The nation’s biggest horse race, the Kentucky Derby, takes place Saturday in Louisville. If you are looking to bet on Kalshi, Polymarket or another prediction platform around the event, you are out of luck.
There are no contracts for Kentucky Derby events offered on major prediction platforms, which host contracts on everything from sports scores to geopolitical events to reality TV show moments, but not horse racing..
Bill Carstanjen, CEO of Churchill Downs, which owns the Kentucky Derby and the racetrack where it is run, told CNBC that horse races are unlikely to ever appear on prediction markets because racetrack owners don’t want them.
“You actually have to go to us, the owners of the circuits, to make a deal,” Carstanjen said in an interview this week. “And from our perspective, that’s not something we’re interested in.”
Horse racing has long been a small fiefdom in its own right. Betting on races, an original form of sports betting in the United States that dates back to colonial times, enjoyed a special status even before the Supreme Court struck down a law in 2018 that prevented states other than Nevada from offering sports betting.
By law, under the Interstate Horseracing Act of 1978, offering betting on horses requires explicit permission from the host racetrack, the horsemen’s group of owners and trainers, and the racing commission of the state where the race is taking place.
This left the booming industry of prediction markets on the sidelines.
“Prediction markets are not something that would be good for horse racing, nor for the economic paradigm that our industry operates in, which involves funding purses for horse racing winners,” Carstanjen said.
Kalshi declined to comment on the absence of horse racing on his platform. Polymarket did not respond to a request for comment. And representatives from the Commodity Futures Trading Commission, which regulates event-driven contracts, also did not respond to a request for comment.
This tension raises an interesting question: when – and in what context – is authorization necessary for prediction market platforms to offer contracts on a given event.
US states argued that companies like Kalshi and Polymarket needed their permission (via licensing) to offer sports betting. Prediction platforms have argued that they do not need licenses because they offer investment and trading activities, not gambling, and because they are regulated by the CFTC.
The CFTC has filed several lawsuits against states seeking to prevent them from taking action against prediction platforms.
Kentucky, for its part, has taken a tough stance on the forecast. State lawmakers have proposed legislation that would prohibit any gaming license holder from offering predictions. Also proposed is a 17.5% tax on predictive market fees.
Meanwhile, there’s still some old-fashioned play for Saturday’s Derby. Churchill Downs said it saw an increase in betting during the Derby week leading up to the big race.
Caesars, also, said the amount of money wagered on the Kentucky Derby was higher than expected.
— CNBC’s Jessica Golden contributed to this report.
Disclosure: Kalshi and CNBC have a business relationship that includes a minority investment.