Kentucky AG May Target Prediction Markets, Gaming Chief Says

At a KHRGC meeting Tuesday, Jonathan Rabinowitz, chair of the Kentucky Horse Racing and Gaming Corporation, said Attorney General Russell Coleman is likely to take action in the coming months against prediction market operators that offer contracts on sporting events in Kentucky. The remark followed Coleman’s call for federal regulators to leave sports-betting oversight to the states.

Rabinowitz told the board he has met several times with the attorney general and would not be surprised if state enforcement begins soon. He noted that Kentucky’s racing regulator was contacted and no prediction market appeared for the Kentucky Derby.

On May 11 Coleman joined attorneys general from 39 states and the District of Columbia in a letter to the U.S. Commodity Futures Trading Commission asking the agency not to permit prediction markets to offer contracts on sporting events. Coleman wrote on X, “There’s not a dollar’s worth of difference between prediction markets’ sports contracts & sports betting,” and urged federal recognition of states’ authority to protect residents.

The topic drew attention after an operator initially listed markets tied to the Kentucky Derby. Churchill Downs asked the operator to remove the market and the operator complied. Several states, including Ohio, Massachusetts, Maryland, Nevada and Washington, have already taken regulatory or enforcement steps against platforms offering sports-related contracts.

During the recent legislative session, Kentucky lawmakers passed House Bill 904, which bars sportsbooks licensed by the KHRGC from offering prediction-market products in the state. Lawmakers also approved a measure imposing a 14.25% tax on prediction market operators’ adjusted revenue, the same rate applied to Kentucky’s online sportsbooks.

Prediction markets function as exchanges where users trade contracts with one another and the platform charges fees or commissions on transactions. Sportsbooks accept bets directly and generate revenue from losing wagers. Some prediction-market firms operate internal market-making desks that buy and sell contracts to provide liquidity and may profit from those trades.

Companies such as Kalshi and Crypto.com have offered sports markets for more than a year. CFTC Chairman Michael Selig has expressed support for allowing prediction markets to expand into sports. Some sports-betting companies have added prediction-market-style products in jurisdictions where they do not hold sportsbook licenses.

Separately, the KHRGC unanimously approved Plannatech’s acquisition of Prime Sports and the transfer of the platform’s license, pending final bankruptcy court approval. Prime Sports launched in Kentucky on July 28, 2025, and filed for Chapter 11 in November 2025. An amended reorganization plan filed last month proposes that Plannatech will assume ownership once court approvals are complete. Plannatech holds an information services provider license in Kentucky and operates the Betcris brand in Arizona. The license transfer will not take effect until the bankruptcy court issues a final order.