The Kentucky Horse Racing and Gaming Corporation has approved the acquisition of Prime Sports by Plannatech. Meanwhile, discussions about regulating prediction markets are heating up in the state.
Jonathan Rabinowitz, the chairman of the corporation, expressed concerns during a recent board meeting, suggesting that Kentucky may soon follow other states in addressing the issue of prediction markets related to sports events. His comments came shortly after Attorney General Russell Coleman shared his views on social media regarding these markets.
Just under two weeks ago, Polymarket attempted to introduce contracts for the Kentucky Derby, but Churchill Downs intervened, requesting the market's removal. Rabinowitz noted, “I’ve had multiple discussions with the attorney general about prediction markets, and it wouldn’t surprise me if action is taken soon.” He emphasized that horse racing regulation is clear, which is why no prediction market was available for the Derby.
Last month, Coleman, alongside attorneys general from 39 other states and the District of Columbia, signed a letter to the U.S. Commodity Futures Trading Commission (CFTC). This letter urged the federal agency to prevent prediction market operators from offering contracts on sporting events, advocating for states to maintain control over sports betting regulations.
The letter was part of a larger response to nearly 2,000 comments received by the CFTC as it considers new rules allowing prediction markets to operate on sports events. Coleman stated, “There’s not a dollar’s worth of difference between prediction markets’ sports contracts and sports betting. We’re asking the federal government to recognize that states can protect our citizens.”
In contrast to state-licensed sportsbooks, prediction markets function as exchanges between bettors, taking a commission on transactions rather than directly betting against individuals. Operators like Kalshi and Crypto.com have been active in this space without federal intervention, especially after courts allowed Kalshi to offer contracts on political events.
CFTC Chairman Michael Selig has been a strong supporter of prediction market operators entering the sports sector. This expansion has prompted major sports betting companies like DraftKings and Fanatics to explore offering prediction markets in states where they currently lack licenses.