Kentucky Gaming Official Believes State’s Attorney General To Target Prediction Markets
Kentucky Horse Racing and Gaming Corporation also OKs Plannatech takeover of Prime Sports
Across the country, several states have taken action against prediction market operators for offering contracts on sporting events in their jurisdictions, and one Kentucky official believes the Bluegrass State may soon join that group.
Jonathan Rabinowitz, chairman of the Kentucky Horse Racing and Gaming Corporation, shared his viewpoint with his fellow board members toward the end of their meeting Tuesday. That came one day after state Attorney General Russell Coleman posted his thoughts regarding prediction markets offering contracts on sporting events on the social media platform X.
Less than two weeks ago, Polymarket initially offered contracts on the Kentucky Derby before Churchill Downs contacted the operator and requested it pull the market from its site.
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. “It’s very clear who regulates horse racing, and that’s why there was no prediction market on horse racing for the Derby.”
Late last month, Coleman joined attorneys general from 39 other states and the District of Columbia in signing a letter to the U.S. Commodity Futures Trading Commission urging the federal agency that oversees prediction markets to refrain from letting those operators offer markets on sporting events and leave the power to regulate sports betting to the states.
The letter from the state-level top cops was one of nearly 2,000 comments the CFTC received from stakeholders and the public as it considers implementing rules that would allow sporting events to be fair game for prediction market operators.
Prediction Markets vs. Sportsbooks
The biggest difference between federally regulated prediction markets and state-licensed sportsbooks is that the prediction market serves as an exchange between two bettors. A sportsbook takes the action against a bettor, allowing the sportsbooks to generate revenue on the losing wagers of bettors. Prediction markets make a commission or charge a fee for the transactions they process. However, those operators may also have internal market-making teams that provide liquidity to facilitate trades, and those teams can also generate revenue for the operators based on the success of their trades.
Operators like Kalshi and Crypto.com have been offering sports markets for more than a year without the federal regulatory agency taking action against them. Their moves into sports came shortly after federal courts allowed Kalshi to begin offering contracts on elections and other political events.
CFTC Chairman Michael Selig, appointed by President Trump, has been a vocal cheerleader for prediction market operators venturing into sports.
The growth in prediction markets prompted sports betting operators DraftKings, Fanatics, and FanDuel to begin offering them in states where they are not currently licensed to operate sportsbooks.
Kentucky Lawmakers Also Take Aim
While Kentucky could soon join the ranks of Ohio, Massachusetts, Maryland, Nevada, and Washington in going after prediction market platforms, state lawmakers have already made moves along those lines.
The Kentucky General Assembly took steps to keep sports-minded prediction markets out of the state during the legislative session that concluded last month. House Bill 904 bans sportsbooks licensed by the KHRGC from offering prediction market products in the state.
Lawmakers also passed a separate measure that levies a 14.25% tax on prediction market operators’ adjusted revenue. That’s the same rate Kentucky taxes its online sportsbooks.
Kentucky Approves Plannatech’s Prime Sports Acquisition
Earlier in the meeting, the KHRGC unanimously approved Plannatech becoming the owner of Prime Sports and taking over the license for the online sports betting platform.
Prime Sports launched in Kentucky on July 28, 2025, making it the third state for the platform. However, the operator filed for Chapter 11 reorganization in federal bankruptcy court in November of last year. In an amended reorganization plan filed with the court last month, Prime Sports said Plannatech would take over ownership, pending regulatory approvals, once it emerged from bankruptcy.
Plannatech holds an information services provider license in Kentucky, as it serves as Prime’s technology platform and risk management vendor.
Hannah Simms, the KHRGC director of sports betting, told the board the license change would not officially take effect until the bankruptcy court issues a final order on Prime Sports’ reorganization.
Besides Kentucky, Prime Sports also operates in New Jersey and Ohio. Plannatech also operates in Arizona under the Betcris brand.
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