TLDR
- Kentucky’s gaming board chairman expects the state’s attorney general to take action against prediction markets within months
- Polymarket pulled Kentucky Derby contracts after Churchill Downs requested their removal
- Kentucky’s attorney general joined 40 other state officials urging the CFTC to block sports contracts on prediction markets
- State lawmakers passed a bill banning licensed sportsbooks from offering prediction market products and a 14.25% tax on prediction market revenue
- The KHRGC approved Plannatech’s takeover of Prime Sports, which filed for bankruptcy in November 2025
The chairman of the Kentucky Horse Racing and Gaming Corporation said Tuesday he expects the state’s attorney general to take action against prediction markets in the coming months.
Jonathan Rabinowitz made the comments during a board meeting, one day after Attorney General Russell Coleman posted about prediction markets on X.
“I’ve had multiple meetings with the attorney general on prediction markets, and it would not surprise me if they took action in the next few months on behalf of the state,” Rabinowitz said.
The warning comes after Polymarket briefly offered contracts on the Kentucky Derby before Churchill Downs asked the operator to remove them. That happened less than two weeks before Tuesday’s meeting.
Rabinowitz pointed to horse racing regulation as a clear line. He said the state’s authority over the sport is why no prediction market was allowed on the Derby.
Coleman has already shown where he stands on the issue. Late last month, he joined attorneys general from 39 other states and the District of Columbia in signing a letter to the U.S. Commodity Futures Trading Commission.
The letter urged the CFTC to stop prediction market operators from offering contracts on sporting events. It also asked the agency to leave sports betting regulation to the states.
How Prediction Markets Differ From Sportsbooks
The CFTC received nearly 2,000 public comments as it weighs rules that could open the door for prediction markets to cover sports. Prediction markets work as exchanges between two bettors, while sportsbooks take bets directly and profit from losing wagers.
Prediction market operators earn money through commissions and transaction fees. Some also run internal market-making teams that provide liquidity and can generate additional revenue.
Kalshi and Crypto.com have been offering sports markets for over a year without CFTC enforcement. Their expansion into sports followed federal court rulings that allowed Kalshi to offer contracts on elections and political events.
CFTC Chairman Michael Selig, appointed by President Trump, has publicly supported prediction market operators moving into sports.
That growth pushed major sportsbook operators DraftKings, Fanatics, and FanDuel to start offering prediction markets in states where they lack sportsbook licenses.
Kentucky Lawmakers Already Took Steps
Kentucky’s legislature acted during the session that ended last month. apps.legislature.ky.gov/record/26rs/hb904.html bans state-licensed sportsbooks from offering prediction market products in Kentucky.
Lawmakers also passed a separate measure taxing prediction market operators at 14.25% on adjusted revenue. That matches the tax rate on the state’s online sportsbooks.
If the attorney general does act, Kentucky would join Ohio, Massachusetts, Maryland, Nevada, and Washington in going after prediction market platforms.
In other business Tuesday, the KHRGC unanimously approved Plannatech’s acquisition of Prime Sports and its online sports betting license. Prime Sports launched in Kentucky on July 28, 2025, but filed for Chapter 11 bankruptcy in November.
An amended reorganization plan filed last month named Plannatech as the new owner pending regulatory approvals. Plannatech already holds an information services provider license in Kentucky as Prime’s technology and risk management vendor.
KHRGC director of sports betting Hannah Simms told the board the license transfer won’t take effect until the bankruptcy court issues a final order. Prime Sports also operates in New Jersey and Ohio, while Plannatech runs operations in Arizona under the Betcris brand.
