Is Horse Racing Rigged to Benefit a Select Few? Class-Action Lawsuit Alleges So
A proposed class-action lawsuit alleging collusion to rig betting outcomes through computer-assisted wagering (CAW) systems has been filed in New York's Eastern District Court against a number of the major stakeholders in the horse racing industry.
The complaint was filed in New York on behalf of lead plaintiff Ryan Dickey and other people in a similar situation by Hagens Berman, a nationally renowned law firm with headquarters in Seattle that specializes in class-action litigation.
Dickey has lived in Colorado for the past 20 years and has a long history of betting on horse racing. Dickey says he used to live in Kentucky, where he bet on races for roughly $100 a week, mostly through Churchill Downs, Inc.'s advanced deposit wagering (ADW) company TwinSpires.
Dickey's attorneys assert that the defendants have banded together to use "Insider Betting Groups" to take advantage of "ordinary bettors" like their client. The organizations are purportedly made up of affluent gamblers who profit from transferring "billions to a small group of inside bettors and the operators of racetracks and betting platforms" through algorithms, artificial intelligence (AI), and other insider knowledge.
Allegations in the Case
"High-volume parimutuel betting done by professional teams using models, direct tote connections, and automation to fire thousands of highly targeted bets — often in the final seconds before pools close" is how the lawsuit defines CAW.
According to the lawsuit, the CAW schemes keep an eye on pricing and data in real time, with the AI calculating fair odds in real time and taking advantage of favorable opportunities. In addition to having special connections for quicker bet placing, high-volume wagering facilitators frequently receive reduced fees from tracks and ADW operators.
Elite Turf Club is a CAW that is 20% held by the New York Racing Association (NYRA) and 80% controlled by Stronach Group. Another defendant is Velocity Wagering. Churchill Downs is the owner of Velocity, a CAW.
The biggest betting processor in North America, AmTote, is also listed as a defendant. In essence, AmTote is a parimutuel wagering clearinghouse. Every year, it manages bets totaling more over $15 billion. AmTote is a subsidiary of Stronach.
According to the Racketeer Influenced and Corrupt Organizations (RICO) Act, compensatory and treble damages are sought in this complaint.
Stronach Requests Termination
Elite Turf Club and AmTote referred to the horse racing case that named them as defendants as "meritless" in a joint statement.
"The lawsuit fundamentally misrepresents the nature of computer-assisted wagering and the role Elite Turf Club and AmTote have in operating, managing, and regulating wagering activity. CAW is a long-standing industry, federal- and state-regulated component of the North American and global parimutuel wagering system. All participation in CAW is subject to the same pool rules, tote system audits, and state regulatory approvals that govern all other forms of wagering,” the companies said.
“Claims that CAWs receive an unfair advantage are unfounded and ignore the safeguards built into the regulatory and technological framework for racing,” the release continued.
Churchill Downs has not yet addressed the lawsuit.
