The rise of prediction markets like Kalshi and Polymarket has been a growing threat to traditional sports betting. These platforms let you bet on almost anything — election outcomes, weather patterns, and yes, sports. But when it comes to the Kentucky Derby, the most famous horse race in America, prediction markets are conspicuously absent. If you want to back a horse this year, you'll need to go to an old-school sportsbook like DraftKings (DKNG) or Flutter Entertainment (FLUT).

The 152nd running of the Kentucky Derby is set for Saturday, May 2, at Churchill Downs Racetrack, owned by Churchill Downs Inc. (CHDN). The race will air on NBC and Peacock, part of Comcast Corporation (CMCSA). And the betting? That's handled by DraftKings, FanDuel (owned by Flutter), and Churchill Downs' own platform, TwinSpires. Prediction markets? Not invited.

Polymarket briefly opened a market for the 2026 Derby but quickly shut it down after Churchill Downs asked them to. “We reached out to Polymarket and asked for the wagers to be removed,” a Churchill Downs spokesperson told ESPN. “And Polymarket complied.” A search for Kentucky Derby on Polymarket shows a 2025 market that saw $1.2 million in betting volume, with winning horse Sovereignty drawing $83,791 in bets. But for 2026, nothing.

So why are prediction markets sitting this one out? The answer is mostly legal, and it goes back decades. The Interstate Horseracing Act of 1978 gave state racing commissions the power to decide what events can be wagered on at their racetracks. That law effectively blocks prediction markets from offering horse racing bets without permission from the states and tracks. And the horse racing industry is not about to give that permission.

National Thoroughbred Racing Association CEO Tom Rooney has been vocal about keeping prediction markets out. He sent a letter to the Commodity Futures Trading Commission this month warning that prediction markets offering wagering would “cause substantial economic harm to the horse racing industry.” The industry is fighting on multiple fronts: state legislators in Kentucky recently passed a bill making it illegal for state racetracks to cut side deals with prediction markets.

The financial stakes are enormous. Last year's Kentucky Derby saw $234 million in wagers, and the week's events at Churchill Downs brought in another $239 million. A percentage of that betting handle goes to the state for future prize money, racetrack support, and horse breeding programs. The wagering system for horse racing has been in place for decades, and the industry warns that disruption could change the sport — and not in a good way.

For now, the Kentucky Derby and much of American horse racing appear to be prediction market proof. That's good news for Churchill Downs and other sports betting operators, who have partnerships with the race and racetrack. Prediction markets have taken over other sports leagues with partnerships and are likely eating into market share from online sportsbooks. But for the 2026 Kentucky Derby, horse racing won't have to worry.