NTRA vs. CFTC: The Legal Battle Over Kentucky Derby Prediction Markets
With the Kentucky Derby just weeks away, there has been controversy between the NTRA and the CFTC in regard to prediction markets. The National Thoroughbred Racing Association (NTRA) is claiming that the top prediction market apps will not be able to legally trade the Kentucky Derby.
On April 2, 2026, NTRA CEO Tom Rooney sent a letter to the Chair of the Commodity Futures Trading Commission (CFTC) sharing the potential for a legal proceeding.
Prediction markets may violate the existing legislation that surrounds Horse Racing Law and the gambling potential for these types of events.
Let’s dive into each side of this story, as the controversy between the NTRA and CFTC continues.
NTRA’s Side of the Legal Battle
Rooney’s letter focuses on the Interstate Horseracing Act of 1978 (IHA), a law to regulate interstate horse race wagering and ensure that betting revenue flows through the regulated racing industry.
The NTRA contends that the IHA overrides the Commodity Exchange Act in matters related to horse racing. Simply put, Congress established a dedicated law governing race betting, which takes priority over the trading regulations the CFTC seeks to apply to prediction markets.
When prediction market platforms like Kalshi and Polymarket offer contracts on the Kentucky Derby winner outside the IHA framework, they divert betting dollars from the system the racing industry relies on to operate.
CFTC’s Stance and Perspective
The CFTC continues to push for event contracts under federal law that allow prediction markets to field real-money trades on the most popular sporting events, politics, and much more.
They argue that states lack the power to override federal law, underscoring that prediction market regulation is a matter for federal authorities.
The CFTC’s ongoing push for public input on the potential to trade horse racing events, such as the Kentucky Derby, prompted Rooney to write his letter.
What to Expect Next
The 152nd Kentucky Derby is scheduled for Saturday, May 2, 2026. One of the biggest horse races of the year will take place at Churchill Downs in Louisville, Kentucky.
Here are a few of the horses’ names:
- Commandment
- Further Ado
- Renegade
- So Happy
- The Puma
We’ll have to wait and see if prediction market users will be able to trade on the potential winners of the “Run of the Roses” on the first Saturday in May.