How computer-assisted wagering became horse racing’s insider trading | Elizabeth Banicki

Cash-strapped racetracks are selling out everyday bettors to whales who use algorithms to wager huge sums at friendlier odds. It’s a rigged system designed for the rich to get richer

As the thoroughbred horse racing industry fades in America, I think back on the days when it was my life. I think a lot about what became of the thousands of horses I exercised. When I find myself locked in that headspace, the face of one kind little gelding haunts me. Dodgen Bullets, a Bob Baffert trainee, was no star and never going to be much as it was said, but he was willing and like all racehorses painfully innocent. We were young at the seaside in late summer at Del Mar racetrack, where this year’s Breeders’ Cup will be held over the the weekend. I exercised him into his first race, a Maiden Special Weight for two-year-olds which he won decisively. His connections pocketed over $50,000 in purse money and, aside from the $12 a day I made exercising him, I collected nearly $500 betting on his victory. As he was led back to the barn sweat-drenched, maybe frightened, I was clinking champagne and high on dopamine. These many years later I see how twisted my show of gratitude to him was.

Despite that win I had no interest in gambling, was ignorant of the whole procedure, and fearful of losing the little money I had. Where I didn’t contribute to the handle, many other racetrackers did daily. It is a way for underpaid backside workers to shore up low wages. Over the last decade while poverty on the backside hasn’t much improved, and while horses are still endlessly churned through the industry without any mandated lifelong protection, track operators are exploiting the system to curate a more financially appealing landscape for themselves. Tracks like Del Mar serve up their retail customers, everyday bettors, to computer-assisted wagering (CAW) teams who use the wagering pools those customers create like a parasite does a host, and who work based off big figure deals with the tracks. Industry heavyweights like The Stronach Group, New York Racing Association, and Churchill Downs own the platforms these teams use to gamble on. Scott Daruty, president of Stronach-owned gambling entities Monarch Content Management and Elite Turf Club, said he does not see a conflict because ownership gives track operators “a direct relationship with our biggest customers”, and “an understanding that we wouldn’t have were middlemen conducting this activity”, so it is “the right thing in my opinion”, he told California Horse Racing Board commissioners.