AI Horse Betting Class-Action Lawsuit

On October 24th, 2025, a lawsuit was filed in the United States District Court for the Eastern District of New York against Stronach Group Inc., Stronach Group Services LLC, Churchill Downs Inc., New York Racing Association, Amtote International Inc., United Tote Company, Racing & Gaming Services, and Elite Turf Club LLC.¹ The law firm, Hagens Berman, filed this nationwide class-action lawsuit against the racetrack owners who own “computer-assisted wagering (CAW) horse betting and wagering platforms.”²

The lawsuit accuses the entities of “colluding via computer-assisted, algorithmic betting that has disadvantaged everyday bettors in a rigged system that favors the wealthy.”³ The use of AI and other advanced technology led to a transfer of billions of dollars to a group of inside bettors, the operators of the racetrack, and betting platforms.⁴ The lawsuit states that the inside bettors are enjoying “no-risk, no-loss ‘wagering’ opportunities with respect to amounts now approaching nearly [$4 billion (US)] per year.”⁵

Hagens Berman’s founder, Steve Berman, made a comment about this matter.⁶ He stated, “’Its victim – the average public bettor – has been caught in a modern reverse-Robinhood scenario in which a select few with inside information are stealing from average public retail bettors and giving to the already rich – a small group of bettors and the operators of racetracks and betting platforms – the wealthy and few.’”⁷

The members of the insider betting groups are receiving deals that public players do not have access to.⁸ The lawsuit includes that “these pricing advantages allow insider betting group members to profitably employ strategies that would bankrupt a retail player.”⁹ Claims of conversion, conspiracy, unjust enrichment, and a violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”) are alleged in the lawsuit.¹⁰

This class-action lawsuit was filed a day after the arrest of Chauncey Billups, Terry Rozier, and Damon Jones regarding the NBA scandal of illegal sports betting and rigged poker games.¹¹ Legal experts state the “NBA betting scandal should be a wake-up call for sports, leagues, and gaming entities.”¹²

These recent issues demonstrate that there is a serious challenge to sports integrity right now. For instance, my last post discussed suspicious bets made in college basketball. See https://ublawsportsforum.com/2025/10/25/gambling-syndicate-college-basketball/. Now, the NBA and horse racing have similar issues. See also https://ublawsportsforum.com/2025/10/28/from-courtside-to-courtroom-a-look-inside-the-nbas-betting-scandal/. Sports are supposed to be safe and fair to everyone involved, and it would be disheartening for these issues to continue in other sports.

1. Hagens Berman, Class-Action Lawsuit Unveils Massive AI Horse Betting Manipulation Scheme, Hagens Berman (Oct. 24, 2025) https://www.hbsslaw.com/press/horse-betting-manipulation-class-action/class-action-lawsuit-unveils-massive-ai-horse-betting-manipulation-scheme. See also Hagens Berman, Horse Betting Manipulation Class Action, Hagens Berman https://www.hbsslaw.com/cases/horse-betting-manipulation-class-action (last visited Oct. 29, 2025). ↩︎
2. Hagens Berman, Horse Betting Manipulation Class Action, Hagens Berman https://www.hbsslaw.com/cases/horse-betting-manipulation-class-action (last visited Oct. 29, 2025). ↩︎
3. Id. ↩︎
4. Id. ↩︎
5. Hagens Berman, Class-Action Lawsuit Unveils Massive AI Horse Betting Manipulation Scheme, Hagens Berman (Oct. 24, 2025) https://www.hbsslaw.com/press/horse-betting-manipulation-class-action/class-action-lawsuit-unveils-massive-ai-horse-betting-manipulation-scheme ↩︎
6. Id. ↩︎
7. Id. ↩︎
8. Id. ↩︎
9. Id. ↩︎
10. Id. ↩︎
11. Rae Ann Varona, Bettor Says Rigged AI Horse Betting Scheme Favors Wealthy, Law360 (Oct. 25, 2025) https://www.law360.com/articles/2403808/bettor-says-rigged-ai-horse-betting-scheme-favors-wealthy. See also David Purdum, Chauncey Billups, Terry Rozier arrested in gambling inquiries, ESPN (Oct. 23, 2025) https://www.espn.com/nba/story/_/id/46695228/sources-terry-rozier-arrested-part-gambling-inquiry ↩︎
12. Rae Ann Varona, Bettor Says Rigged AI Horse Betting Scheme Favors Wealthy, Law360 (Oct. 25, 2025) https://www.law360.com/articles/2403808/bettor-says-rigged-ai-horse-betting-scheme-favors-wealthy ↩︎

Featured Image: Hagens Berman, Horse Betting Manipulation Class Action, Hagens Berman, https://www.hbsslaw.com/cases/horse-betting-manipulation-class-action (last visited Oct. 29, 2025).