Prediction Markets Won't Be Offering Event Contracts On Kentucky Derby
David Genge Published 01/05/2026
The 152nd running of the Kentucky Derby will take place on Saturday, May 2, at Churchill Downs in Louisville, Kentucky. A record-setting $234.4 million was wagered from all sources on the 2025 Kentucky Derby race. That record could fall again this year, but prediction market sites won't be contributing any money to the overall Derby Day handle.
Both Polymarket and Kalshi, the leading prediction market sites in the USA, have indicated to Derby officials that they won't be offering any sports event contracts on the first leg of thoroughbred racing's Triple Crown. Churchill Downs had informed the prediction market sites that they'd take legal action if event contracts were offered on the race.
Polymarket quickly pulled down a Kentucky Derby event contract posting
For a very brief time frame, Polymarket had posted a sports event contract on the Kentucky Derby. However, removal from the site was quickly achieved at the insistence of Churchill Downs officials.
"We reached out to Polymarket and asked for the wagers to be removed," Churchill Downs spokesperson Breck Thomas-Ross told ESPN. "And Polymarket complied."
Even though Kaslshi has offered sports event contracts in the U.S. market since 2025, the company has avoided any involvement in Kentucky Derby trades. Last year, Polymarket didn't have legal approval to operate in the USA. The company offered trades on the Kentucky Derby in other countries, taking in approximately $1.2 million on those event contracts. Polymarket gained its U.S. license in December 2025.
Prominent U.S. sportsbooks FanDuel and DraftKings both recently launched their own prediction market sites. However, neither platform is providing event contracts on the Derby.
Both horse racing and prediction markets are under federal regulation
Prediction market sites get their regulation federally from the Commodity Futures Trading Commission (CFTC). They've been able to use that as a loophole to offer sports event contracts in states that also have legal and regulated sports betting. The regulators of sports betting sites are state governments. Thus, prediction market sites are arguing that state governments have no jurisdiction over sports event contracts.
Those legal calisthenics won't work with horse racing, though. The sport of kings is also federally regulated by the Interstate Horseracing Act (IHA), which is also a federal entity. That act is giving the horse racing industry ultimate control over where and who can offer its product for wagering.
Ever since the legalization of online sports betting across the USA in 2018, in states that have approved sports betting, sportsbooks generally don't offer betting markets on horse racing. In a few instances, some states have developed access to horse racing wagering. However, they are doing so via agreements between the sportsbooks and horse racing tracks.
Churchill Downs CEO is ready to fight to protect the Kentucky Derby brand
Prediction market site operators have displayed plenty of hubris since launching in the U.S. market. But if they're thinking that they're going to go toe-to-toe with the horse racing industry, the equine set is saying, bring it on.
"Horse racing has a different legal paradigm than other sports offerings in the United States," Churchill Downs CEO Bill Carstanjen said during a recent investors call. “Pari-mutuel wagering on horse racing is conducted under the Interstate Horseracing Act, which is a federal umbrella statute that essentially gives us a series of rights — call them intellectual property rights — in our content.
“To take wagers across any forum, whether it be a sports wagering platform, another horse racing platform, or a prediction markets platform, you need our express consent. You can’t just do it without that.
“We haven’t agreed to provide our content to prediction markets.”