- A proposed class-action lawsuit in federal court alleges horse racing is rigged to benefit a select few
- The litigation claims computer-assisted wagering platform wrongs ordinary bettors
A proposed class-action lawsuit filed in New York’s Eastern District Court against several of the horse racing industry’s biggest players levies allegations that the companies have colluded to rig betting outcomes through computer-assisted wagering (CAW) schemes.
Hagens Berman, a Seattle-based nationally recognized law firm known for its class-action lawsuits, filed the complaint in New York on behalf of lead plaintiff Ryan Dickey and other similarly situated individuals.
Dickey is a Colorado resident with an extensive history of wagering on thoroughbred racing for the past two decades. Dickey claims to have previously resided in Kentucky, where he wagered about $100 per week on racing, primarily through TwinSpires, an advanced deposit wagering (ADW) business owned by Churchill Downs, Inc..
Dickey’s lawyers claim that the defendants have conspired to exploit so-called “ordinary bettors” like their client through so-called “Insider Betting Groups.” The groups allegedly consist of wealthy bettors who benefit from using algorithms, artificial intelligence (AI), and other inside information to transfer “billions to a small group of inside bettors and the operators of racetracks and betting platforms.”
Case Allegations
The complaint describes CAW as “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.”
The litigation says the CAW schemes monitor real-time pricing and data, with the AI computing fair odds in real time and pouncing when an attractive opening arises. The high-volume wagering facilitators often are provided lower fees from tracks and ADW operators, and have privileged connections for faster bet placement.
The case named Elite Turf Club, a CAW that is 80% owned by Stronach Group and 20% by the New York Racing Association (NYRA). Velocity Wagering is another defendant. Velocity is a CAW owned by Churchill Downs.
AmTote, the largest betting processor in North America, is additionally named as a defendant. AmTote is essentially a clearinghouse for parimutuel wagering. It handles more than $15 billion in bets annually. AmTote is a Stronach subsidiary.
The lawsuit seeks compensatory and treble damages as allowed under the Racketeer Influenced and Corrupt Organizations (RICO) Act.
Stronach Seeks Dismissal
In a joint statement, Elite Turf Club and AmTote called the horse racing lawsuit naming them as defendants “meritless.”
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 hasn’t yet commented on the litigation.
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