It's a question of scale. A few horses aren't a big deal, and both sides (the horse racing, and the bet) are heavily constrained in scope. Both sides become far less constrained with prediction markets.

Maybe if we were objective, horse betting should be shut down -- but we kinda don't care.

Match-fixing likely has just become part of the game and the odds.

Which comes back around to the original comment: the existence of a predictions market influences the outcome of the event being predicted, and in the worst case this effect is so large that it completely invalidates the purpose of attempting to predict the outcome in the first place; the tail wags the dog.