Kentucky regulators believe the state could soon move against prediction market operators offering sports-related contracts, adding to growing pressure on platforms such as Kalshi and Polymarket across the United States.
Jonathan Rabinowitz, chairman of the Kentucky Horse Racing and Gaming Corporation (KHRGC), said he would not be surprised if Attorney General Russell Coleman takes action within the next few months. Rabinowitz made the comments during a KHRGC board meeting after Coleman publicly criticized sports prediction markets on social media.
The issue gained attention ahead of this year’s Kentucky Derby. Polymarket briefly listed contracts tied to the famous horse race before removing them following contact from Churchill Downs. Rabinowitz pointed to the incident as evidence that horse racing oversight in Kentucky already falls under clear regulatory authority.
Coleman recently joined attorneys general from 39 states and Washington, D.C. in a letter sent to the Commodity Futures Trading Commission (CFTC). The group urged the federal regulator not to allow prediction market companies to expand into sports event contracts, arguing that sports betting regulation should remain under state control.
The debate centers on whether prediction markets should be treated as financial products or gambling. CFTC chairman Michael Selig recently defended the sector, saying prediction markets and sportsbooks are fundamentally different products. Industry critics, including state regulators and gambling groups, disagree and argue there is little distinction between the two.
Kentucky lawmakers have already taken steps aimed at limiting the growth of prediction-style wagering. House Bill 904 prevents licensed sportsbooks in the state from offering prediction market products. Legislators also approved a separate measure imposing a 14.25% tax on adjusted revenue generated by prediction market operators, matching the rate applied to online sportsbooks.
During the same KHRGC meeting, regulators unanimously approved Plannatech’s acquisition of Prime Sports. The sportsbook operator entered Chapter 11 bankruptcy proceedings last year, with Plannatech set to assume ownership once final court approval is granted. Prime Sports currently operates in Kentucky, Ohio and New Jersey, while Plannatech also runs the Betcris brand in Arizona.