… it should be regulated like a duck
In the world of harness racing, we are accustomed to a certain level of transparency. When a Standardbred steps onto the track, there is a clear social and economic contract in place. The fans in the stands and on ADW platforms contribute to the lifeblood of our sport through the pari-mutuel pools — a system where we play against one another, and a portion of every dollar wagered returns to the industry to fund purses, health insurance for horsepeople, and the very measures that regulate the integrity of the sport.
But today, that ecosystem is under threat from a new breed of “financial” platforms that are in reality nothing more than offshore sportsbooks dressed up in the Sunday best of Silicon Valley tech speak. I am talking about prediction markets, and it is precisely why the USTA has thrown its full weight behind the Prediction Markets Are Gambling Act (S. 4160), which on March 23 was introduced in the United States Senate by Senators John Curtis (R-Utah) and Adam Schiff (D-Calif.).
A prediction market — Polymarket and Kalshi are the two most prevalent in the United States — is basically a hybrid of betting and stock trading, but instead of betting against a casino, you’re trading with other people on what will happen in the future. In harness racing, a prediction market works a lot like traditional betting, but with a key difference: you’re trading probabilities with other people instead of just betting against a bookmaker. It is like fixed-odds wagering, but with a twist: Oversight is minimal, and prediction markets return nothing to the industries that produce their content.
For decades, racetracks and horsepeople have operated under a rigorous set of state and federal regulations. They pay taxes, contribute to the local economy, and adhere to strict consumer protection laws. Prediction markets, however, have attempted to skirt these responsibilities by claiming they offer “event contracts” rather than bets. They also emphasize price discovery. The core pitch is that markets aggregate dispersed knowledge better than polls and pundits (or horseplayers), so the activity serves a public good — producing forecasts that consumers can use. Under that framing, any profit or loss is a byproduct of contributing information, not the primary purpose.
It is a distinction without a difference, so let’s call it what it is. It’s gambling.
The USTA’s support for the Prediction Markets Are Gambling Act isn’t about being “anti-technology” or “anti-innovation.” It is about being fair.
Mike Tanner
If you are wagering on the outcome of a race or a legislative event, you are gambling. Yet, these platforms currently operate in a gray area, untaxed and unregulated. It is fundamentally unfair to ask a brick-and-mortar racetrack to play by one set of rules while a digital platform operates with total impunity, stripping potential handle away from the pari-mutuel pools that help sustain our industry’s breeders, owners and trainers — and paying not a single penny in taxes or fees.
And make no mistake: This is big business. Estimates vary depending on methodology, but the most widely cited figures put total prediction market trading (i.e., dollars “wagered”) in 2025 at roughly $60-65 billion globally, with the vast majority coming from prediction market platforms. The sharps have noticed. A recent Wall Street Journal analysis found that just 0.1% of Polymarket accounts win 67% of the profits. “Casual traders,” the article pointed out, “are bleeding cash while a number of sophisticated pros, including trading firms with access to vast streams of data, eat their lunch.”
Pari-mutuel racing already is a prediction market of sorts, but it’s one that’s tightly coupled to the sport itself. Odds reflect not just probabilities, but also liquidity constraints, bettor psychology, and takeout. Introducing a parallel prediction market risks fragmenting that liquidity. Instead of one deep pool determining odds, you get multiple thinner ones, which can make prices less reliable and easier to manipulate, especially in a niche sport like harness racing, where betting volume is already limited.
The Prediction Markets Are Gambling Act would address much of this. The bill would shift these markets more firmly under gambling-style oversight rather than treating them as financial or commodities trading platforms regulated by the Commodity Futures Trading Commission. That means many prediction market operators would likely need to comply with state gaming laws, obtain gambling licenses, and face stricter limits on the kinds of events they can offer contracts on.
The central goal is straightforward: Remove ambiguity and regulate prediction markets on how they actually function, not how they’re labeled. The USTA’s support for the Prediction Markets Are Gambling Act isn’t about being “anti-technology” or “anti-innovation.” It is about being fair. Strip away the novelty, the noise and the clever framing, and what’s left is a sobering truth: Prediction markets aren’t “information exchanges” or vehicles for “price discovery.” What they are is much simpler. It’s just people, betting.
Mike
This column appears in the June 2026 issue of Hoof Beats, the official magazine of the USTA. To learn more, or to become a subscriber to harness racing’s premier monthly publication, click here.