The bettors in Keeneland’s grandstand thought they had 7-1.
They’d spent the better part of the afternoon doing what American horseplayers have done for a century: building tickets, talking themselves into a price, imagining what a $20 win bet might become.
The horses are loaded. The odds board flashed once more. And the 7-1 they chased became 3-1 right as the gates opened, detonated by a torrent of late money from a computer-assisted wagering group that had been watching the race — and every other race running at that moment –in real time. That kind of last-second plunge has become so common at major meets that horseplayers now give it a name, a shrug, and an expletive.
That single, deflating odds flash is the story of modern American horse racing.
Across the country, a handful of high-volume betting teams — commonly called CAWs — now control somewhere between one-third and, in some pools, nearly half of all money bet on U.S. races, up from about 8% two decades ago. These groups use proprietary algorithms, real-time tote data, and significant rebates to fire staggering wagers into pools in the final seconds, capturing value that everyday bettors rarely even see. At some tracks, that money is flowing through Elite Turf Club — a Stronach Group/NYRA venture created specifically to serve this clientele — and through similar high-volume shops tied to Churchill Downs and other major operators.
And now, in 2025, the rest of racing is finally admitting what rank-and-file horseplayers have shouted for years: this is not a level game anymore.
The quietly radical shift in who racing is for
The math arrived before the outrage.
U.S. Thoroughbred wagering fell to about $11.3 billion in 2024, the sport’s third straight annual decline and far off its 2003 peak of more than $15.1 billion. On paper, CAWs helped cushion that fall. Some elite teams are reported to have bet hundreds of millions of dollars annually through a single shop, including one outfit that ran $650 million through Elite Turf Club alone. Track executives point to those numbers and say, with some justification, that without CAWs, the handle chart would look even worse.
But the money is coming from the wrong places.
Here’s the core problem, spelled out in a 2021 paper by the Thoroughbred Idea Foundation and echoed since by multiple industry writers: when one segment of the market can win or break even because it gets 4–12% back in rebates, and the rest of the market is stuck paying a 20–24% blended takeout, the rest of the market leaves.
That is precisely what has been happening.
Retail bettors — the fans who bet $6 to show on Saturdays and $24 pick-4s on Fridays — are the ones who show up on big days, bring friends, and, eventually, become owners. They are the sport’s on-ramp. And they are the ones most likely to be crushed when a CAW batch bet knocks their 5-1 down to 5-2 at the bell. Over time, that isn’t just an annoyance. It’s a trust problem.
“Late odds drops are a customer-experience killer,” one longtime NYRA customer, who asked not to be named to preserve his relationship with the track, said in a phone interview. “You can handicap the horses. You can’t handicap a server farm.” His frustration echoes hundreds of similar complaints that show up in handle reports, player forums, and now in court filings.
How CAWs work (and why they win)
To understand why this feels so lopsided, you have to understand the mechanical edge.
- Data and visibility: CAW shops get real-time or near-real-time access to the tote, allowing them to see where money is, and more importantly, where it isn’t, seconds before the race. Retail players see a lagged, public version of the same board.
- Speed: Their software generates and transmits thousands of combinations in exotic pools across multiple tracks in the blink of an eye.
- Rebates: Because they bet so much, tracks and ADWs give them substantial rebates — often the difference between losing 8% and losing nothing — that most customers will never see. That lowers their effective takeout to single digits, while the rest of us are paying the sticker price.
- Concentration: When CAWs hit a pick 6 or dominate a trifecta pool that may already be 30–47% CAW money, they’re taking a disproportionate share out of a pot that everyday bettors have already “paid for.”
As Scott Daruty, president of Elite Turf Club, has argued, these groups aren’t winning because of a magic button; they’re winning because they are operating at scale inside the rules racetracks wrote. He’s also pointed out that in places like Santa Anita’s win pool, CAWs haven’t even been getting much of a rebate because of host-fee changes — proof, in his view, that tracks have already started to put guardrails up.
That’s true. And not nearly enough.
The backlash arrives
What used to be message-board grumbling is now a public fight.
In October 2025, a class-action suit filed by Hagens Berman on behalf of everyday horseplayers alleged an “unfair transfer of billions of dollars” from regular bettors to racetrack-owned CAW platforms, naming Elite Turf Club and other high-volume conduits. Around the same time, high-profile voices such as Barstool founder Dave Portnoy and prominent owner Mike Repole began using their platforms to question why a sport struggling to keep bettors would give its best prices and best information to 50 people with supercomputers.
Racetracks noticed. NYRA, which helped create Elite, began closing the win pool to CAWs inside two minutes to post and carving out CAW-free wagers like the late pick-5. Del Mar followed this summer, and — like magic — the wild, last-flash odds drops disappeared.
It was the clearest proof yet that this isn’t an immutable law of horse-racing physics. It’s a settings issue.
Why this matters now
Here’s the scary part for anyone who cares about the sport’s future.
- Handle is shrinking: down 3.35% in 2024, down again through July 2025. That’s on top of nearly two decades of slow erosion.
- The foal crop is shrinking: 2024’s estimated 18,000 foals were the smallest since the mid-1960s, which means fewer horses, fewer races, and fewer chances to bet.
- The customer base is aging out: tracks need new money, but they’re hollowing out the on-ramp to get it.
- Sports betting is eating racing’s lunch: in 2024, U.S. legal sports betting produced $13.7 billion in revenue; racing produced less than the handle of the Kentucky Derby festival. Consumers can get fixed odds, rich promos, and transparent pricing elsewhere.
In that environment, building the product around CAWs is like deciding to sell only bottles of Cristal when the neighborhood bar is closing. You might make your nightly number, but you won’t have a neighborhood for long.
And if left unchecked, the CAW era accelerates racing’s drift toward something unrecognizable: a sport in which AI-driven systems bet against each other in pools designed for them, on races timed for them, with takeout calibrated for them — and the public is there only to supply liquidity on big days. That is the slow death version.
The fast version is worse: every day, bettors walk, politicians overseeing racinos and racing commissions see declining public engagement, and support for favorable taxation, purse supplements, or land use dries up. At that point, operators are left running a game for a few dozen accounts. That’s barely a sport. That’s a server.
The case for a movement
This is where “rise up” stops being rhetoric and starts being policy.
- Demand transparency on CAW volume and rebates. Tracks and ADWs should publish — daily, by pool — how much CAW money came in and when. The Jockey Club has shown it’s possible to collect and publish handle data in detail. Extending that to CAW categories would allow bettors to make informed choices.
- Support tracks that create CAW-free pools. NYRA and Del Mar have proved bettors will reward transparency. Other tracks will follow if they see handle growth in protected pools.
- Push horsemen’s groups and regulators to tie purse subsidies to customer-friendly wagering rules. If a track wants help from the state or from alternative gaming, it should show it’s protecting the churn of everyday bettors, not just the volume of a handful of offshore accounts.
- Form alliances across silos. Owners mad about short fields, breeders worried about foal crops, and horseplayers furious about odds flashes all think they have different problems. They don’t. They have one: the sport privileges short-term gains over long-term participation.
- Tell the story out loud. What fueled the 2025 lawsuit and the Portnoy/Repole wave wasn’t insider memos. It was a public, repeated, data-backed explanation of how the game has tilted. That pressure works; we saw it in New York and California.
This isn’t some populist fantasy. It’s precisely how other sports have forced transparency on officiating, salary caps, and draft lotteries. Racing can do it, too.
Counterpoint: What tracks and CAW operators say
Racetracks are not blind to any of this.
Executives at Elite Turf Club and similar operations note, correctly, that high-volume play is keeping purses afloat at a time when the sport is losing race dates and on-track crowds. They argue that CAW customers are simply doing what everyone else could do if they had the capital, tech, and appetite for razor-thin margins: betting efficiently into a pari-mutuel system. And they point out that, in markets like California, CAWs are already paying higher host fees or getting smaller rebates in the win pool than the public assumes.
They also warn that if tracks slam the door on CAWs entirely, money doesn’t just vanish — it goes to sports, global exchanges, or other forms of gaming, leaving racing even more exposed.
Those are valid concerns.
But the rebuttal is simple: every sustainable gambling ecosystem protects the recreational customer first. Nevada sportsbooks don’t give syndicates faster lines than the public. Poker rooms don’t let pros see everyone else’s cards two seconds before the deal. Racing is the one major betting product that has inverted that logic — and it’s seeing the exact churn death that inversion predicts.
Horse racing has always been a strange, fragile coalition — horsemen, bettors, regulators, TV networks, state governments — held together by the shared fiction that anyone can find a winner. CAWs don’t just threaten the money. They threaten that fiction. If the public ever believes the game is solved before they sit down to play, they won’t play.
And if they don’t play, there is no game.
