If people are going to bet on any horse race this year, it will probably be this Saturday’s Kentucky Derby. And, if and when they do so, it will be done, perhaps refreshingly, in the usual ways of wagering.
- The 152nd Kentucky Derby remains largely unaffected by the rise of federally regulated prediction markets, with betting still confined to traditional, state-sanctioned (and federally blessed) channels.
- Legal barriers, especially the Interstate Horseracing Act requiring operator consent, have prevented prediction markets from offering horse race wagering.
- While prediction markets disrupt other sports betting, horse racing stays protected for now as Churchill Downs focuses on expanding events like the Preakness Stakes.
Yes, in a moment when the sports betting industry has been utterly disrupted by the arrival of federally regulated prediction markets, the Kentucky Derby remains relatively unscathed by all that madness.
Wagering on the 152nd Run for the Roses will be an island of normalcy in an angry sea of gambling upheaval, and that's something worth noting these days.
So, if you want to wager on Kentucky Derby odds, you’ll likely do so in person or online at the usual places: the track, an OTB, or a state-sanctioned betting site like those offered by DraftKings, namely its new DraftKings Racing platform.
That’s nothing to breeze past these days. In fact, it’s becoming an outlier. Prediction markets and their de facto form of sports wagering have broken containment, but wagering on horse racing remains very much in a tightly regulated corral.
“It isn't something that we're real concerned about,” Churchill Downs CEO Bill Carstanjen said after last year’s Derby.
But that was a year ago, right? And if you’ve been following the prediction market story, you know a lot can change in 12 months.
After all, it was in late December 2024 that the first sports event contracts went live via federally regulated prediction markets. Now, they’re everywhere, including on offer from the prediction platforms of state-regulated sports betting brands like DraftKings and FanDuel.
So, if prediction markets can stare down the NFL and NBA, and create a whole new avenue of sports betting via federal law, surely they’re not afraid of a few horsepeople, right? Surely people are buying and selling horse racing-related event contracts all over the place, now.
You don't mess with the horsepeople: pic.twitter.com/awS5sdp1hV
— Geoff Zochodne (@GeoffZochodne) April 27, 2026
But no. It hasn’t happened. If you go to Kalshi, you’ll see no Kentucky Derby contracts for trading. Even Polymarket’s global site has ceased trading of Derby-related shares.
Prediction markets weren’t even mentioned last week during Churchill Downs Inc.’s latest earnings call. And earlier this year, even when they were, the level of concern was pretty low.
No, nay, never
In the view of CDI’s CEO, there are some serious legal obstacles to prediction markets facilitating wagering on horse racing.
While prediction market operators say their federal regulation trumps state-level gambling law, it’s hard for them to make the same case when they are up against another federal law. That would be the Interstate Horseracing Act (IHA), which requires certain “consents” for wagering on horse racing.
“To take wagers across any forum, whether it be a sports wagering platform, another horse racing platform, such as an (advance deposit wagering platform), or a prediction markets platform, you need our express consent,” Carstanjen said in February. “You can't just do it without that.”
So, if you’re looking for the main reason why prediction markets won’t be facilitating wagering on this year’s Kentucky Derby (which should be relatively robust once more), the answer probably has something to do with not having permission and the possibility of catching some serious hell if they do it anyway.
Granted, catching hell hasn’t stopped prediction markets from offering sports event contracts for trading. The exchanges and gambling regulators in a growing number of states are locked in legal combat over that.
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Telegram for 'don't even try it'
The IHA, however, is a federal law (the opening sections of which say that "the States should have the primary responsibility for determining what forms of gambling may legally take place within their borders").
Arguing that a federal commodities law would supersede another federal law, which specifically deals with betting on horse racing, sounds like a much harder sell.
“The Commission has authority under the [Commodity Exchange Act] to prohibit contracts that are contrary to the public interest,” National Thoroughbred Racing Association President and CEO Tom Rooney wrote in an April 2 letter to the chairman of CFTC. “Event contracts based on horseracing outcomes that circumvent the Interstate Horseracing Act of 1978 (the ‘IHA’) fall squarely within this category and are furthermore preempted by other federal laws.”
Rooney added later in his letter that Congress enacted the IHA “to comprehensively regulate the field of interstate wagering on horseracing,” and therefore the IHA “preempts more general statutes,” including the Commodity Exchange Act.
“To date, no racing association or commission has provided consent for any event contract,” Rooney wrote. “Indeed, following this federal requirement, no [CFTC-regulated prediction market] has offered a horserace-based event contract in the United States.”
So, yes, a CFTC-regulated prediction market dabbling in horse racing would catch hell from the horsepeople. What’s more, the odds of the exchanges winning in court may not be as favorable as the wars versus state regulators.
Churchill Downs has unveiled some new wagering options ahead of this year's Kentucky Derby. Includes (still-pari-mutuel) matchup betting, which intrigues me a lot: pic.twitter.com/uCTREAlXDX
— Geoff Zochodne (@GeoffZochodne) April 20, 2026
Even Polymarket, which facilitated wagering on last year’s Kentucky Derby via its global site, appears to have backed off this year.
The company did not respond to questions from Covers before this story was published, but Polymarket looks to have posted and then withdrawn Derby-related contracts for trading on its global site. The operator also continues to work its way back to a full launch under U.S. regulation.
In short, then: prediction markets may be disrupting the former status quo for online sports betting in the U.S., but horse racing appears safe. At least for now, and, barring any last-minute event contract self-certifications, at least until after this year’s Kentucky Derby.
"A REMARKABLE RECOVERY BY JOURNALISM!"
— NBC Sports (@NBCSports) May 17, 2025
JOURNALISM WINS THE 150TH PREAKNESS STAKES! #Preakness150 pic.twitter.com/f2IOVEyUy9
As mentioned above, the owner of the Derby, Churchill Downs Inc., feels it currently has bigger fish to fry. They include pulling off the biggest horse race in North America, wooing international customers, and helping elevate the second jewel in horse racing’s Triple Crown, the Preakness Stakes.
CDI announced on April 21 that it struck an $85-million deal to acquire the intellectual property of the Preakness. The transaction is expected to close after this year's running of the event, after which Churchill Downs will be able to throw its weight behind the race that everyone wants the Kentucky Derby winner to run.
And if CDI can pump up the Preakness, there may be some serious financial benefits.
“The Preakness IP fee structure includes a $3M base fee, growing 2.5% annually, plus 2% of handle from the Black-Eyed Susan and Preakness Stakes, which totaled ~$140M last year,” analysts from investment bank Jefferies wrote in an April 24 note to clients.
