Class-Action Lawsuit Over Computer-Assisted Wagering Targets Stronach Group, CDI, NYRA

A class-action lawsuit filed by Hagens Berman accuses The Stronach Group, Churchill Downs Inc., and the New York Racing Association of colluding to create a rigged horse racing wagering system. The suit claims these entities, along with companies like Elite Turf Club and Velocity, utilize computer-assisted wagering (CAW) to unfairly benefit a small group of insiders. These insiders allegedly enjoy advantages such as rebates, faster execution, and informational access, allowing them to profit from “no-risk” wagering opportunities totaling nearly $4 billion annually, at the expense of average bettors.

The lawsuit argues that the use of AI and algorithmic betting has transformed wagering into an organized scheme that transfers wealth from retail bettors to insiders and racetrack operators. The plaintiffs allege that these advantages allow insiders to employ strategies that would bankrupt ordinary bettors, effectively creating a two-tiered system. The suit cites examples like preferential access to odds and the ability to manipulate prices to the detriment of public bettors.

The legal action brings claims of unjust enrichment, conspiracy, conversion, and violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), drawing parallels to cases against organized crime. Steve Berman of Hagens Berman stated the scheme is a “modern reverse-Robinhood scenario” where insiders are “stealing from average public retail bettors and giving to the already rich.” The firm intends to recover losses for the proposed class of affected bettors.

(Source：Paulick Report)