NYRA, Churchill Downs Seek Dismissal Of CAW Lawsuit

Churchill Downs and the New York Racing Association are among several major horse racing companies asking a federal court to throw out a lawsuit claiming that computer-assisted wagering (CAW) operations receive unfair advantages in pari-mutuel betting pools.

The proposed class action was filed last year by horseplayer Ryan Dickey on behalf of a group of bettors. It accuses Churchill Downs, NYRA, The Stronach Group, and several wagering technology companies of violating federal and state law through their business relationships with CAW platforms.

Vertical Integration At The Centre Of The Claim

The complaint alleges the defendants built vertically integrated control over the entire betting infrastructure. It states that The Stronach Group owns racetracks including Santa Anita and Gulfstream, operates the AmTote totalizator system processing more than $15 billion in wagers annually, runs advance deposit wagering platforms Xpressbet and 1/ST Bet, and holds an 80% stake in Elite Turf Club, a prominent CAW operator.

Churchill Downs, the complaint says, owns racetracks including Churchill Downs itself, Turfway Park and Colonial Downs, plus the United Tote totalizator system, the TwinSpires advance deposit wagering platform and the Velocity CAW platform. 

NYRA operates Aqueduct, Belmont Park and Saratoga, owns NYRA Bets, and holds stakes in both Elite Turf Club and United Tote. Dickey's complaint argues this structure gave the defendants "complete power to rig" the pools.

Defendants Dispute Standing And Financial Harm

The defendants filed motions to dismiss in June, made public on the court's electronic docket in September. Their core argument is that the plaintiffs have not shown a direct financial injury from the alleged conduct, and therefore lack standing to bring the case.

The motions also challenge the lawsuit's claims under the federal Racketeer Influenced and Corrupt Organizations Act, arguing the bettors cannot establish a sufficiently direct link between the alleged scheme and their specific losses. 

One filing states the plaintiffs "do not even identify a single wager that they made where CAW was even implicated," despite presumably knowing when they placed bets and when they believed they should have won more. Claims brought under the laws of seven states and various common-law theories are also being contested.

Dickey's side has pushed back forcefully, arguing NYRA and the other defendants were "active participants in a RICO enterprise" that diverted money from ordinary bettors to CAW partners through coordinated conduct across the wagering pools they controlled.

October Hearing

The case is being heard in the US District Court for the Eastern District of New York, with the court set to hear arguments on the motions to dismiss on October 9. No ruling has been made on the underlying allegations, and the outcome of that hearing will determine whether the case proceeds to discovery or ends before reaching the merits.

Earlier filings show the defendants also sought to pause any discovery until the motions to dismiss are resolved, arguing the case's scope, spanning horseracing operations, sportsbooks, both CAW and non-CAW wagering, and regulators across all fifty states, would make document production immensely burdensome while trade secrets and proprietary wagering data remain at risk. 

Dickey's side has countered that the plaintiffs' claims can only be substantiated through access to the defendants' own betting-pool records, making that discovery necessary rather than premature.