Could Kentucky’s Prediction Markets Bill Harm Sports Betting In The State?
Jesse M. Cox Published 26/03/2026
Some in the industry are wondering whether Kentucky’s new plan for dealing with prediction market sites operating in the Bluegrass State is going to result in a case of cutting off their nose to spite their face.
House Bill 904 (HB 904) was passed late last week. A 79-15 vote approved it, and it now moves on to consideration by the State Senate.
HB 904 is a wide-ranging bill, but one of the most noticeable elements of the bill is how it plans to deal with prediction market sites. Firstly, these sites would be taxed at a rate of 14.25%, the same level as the state’s online sports betting sites are paying.
More significantly, HB 904 would ban all horse racing tracks that hold a sports betting license, along with all daily fantasy sports operators in Kentucky, from partnering with any prediction market site trading in the state.
“A track or association that holds a license to conduct horse racing, sports wagering, or a licensee offering fantasy contests under this chapter or its affiliate shall not participate in or contract with platforms that offer events contracts through a prediction market or have a beneficial interest in the proceeds of prediction markets,” the bill reads. “Licensees would not be able to partner with a service provider that runs a prediction market or has a beneficial interest in an entity that does.”
Beginning in 2027, that ban would extend to any entity that’s offering event contracts through a prediction market site anywhere in the USA.
This segment of the bill is sounding alarms throughout the Kentucky betting industry. There is concern that it could lead to major players in the sports betting industry opting to leave the state. The top two online sportsbooks in terms of revenue that operate in the U.S. legal and regulated market are DraftKings and FanDuel. Both have also entered the prediction market game in the past year. Fanatics, another mobile sportsbook operating in Kentucky, also offers a prediction market site.
That trio of sportsbooks filed a joint statement suggesting dire consequences could be ahead for Kentucky’s sports betting industry if HB 904 is passed into law.
“As currently drafted, section 20 [of HB 904] would gut the regulated sports betting market and force the exit of most, if not all, existing regulated operators from the Commonwealth,” the statement read. “This would cost the state more than $40 million in tax revenue every year.”
A look at other measures included in HB 904
Beyond the prediction market disruption, several other changes to Kentucky’s gaming industry are proposed as part of HB 904.
The legal age for gambling in the state would be raised from 18 to 21. DFS sites would require a license to operate in Kentucky and would be taxed at a rate of 12%. Fixed-odds racing on horse racing would be introduced, and player props on in-state college athletes would be prohibited.
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