The parimutuel betting process for horse races is regulated by the Interstate Horseracing Act, which grants exclusive control over the use of race content and requires permission for this process. CDI has not provided such consent to prediction market operators and does not intend to do so. Some of the best Kentucky sports betting sites do indeed have consent.

Industry groups cite legal and economic risks

The regulatory debate has extended beyond operators to industry bodies. The CFTC has collected hundreds of public comments on prediction markets, including submissions from the National Thoroughbred Racing Association.

CEO Thomas Rooney outlined that interstate wagering is strictly governed by consent requirements under federal law. Approval must come from racing associations, horsemen groups, and relevant state commissions before any wagering activity can proceed.

No such approvals have been granted for prediction market contracts tied to horse racing outcomes. As a result, no designated contract market currently offers these products in the US.

Industry stakeholders argue that allowing prediction markets to operate outside this framework could divert revenue away from regulated systems. That funding supports racetrack operations, prize purses, breeding programs and oversight functions. Any shift in wagering activity, they warn, could disrupt the financial structure that underpins the sport.

Written by:
Ziv Chen

Ziv has over two decades of experience in the igaming and sports betting industry, having served in senior marketing and business development positions with both B2C and B2B companies, including Playtech and Microgaming. In 2019, Ziv decided to pursue his passion for writing and became a fulltime industry journalist, covering casino, sports, and gambling business news. He’s specialties include casino games and technology, US state gambling regulation, company performance, as well as gambling affiliates and marketing. As a Pitt graduate, Ziv is a diehard fan of all Pittsburgh sports teams, with the Steelers at the top of the list. In his free time, he enjoys reading crime fiction, biographies (mainly of sports personalities, but not only) and American history. Ziv’s Favorite quote: “We're going to pursue perfection, knowing full well we won't catch it, but we're going to relentlessly chase it," Mike Tomlin, Pittsburgh Steelers Head Coach.