Churchill Downs Blocks Derby Markets as CFTC Reviews Rules

Churchill Downs Inc. persuaded prediction platforms Polymarket and Novig to remove contracts tied to the 152nd Kentucky Derby ahead of Saturday’s race. Kalshi did not list Derby markets. The takedowns occurred as the Commodity Futures Trading Commission wrapped up a public comment period on proposed rules for prediction markets.

Polymarket and Novig closed their Derby markets shortly after opening them. Novig posted in its Discord channel that the markets were removed after “important discussions.” Churchill Downs engaged with the platforms before the race.

The National Thoroughbred Racing Association urged enforcement of the Interstate Horseracing Act to block off‑track contracts that could affect pari‑mutuel pools. NTRA president Tom Rooney raised those concerns with regulators and market operators.

The CFTC received submissions from professional sports leagues, players’ unions, members of Congress, state regulators, tribal gaming entities, gambling companies, banks and prediction market operators during the public comment period that ended Thursday.

Commenters disagreed on the legal test for permissible event contracts. Some industry groups recommended the agency require a demonstrable real‑world financial element and to classify casino‑style games as “gaming,” which would exclude those products from prediction‑market treatment.

CFTC Chairman Mike Selig indicated the agency is considering limits on certain sports wagers. He suggested player proposition bets and parlays could be placed on a “do not touch” list while other event contracts might be allowed.

An industry analysis found 69% of sports‑event contract trading volume on prediction platforms originates in states without regulated sports betting, with 43% concentrated in California and Texas. The report said prediction markets represented about 11% of over‑the‑counter sports betting handle in March and that one platform ranked fourth largest by handle that month.

Kentucky lawmakers included fixed‑odds wagering in recent gambling reforms to address computer‑assisted wagering that can rapidly change pari‑mutuel odds. Churchill Downs’ parent company told reporters it will not offer fixed‑odds wagering at its racetrack properties, citing concerns about effects on pari‑mutuel pools.

The Colorado state Senate approved a sports‑betting reform package by a 20‑14 vote that would ban sportsbook push notifications, curb advertising and cap the number of daily deposits a customer can make. Legislators removed an earlier provision that would have prohibited prop bets and struck language that would have barred operators from restricting or closing accounts of successful bettors.

Massachusetts adopted a rule earlier this year requiring operators to tell customers why they are being limited. The measure has been referenced by bettors and industry participants as an example of account‑limitation transparency.

Market operators, regulators and racing officials are awaiting final CFTC guidance on which event contracts will be permitted, which types of wagers may be restricted and how the agency will treat casino‑style products versus event‑based contracts.