Photo of Frankie Dettori and connections at Keeneland. (Jenny Doyle/Past The Wire)
Being able to bet a horse to lose always sounded appealing to me
By Jon Stettin
Horse racing is always behind. How odd a sport based on speed has not seen the front in decades. Even the new suites at Belmont look dated in the promos and the place isn’t even built yet.
Years ago, 2014 to be precise, I wrote that exchange wagering was the future of horse racing in the United States. It makes fixed odds look like Trixx, silly rabbit, Trixx are for kids. I said it loud and clear: we should get in front of it before it gets in front of us. But like too many other things in this game, we didn’t. The industry either didn’t listen, didn’t care, or didn’t understand what was coming. And now, here we are, exchange wagering has found its way into mainstream sports betting through something new called prediction wagering, and it’s already starting to cut into FanDuel and DraftKings’ action. That makes me half right. Thus far it is or was not the future of horse racing but it surely got in front of us.
This was always going to happen. When you have a product that allows the player to be the “house,” set their own prices, and trade positions in real time, that’s power and that’s engagement. That’s what exchange wagering offers, and why it always made so much sense for horse racing. Instead, we clung to outdated tote systems, absurd takeout rates, encouraged a CAW takeover, and a maze that made innovation impossible.
Sports Betting vs. Prediction Wagering: Same Game, Different Field
There’s a big difference between sports betting as we know it and prediction wagering. Traditional sports betting is run through state-regulated books each state with its own set of rules, taxes, and restrictions. You can bet in New Jersey but not in Texas. You can parlay in one state but not another. It’s all over the place. That patchwork slows growth and innovation, and it leaves every operator fighting for thin margins under a mountain of regulation.
Prediction wagering, on the other hand, is federally regulated, and it all falls under one law, the Commodity Exchange Act. That’s right, the same foundation that regulates Wall Street. Instead of state gaming commissions, prediction platforms operate as federally licensed exchanges, just like commodity or stock markets. You’re not betting against a sportsbook; you’re trading on outcomes, whether a team wins, a fighter lasts the distance, or even if a politician gets re-elected. It’s not a parlay; it’s a position. You buy and sell probabilities like stock traders do shares. A sharp horse players dream in today’s game.
Wall Street’s Involvement and What It Means
Here’s where it gets interesting. Wall Street loves it. Big capital is already behind prediction markets because they see what most in racing missed: liquidity, transparency, and scalability. For now, they’re leaning in. They see the same efficiencies that made Betfair a monster overseas and wonder why the U.S. stayed asleep for two decades. These exchanges don’t just cater to gamblers, they attract analysts, data scientists, and retail investors who understand probability and price movement.
Sound familiar? It should. It’s the same dynamic we could’ve had in horse racing. Imagine if bettors could trade odds, hedge positions, or lay horses mid-race like Betfair does. We’d have a vibrant, liquid, living marketplace instead of pools that close 30 seconds before the break with last-second odds drops. The two minute “promise” doesn’t look to me like it changed things all that much.
The Irony of It All
The irony isn’t lost on me. I said years ago that if we didn’t evolve, someone else would and they’d eat our lunch. That’s exactly what’s happening now. Prediction wagering is exchange wagering reborn under a different name and a more sophisticated umbrella. While we argued over betamethasone, crop rules and whip counts, others built technology that’s now redefining how people engage with risk, probability, and sport.
Horse racing should’ve led this revolution. We had the perfect product, the built-in liquidity, and the most passionate players. Instead, we’ve become spectators to an innovation we should’ve owned.
Final Thoughts
As prediction markets grow, and as Wall Street money legitimizes them, sports betting as we know it will have to adapt—or fade. And horse racing? We’ll be playing catch-up again, just like we always do, watching others profit from what could’ve been ours. We’re so far behind we think we’re in front.
I said it before and I’ll say it again: exchange wagering was and still is the future. We just chose not to show up for the present. Had it been legally available in California Chrome’s Belmont I’d be writing this from my yacht off the coast of Sardinia. It’d be a super cherry yacht too.
