A major regulatory debate is unfolding after a Kentucky lawmaker proposes a bill targeting CAW, a move that could dramatically reshape the economics and fairness of pari-mutuel horse racing wagering in the United States.
The proposal challenges the growing influence of Computer-Assisted Wagering (CAW) teams—high-volume betting groups that use sophisticated algorithms and technology to dominate wagering pools. Supporters say the bill restores fairness for everyday bettors, while critics warn it could destabilize racing’s financial foundation.
What Prompted the Bill Targeting CAW?
The legislation was introduced by Matt Lehman, who argues that modern pari-mutuel wagering has drifted away from its original promise of equal participation.
Lehman has pointed to real-world betting experiences at Keeneland, where odds visible to the public can change dramatically in the final seconds before post time—often due to massive CAW wagers entering the pools late.
According to Lehman, these practices erode trust and discourage casual fans from betting on horse racing.
Understanding CAW in Horse Racing
CAW teams rely on advanced computing models capable of analyzing thousands of variables in real time. Their advantages often include:
- Ultra-fast betting execution
- Preferential data access
- High-volume wagering rebates
- Ability to place bets milliseconds before pool closure
While legal under current rules, critics argue that these advantages place traditional bettors at a structural disadvantage, making pari-mutuel wagering feel increasingly opaque and unfair.
What the Kentucky Bill Proposes
As a Kentucky lawmaker proposes a bill targeting CAW, the legislation seeks to mandate “equitable wagering terms” for all participants placing the same type of bet.
If passed, the bill would restrict racetracks and wagering platforms from offering exclusive benefits—whether technological, financial, or informational—to select betting entities. In effect, CAW teams would no longer be allowed to operate under preferential conditions unavailable to the general public.
Why Kentucky’s Decision Matters Nationally
Kentucky occupies a central role in American Thoroughbred racing. Policies adopted in the state often influence regulation elsewhere, especially given the global visibility of events like the Kentucky Derby.
Industry analysts believe that if Kentucky enacts restrictions on CAW, other racing states could quickly follow, potentially triggering a nationwide regulatory shift.
Supporters: “This Is About Bettor Confidence”
Supporters of the bill argue that CAW dominance may be contributing to declining fan engagement. While CAW teams generate enormous betting handle, overall participation from casual bettors has not kept pace.
They claim that restoring transparency and fairness could encourage new fans to wager, strengthening racing’s long-term sustainability rather than relying heavily on a small group of professional betting syndicates.
Opposition: Financial Risks for Racing
Opponents caution that CAW money plays a critical role in funding purses, track operations, and state tax revenue. Removing or limiting CAW participation could shrink wagering pools and reduce income for horsemen and racetracks.
Some industry stakeholders also warn that CAW teams could redirect their action to other states or international markets, leaving Kentucky at a competitive disadvantage.
Legal and Regulatory Challenges Ahead
Even if the bill advances, defining “equitable access” will be complex. Regulators must determine how to balance fairness without violating interstate wagering agreements or federal commerce laws.
The bill is expected to face intense scrutiny in committee hearings, with testimony from racing officials, technology providers, professional bettors, and consumer advocates.
The Bigger Picture for Horse Racing
As a Kentucky lawmaker proposes a bill targeting CAW, the industry faces a broader reckoning. The debate reflects a global question confronting many markets: how to regulate algorithm-driven participants without undermining innovation or liquidity.
The outcome in Kentucky could determine whether horse racing prioritizes technological efficiency or consumer trust—or finds a new balance between the two.
