The Kentucky Derby, the nation’s largest horse race, takes place Saturday in Louisville. If you are looking to bet on Kalshi, Polymarket or any other event-related prediction platform, you are out of luck.
The major prediction platform, which hosts contracts for everything from sports results to geopolitical events to reality TV moments, does not offer event contracts for the Kentucky Derby, but horse racing is not included.
CEO Bill Karstanjen, churchill downs racetrack, The company, which owns the Kentucky Derby and the racetrack where it is held, told CNBC that the horse race is unlikely to appear on the betting market because racetrack owners don’t want it to happen.
“They actually have to go to us, the owners of the circuit, to get a deal,” Karstanjen said in an interview this week. “And from our perspective, that’s not what we want to do.”
Horse racing has long been like its own little fiefdom. Betting on races, an original American form of sports betting dating back to colonial times, had a special status even before the Supreme Court in 2018 struck down a law that prohibited sports betting from being offered in states other than Nevada.
By law, under the Interstate Horse Racing Act of 1978, betting on horses requires express permission from the host racetrack, the horse racing organization made up of owners and trainers, and the state horse racing commission where the race is held.
This puts the rapidly growing prediction market industry at a disadvantage.
“Prediction markets are not good for horse racing or our industry’s economic paradigm of funding horse racing winners,” Carstanjen said.
Carsi declined to comment on the lack of horse racing on the platform. Polymarket did not respond to a request for comment. Representatives from the Commodity Futures Trading Commission, which regulates event contracts, similarly did not respond to requests for comment.
This tension raises interesting questions about when and under what circumstances prediction market platforms need permission to offer contracts on specific events.
States in the U.S. insist that companies like Calci and Polymarket need permission (through licensing) to offer sports betting. Prediction platforms claim that they do not need a license because their platforms offer investment and trading activities, not gambling, and are regulated by the CFTC.
The CFTC has filed multiple lawsuits against states to prevent them from taking action against predictive platforms.
Kentucky, on the other hand, is taking a tough stance on predictions. Lawmakers in the state are proposing a bill that would ban gambling licensees from providing predictions. It is also proposed to impose a 17.5% tax on prediction market fees.
Meanwhile, Saturday’s derby still offers some old-fashioned gambling. Churchill Downs said betting is up during Derby week leading up to the big race.
caesars, He also said the amount of money wagered on the Kentucky Derby was higher than expected.
—CNBC’s Jessica Golden contributed to this report.
Disclosure: Kalsi and CNBC have a commercial relationship that includes a minority investment.
