Class-Action Lawsuit Alleges Horse Racing is Rigged to Favor a Few

A class-action lawsuit recently filed in New York’s Eastern District Court has brought forth allegations of the rigging of horse racing events to favor a select few individuals within the industry. This lawsuit accuses prominent players within the horse racing industry of colluding to manipulate betting outcomes using computer-assisted wagering (CAW) schemes.

The lawsuit, spearheaded by Hagens Berman, a widely recognized legal firm specializing in class-action suits, was filed on behalf of lead plaintiff Ryan Dickey and others in similar positions. Dickey, a resident of Colorado with over two decades of experience betting on thoroughbred racing, primarily engaged in wagering activities through TwinSpires, an advanced deposit wagering (ADW) platform owned by Churchill Downs, Inc., during his time in Kentucky.

According to Dickey’s legal team, the defendants have purportedly engaged in deceptive practices to exploit what they term as “ordinary bettors,” such as their client, through “Insider Betting Groups.” These groups allegedly comprise affluent bettors who profit from leveraging algorithms, artificial intelligence (AI), and insider information to funnel substantial sums of money to a select group of inside bettors, as well as operators of racetracks and betting platforms.

The lawsuit describes CAW as “high-volume parimutuel betting conducted by professional teams utilizing models, direct tote connections, and automation to place thousands of highly targeted bets, often just seconds before betting pools close.” The litigation claims that these CAW schemes closely monitor real-time pricing and data, enabling AI systems to calculate fair odds in real-time and seize opportunities when they arise. Moreover, the high-volume betting facilitators allegedly receive reduced fees from racetracks and ADW operators, as well as preferential access for swift bet placements.

The defendants identified in this lawsuit include Elite Turf Club, an 80% owned CAW by Stronach Group, and 20% owned by the New York Racing Association (NYRA), as well as Velocity Wagering, a CAW platform owned by Churchill Downs. Additionally, AmTote, the principal parimutuel betting processor in North America, is also named as a defendant. AmTote, handling over $15 billion in wagers annually, operates as a Stronach subsidiary.

The lawsuit aims to seek compensatory and treble damages pursuant to the Racketeer Influenced and Corrupt Organizations (RICO) Act. In response to the allegations, Elite Turf Club and AmTote have rebuffed the claims, calling them baseless and asserting that CAW is a well-established and regulated component of the parimutuel wagering system.

As the legal battle unfolds, Churchill Downs refrains from issuing any comments on the matter, indicating a potentially protracted legal dispute as the plaintiffs and defendants navigate the intricacies of these allegations and seek to establish the veracity of the claims presented in the lawsuit.