Why you won't find horse racing bets on prediction markets

Summary

Marketplace Morning Report

Episode Summary: Why you won't find horse racing bets on prediction markets

Date: May 15, 2026
Host: Nancy Marshall Genzer
Reporters: Caitlin Tan
Guests: Pat Cummings (National Thoroughbred Alliance), John Stetton, Marshall Graham (Economics Professor, Rhodes College, horse breeder), Dan Aubel (OpenSecrets Senior Researcher)

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Episode Overview

This episode explores why horse racing, despite America’s long tradition of betting on the sport, is absent from the blossoming world of online prediction markets like Kalshi and Polymarket. The conversation delves into industry control, regulatory frameworks, and the changing culture of betting. Plus, a fast-paced look at shifting leadership at the Federal Reserve and a sharp uptick in defense industry lobbying as the Pentagon budget balloons.

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Main Theme:

Why horse racing is left out of surging online prediction markets despite a long legal and cultural history of betting on the sport.

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Key Discussion Points & Insights

1. Declining Bets on Horse Racing (01:29)

• Host Nancy Marshall Genzer introduces the topic, noting that while the Preakness Stakes is a storied event, betting on horse racing overall is now down by more than 50% from its peak.
• Despite new forms of sports betting becoming popular, horse racing has not been swept up in the rise of prediction markets.

2. The Allure and History of the Preakness (02:07–02:29)

• Pat Cummings shares memories of his favorite race:

  “Smarty Jones winning in 2004... I grew up in Philadelphia and it was just such incredible because the Philadelphia horse had won." (02:19 – Pat Cummings)

• Marshall Graham and horse racing fans recall the tradition and excitement, underscoring the emotional resonance of historic races.

• John Stetton recalls his family's deep connection to the racetrack, highlighting the generational culture:

  "My mom was at the racetrack the day before I was born and at the racetrack about four or five days after I was born. With me and a stroller." (02:36 – John Stetton)

3. Why Prediction Markets Can’t Tap In (02:45–03:32)

• Pat Cummings explains the core issue:

  “Back then you bet in person. Now, you don’t have to be at the track. You can bet online, but all through platforms okayed by the racing industry. And that doesn’t include prediction markets.” (02:45 – Pat Cummings)

• John Stetton underscores the industry’s incentives:

  “For the industry, it’s better to lock them out and just keep all the money for themselves and restrict where I wager.” (02:58 – John Stetton)

• The reason, according to Cummings, is a federal law from 1978 that grants racetracks and horsemen control over their product, closing the door to outside platforms:

  “Racetracks and horsemen control their product... because of a 1978 federal commerce law that still could face legal tests. But for now, the prediction markets haven’t gone that route.” (03:04 – Pat Cummings)

• Marshall Graham, asked for a prediction for tomorrow’s race, points out you won’t find it on prediction markets:

  “Let’s see... I will go with the hell we did. It'll be my long shot pick. But for now that bet’s not likely on Kalshee or Polymarket.” (03:25 – Marshall Graham)

4. Broader Economic Stories: Fed and Defense Lobbying

Federal Reserve Leadership Shift (03:39)

• Jerome Powell’s term as chair ends, and Kevin Warsh is set to take over, with Powell remaining on the board to oversee administration investigations.
• This is a brief report without discussion.

Big Defense Budget & Lobbying Surge (06:02–09:45)

• President Trump’s request for a $1.5 trillion Pentagon budget (a 40% jump), with lobbying by defense contractors surging 10% over last year.

• Dan Aubel, OpenSecrets Senior Researcher, gives data-driven context:

  “Last year we saw a 24% jump in spending. So they are now spending over $50 million every three months.” (06:44 – Dan Aubel) “The majority of the money is spent by the big five prime contractors such as Lockheed Martin and RTX... Lockheed Martin, in particular, spent $15 million in 2025 and has already spent more than $4 million in the first quarter of 2026.” (07:09 – Dan Aubel) “Top 10 lobby spenders made up 40% of the total... they did spend almost $200 million last year, which is a substantial amount to get their foot in the door.” (08:49 – Dan Aubel)

• Nancy Marshall Genzer asks:

  “So is all this paying off? ...Did the companies that lobbied the most last year get the biggest contracts this year. Is there a correlation?” (08:37)

• Aubel answers:

  “They are clearly getting more than their money's worth. They have increased spending every year for the last five years, so there is evidence that they feel the same.” (09:45)

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Notable Quotes & Memorable Moments

• Pat Cummings on tradition (02:19): "It was just such incredible because the Philadelphia horse had won."
• John Stetton on racing’s generational culture (02:36): “My mom was at the racetrack the day before I was born and at the racetrack about four or five days after I was born. With me and a stroller.”
• On restricted betting (02:58): “For the industry, it’s better to lock them out and just keep all the money for themselves and restrict where I wager.” – John Stetton
• On federal law blocking outsiders (03:04): “Racetracks and horsemen control their product... because of a 1978 federal commerce law.”
• Defense lobbying boom (06:44): “They are now spending over $50 million every three months.” – Dan Aubel

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Important Timestamps

• 01:29 – Host introduces topic of prediction markets and horse racing.
• 02:07–02:29 – Guest reminiscences on favorite Preakness memory and horse racing’s culture.
• 02:45–03:32 – Why prediction markets can’t touch horse racing bets – industry control and federal law.
• 03:39 – Federal Reserve chair transition brief.
• 06:02 – Pentagon budget and defense sector lobbying surge, with OpenSecrets data.
• 09:45 – Wrap-up of industry advantage from lobbying investments.

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Tone & Style

The episode balances economic analysis with personal narrative, conversational interviews, and clear reporting — all delivered in Marketplace’s signature concise, accessible tone.

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Summary

In under 10 minutes, the episode explains why horse racing, despite its long tradition of legalized betting, is not offered on today’s booming online prediction markets: The industry’s legacy control, protected by a 1978 federal law, keeps outside platforms at bay. Through stakeholder anecdotes and expert commentary, the episode illustrates the intersection of regulation, industry interests, and market evolution. Elsewhere, it surfaces headline economic stories: major defense budget debates and the powerful impact of lobbying, underlining the deep connections between politics, money, and policy.

Transcript

[Narrator/Announcer]

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[Nancy Marshall Genser]

why Prediction Markets Are a Horse of a Different Color from Marketplace I'm Nancy Marshall Genser in Washington. Tomorrow is the Preakness Stakes, the second event in the Triple Crown. Americans have been able to bet on horse racing longer than any other sport, but interest has waned in the past couple decades. Betting on racing is down by more than 50%. You might think prediction markets would see this as fertile ground, but even though sports betting on platforms like Kalshee and Polymarket is surging, they have not made inroads in horse racing. Marketplace's Caitlin Tan did some digging into why.

[Pat Cummings]

Pat Cummings remembers his favorite Preakness race,

[Race Announcer]

Smarty Jones, winning in 2004.

[Marshall Graham]

And they're off. Smarty Jones gets off to a good beginning.

[Race Announcer]

I grew up in Philadelphia and it was just such incredible because the Philadelphia horse had won it side he's going

[Marshall Graham]

to win by a colossal margin.

[Nancy Marshall Genser]

Here is Smarty Jones.

[Pat Cummings]

Cummings is with the National Thoroughbred Alliance. He bets on horses all the time. So does John Stetton.

[John Stetton]

My mom was at the racetrack the day before I was born and at the racetrack about four or five days after I was born. With me and a stroller.

[Pat Cummings]

Back then you bet in person. Now. You don't have to be at the track. You can bet online, but all through platforms okayed by the racing industry. And that doesn't include prediction markets.

[John Stetton]

For the industry. It's better to lock them out and just keep all the money for themselves and restrict where I wager.

[Pat Cummings]

Racetracks and horsemen control their product the race because of a 1978 federal commerce

[Marshall Graham]

law that still could face legal tests. But for now, the prediction markets haven't gone that route.

[Pat Cummings]

Marshall Graham is a Rhodes College Economics professor and horse breeder. He's a and he's looking to tomorrow's lineup.

[Marshall Graham]

Since I'm on the spot here, let's see. I will go with the hell we did. It'll be my long shot pick.

[Pat Cummings]

But for now that bet's not likely on Kalshee or Polymarket. I'm Caitlin Tan for Marketplace.

[Nancy Marshall Genser]

Jerome Powell's term as chair of the Federal Reserve comes to an end today. Kevin Warsh will be sworn in to succeed him. Powell is set to continue on as a member of the Fed Board of Governors. For now, he said he'll stay on to see through the end of the Trump administration's investig investigation of the remodeling of Fed headquarters.

[Race Announcer]

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[Nancy Marshall Genser]

President Trump is requesting one and a half trillion dollars for the Pentagon next year. That's about a 40% increase from the current fiscal year. Of course, Congress will have the final say here. Lobbyists are chiming in, too. In fact, lobbying by the defense sector increased 10% in just the first quarter of this year compared to the same time last year. That's according to Open Secrets, a nonprofit that tracks money in politics. Joining us now is Dan Aubel, a senior researcher at Open Secrets. Good morning.

[Sponsor Voice]

Good morning.

[Nancy Marshall Genser]

We saw the biggest spike this century in lobbying by the defense industry in 2025. That is, according to Open Secrets data. So how much of an increase are we talking about here?

[Marshall Graham]

Well, they increase their spending every year, really, Especially in the last five years. But last year we saw a 24% jump in spending. So they are now spending over $50 million every three months.

[Nancy Marshall Genser]

Wow. So who's doing the most lobbying here and who are they lobbying, Dan? Is it members of Congress? The Trump administration? All of the above?

[Marshall Graham]

All of the above, really? There are both large and small companies doing the lobbying. The majority of the money is spent by the big five prime contractors such as Lockheed Martin and rtx, which used to be called Raytheon. Lockheed Martin, in particular, spent $15 million in 2025 and has already spent more than 4 million in the first quarter of 2026.

[Nancy Marshall Genser]

A lot of money. So why has lobbying increased so much by these military contractors? Is it just that they see how much President Trump wants to increase military spending and they want to be sure they get their piece of the pie?

[Marshall Graham]

That is generally a strong motivator for lobbying. The defense industry has an appropriations bill that comes up every year and is huge now, over a trillion dollars. And in addition to that, we are now in a more warlike posture. So a lot of these companies are lobbying to get their piece of renewing the stockpiles of arms that are being used. For instance, they will specifically mention weapons programs that are important to them, as well as advocating for easier ways to sell military equipment and services and weapons abroad.

[Nancy Marshall Genser]

So is all this paying off? I mean, is it becoming easier for these companies to sell weapons abroad? Did the companies that lobbied the most last year get the biggest contracts this year. Is there a correlation?

[Marshall Graham]

The industry is very top heavy with those really big manufacturers and contractors spending most of the lobbying money. So for instance, the top 10 lobby spenders made up 40% of the total defense industry lobbying effort in 2025. In fact, when you look at their lobbying numbers, compared to some other industries like pharmaceuticals, which spends the most, they almost seem small. But they did spend almost $200 million last year, which is a substantial amount to get their foot in the door. And that defense budget is now proposed to be a trillion and a half dollars. So they are clearly getting more than their money's worth. They have increased spending every year for the last five years, so there is evidence that they feel the same.

[Nancy Marshall Genser]

Dan Aubol is a senior researcher at Open Secrets. Thank you so much.

[Marshall Graham]

Thank you for having me.

[Nancy Marshall Genser]

In Washington, I'm Nancy Marshall Genzer with the Marketplace Morning Report from APM American Public Media.

[Maria]

I'm Maria, host of the Marketplace podcast. This is uncomfortable. And this week on the show we talk to Canadians boycotting the United States. We've had economic war declared on us, so it just feels like I am fighting for Canada as a soldier every single day. Plus, a financial therapist explains why aligning our spending with our values can feel so emotionally powerful.

[Pat Cummings]

It's one of the core needs that we have as humans is connection and connection to something bigger than us. And a boycott is something bigger than us.

[Maria]

Be sure to listen to this is uncomfortable. Wherever you get your podcasts.