I told you how the plaintiffs in Dickey et al. got it wrong. Now here is how the defense wins — and why the two most important words in this entire case are “prove damages.”
I am no lawyer. I do not have a GED. What I have is a racetrack education and enough time on the streets of this game to understand how it actually works — and those two things, in my experience, can do what Harvard never could. I wrote an article detailing my opinion of how the plaintiffs in Dickey et al. v. The Stronach Group et al. framed the CAW litigation entirely wrong. Within that piece I provided what I’ll call a blueprint — how they should have attacked this case if they wanted to win it. I stand by every word of it.
Now I think it is proper, and only fair, to detail the defenses available to the CAW side. There are several. Some are extremely legitimate and will prove genuinely difficult for the plaintiffs to overcome. I do not expect this to be popular among bettors. Many of you want these defendants to lose, and I understand that impulse completely. The grievance is real. I have said so repeatedly and I will say so again here. But what I will not do is pretend the defense does not have a strong hand, because it does, and you deserve to know that before this case gets further along.
We do not sugarcoat at Past The Wire. We do not play favorites. The same standard that led me to tell the plaintiffs they were swinging the wrong weapon applies here. If I dropped a piano negligently off a building and it landed five feet away and missed you, you cannot walk into court and argue it would have killed you if it had hit. You have to prove what actually happened to you. That is not a technicality. That is the foundation of how damages work in American law, and it is the single most difficult mountain the plaintiffs in this case will be asked to climb. Let us go through all of it.
The grievance is real. But the defense has a strong hand, and you deserve to know that. JS
What the Plaintiffs Got Right — and Why It Does Not Matter in This Court
Before we get to the defenses, let me be precise about one thing. The plaintiffs correctly identified a structural inequity. CAW players receive rebates that reduce their effective takeout to roughly seven percent while retail bettors pay twenty to twenty-five. CAW operations have direct tote access, superior latency, and capital scale no recreational bettor can match. Late money moves odds in the final seconds before post and retail bettors who committed earlier absorb that movement with no recourse. These are real. They are documented. Elite Turf Club acknowledged in a letter to California regulators that CAW participation increases effective takeout for retail bettors. The plaintiffs had the right grievance.
What they did not have was the right legal theory. They filed RICO — the Racketeer Influenced and Corrupt Organizations Act, the statute designed to prosecute organized crime — against a licensed, regulated industry for conduct that state racing commissions have explicitly reviewed and approved. They layered ten state consumer protection claims on top of a federal racketeering theory. They framed a business dispute as a criminal conspiracy. And in doing so, they handed the defense a road map to dismissal that four separate law firms — Wilson Sonsini, Greenberg Traurig, Rivkin Radler, and Gibson Dunn — filed in coordinated pre-motion letters on April 3rd, all saying the same thing: this case was dead at birth, and the First Amended Complaint made it worse.
Here is how the defense wins it, argument by argument.
The Defense Arguments — Laid Out Plainly
DEFENSE ONE: Prove the Damages. Go Ahead. We Will Wait.
This is the piano. This is the most important defense in the case and I want to spend time on it because it is also the most misunderstood.
Approximately ninety-five percent of retail bettors lose consistently. They have been losing consistently since long before a single CAW player ever entered a pari-mutuel pool. They lose because they are betting into a pool that extracts twenty to twenty-five percent of every dollar before a winner is paid. That is not CAW. That is the structure of the game. The house take has been there since the beginning. The horse that your plaintiff bet in the third race at Gulfstream on a Tuesday in March 2024 finished fifth regardless of whether Elite Turf Club had a dollar in that pool or a million. Your plaintiff lost. He was going to lose. The question the defense will ask — the question that has no clean answer — is this: how much of what he lost was caused by CAW, and how much was caused by the same structural reality that has been draining retail bettors since the tote board was invented?
To recover damages in a fraud or RICO case, you must prove what you actually lost as a result of the specific wrongful conduct alleged. Not what you lost in general. Not what you might have won in a hypothetical world. What you actually lost because of this. Ryan Dickey bet approximately one hundred dollars a week for fifteen to twenty years. That is not a profitable wagering operation disrupted by an external actor. That is a recreational bettor experiencing the mathematically expected outcome of recreational betting at a twenty percent takeout. The piano missed him. He cannot prove it would have killed him. And the defense will say so, loudly, at every stage of this litigation.
The piano missed him. He cannot prove it would have killed him. JS
DEFENSE TWO: The Regulated Market Shield — You Are Calling Legal Conduct a Crime
The entire apparatus of this industry operates under explicit governmental authorization. State racing commissions license the tracks, the ADWs, the tote companies, and the CAW platforms. The Interstate Horseracing Act governs the federal framework for simulcasting and signal fees. Rebate structures are disclosed to and reviewed by regulatory bodies. The specific arrangements that the plaintiffs call a criminal enterprise have been operating in plain sight, under regulatory supervision, for decades.
The defense argument here is not merely “we followed the rules.” It is structurally more powerful than that. Conduct that is affirmatively licensed, disclosed to regulators, and operating within a framework those regulators have reviewed and approved cannot simultaneously constitute a pattern of racketeering activity under federal law. To win, the plaintiffs would have to prove the defendants lied to the racing commissions — that they obtained regulatory approval through fraud. The complaint does not allege that. It cannot allege that, because the evidence runs in exactly the opposite direction. Elite’s voluntary letter to California regulators explaining in detail how its rebate structure affects retail pool participants is documentary proof of disclosure, not concealment. You do not write letters to regulators explaining your business model when you are trying to hide your business model.
DEFENSE THREE: Same Game, Different Skill Level — Performance Advantage Is Not a Crime
The complaint itself is the defense’s best exhibit on this point. Read it carefully and what you find is a detailed description of a better-capitalized, better-modeled, faster-executing competitor operating in the same legal market under the same rules. The plaintiffs call that a criminal conspiracy. The defense calls it competition.
Consider the analogy the defense will use — because it is the right one. Nobody has ever successfully sued a poker room because a professional player sat down at their table. Nobody has successfully brought a RICO case against a blackjack pro for counting cards. The courts have consistently held, in the high-frequency trading context and elsewhere, that speed, capital, and technological advantage in a legal market do not constitute fraud against slower or less-capitalized participants, even when the structural inequity is stark, documented, and genuinely unfair. Unfair and illegal are not the same word. They have never been the same word. The defense will write that sentence on a whiteboard and leave it there for the duration of the trial. At least I would.
DEFENSE FOUR: The Pari-Mutuel Structure — Nobody Is Betting Against You
This defense is underused and conceptually powerful. In a pari-mutuel pool, the track does not bet against the customer. The house takes its cut and steps aside. Every dollar in that pool after that belongs to the bettors. Every payout comes from other bettors. The defendants in this case are not counterparties — they are pool administrators. The RICO conspiracy theory requires that the defendants were engineering outcomes to benefit CAW players at the expense of the class. But in a pari-mutuel pool, the track’s financial interest is in handle volume, full stop. A track running a twenty percent takeout makes the same money whether an Elite Turf Club CAW player wins the Pick 6 or a retired teacher from Boca Raton wins it. The conspiracy theory the plaintiffs have built is actually contrary to the tracks’ own economic interests as pool administrators. They want big pools and maximum handle. They do not care who cashes the ticket.
DEFENSE FIVE: Assumption of Risk — You Knew the Board Moved
Every bettor who has ever stood at a tote board knows one thing with absolute certainty: the odds are not final until the gate opens. Sometimes due to technology lags after the gate opens in the world of ADW’s and simulcasting. That is not hidden fine print in a terms of service agreement. It is the fundamental and visible mechanic of every single bet placed on every single race. The tote board moves. It has always moved. It moves because other bettors are adding money to the pool, and those bettors include professionals with more capital and better information than you. That has been true since before computers existed.
The defense will argue — correctly — that any bettor who has placed a wager on a horse race has assumed the risk of competing in a pool with other participants of varying sophistication, capital, and technology. The complaint essentially argues that the tote board should not move in ways the plaintiffs do not like. That is not a cognizable legal injury. It is a preference. Courts are not in the business of protecting bettors from the outcomes of markets they voluntarily entered with full knowledge of how those markets function. Also ignored by the plaintiffs but not the defense, sometimes the odds go up. Who is tracking that? My money would be on the defense.
DEFENSE SIX: No Fiduciary Duty — The Track Is Not Your Financial Advisor
Fraud requires a duty to disclose. The defense will establish — and it will not be difficult — that a racetrack, ADW, or tote company owes no fiduciary duty to a bettor that would require disclosure of how other bettors are compensated. Your contract with the track is narrow and specific: you bet, they hold the pool, they calculate the result, they pay the winner at the correct odds minus the posted takeout. That is the entire obligation.
I am not saying I agree with that but it is what it is. JS
The existence of favorable rebate arrangements for high-volume customers is no different in legal structure from a hotel offering negotiated rates to a corporate account while charging rack rate to walk-in guests. The walk-in guest is not defrauded. He is paying the posted price for the posted product. The track’s obligation runs to the integrity of the pool mathematics, not to the competitive equality of participants. It does not guarantee that every bettor has equal information, equal capital, or equal technology. Establishing that standard would effectively make professional wagering of any kind a tortious activity. No court is going there.
DEFENSE SEVEN: The Fragmentation Problem — There Is No Common Injury
For a class action to be certified under Rule 23, common questions must predominate over individual ones. The proposed class in Dickey et al. spans multiple states, multiple tracks, multiple ADWs, multiple bet types, and multiple time periods. What Ryan Dickey experienced betting one hundred dollars a week through TwinSpires in Kentucky is legally distinct from what Joseph Paladino experienced betting seventeen hundred dollars a week through TwinSpires in Illinois. Different state consumer protection laws apply. Different regulatory frameworks govern. Different tracks were involved on different days with different CAW participation levels.
Every single damages question in this case is individual. Which races? Which pools? Which CAW operators were present, and in what volume, on that specific day? What would the odds have been without them? What would that specific plaintiff have bet, and what would they have won? These questions cannot be answered on a classwide basis without individual inquiry into every transaction by every class member. That is the Comcast v. Behrend problem, and it is potentially fatal to class certification before the case ever reaches the merits.
DEFENSE EIGHT: The Efficient Market — CAW Liquidity Benefits Everyone
This one plays better in public than in court, but it belongs in the record. Without CAW participation, exotic pools at most tracks would be dramatically thinner. A Pick 6 pool at a mid-major oval on a Wednesday card without institutional money might be three hundred thousand dollars. With it, that same pool might be two million. A single five-hundred-dollar ticket from a recreational player moves a thin pool measurably and harms his own odds. In a deep pool, that same ticket is a rounding error and his odds are stable. The liquidity CAW players provide has a genuine stabilizing effect on pool pricing for every participant.
The defense will not lead with this argument because it invites the obvious response — yes, you stabilized the pool and then extracted the margin that made it worth stabilizing at a preferential rate. But it is a legitimate secondary argument against the damages theory, and it connects to a broader point: the pari-mutuel ecosystem with CAW participation, whatever its inequities, has produced larger pools and more competitive odds for exotic wagers than a retail-only market would generate. You cannot simultaneously argue that CAW destroys the market and that the market would have been better without them. The data does not support it.
The One Angle That Survives All of This
I said we do not sugarcoat. So here is the honest version. There is one thread in the plaintiffs’ case that none of these defenses cleanly severs, and the defense knows it too. It is the effective takeout disclosure argument. Elite’s own letter to California regulators acknowledged in writing that CAW participation increases the effective takeout experienced by retail bettors. If a plaintiff can construct a narrowly targeted claim arguing that the posted takeout rate is materially misleading because the actual cost of participation for a retail bettor is demonstrably higher — and document that delta with the industry’s own admissions — there is a disclosure-based theory that at least survives the motion to dismiss.
It is not RICO. It is probably not fraud in the criminal sense. It is a regulatory and consumer protection argument that belongs in state court or before a racing commission, not in a federal racketeering case. And its absence from the complaint in any developed form is the clearest evidence that plaintiffs’ counsel chose the dramatic theory over the viable one. That choice is why this case is going to end the way it is going to end.
If This Ever Reaches a Jury — And That Is a Very Big If
Here is where I want to close, and I want to be direct about it. Everything above — the regulatory shield, the damages problem, the class certification hurdles, the no-fiduciary-duty argument — all of it assumes the case is decided on the law by a judge applying legal standards. That is the most likely outcome. These cases do not typically reach juries, and this one has several legitimate paths to dismissal before discovery even begins.
But if it ever gets to a jury? The calculus changes in ways that no defense brief fully accounts for. This is a gambling case. I do not care how carefully you select jurors, how many voir dire questions you ask, or how neutrally the judge instructs the panel. There is going to be stigma in that jury room. There is going to be a juror — probably more than one — who does not think gambling losses deserve sympathy, and a different juror who thinks a billion-dollar corporation taking money from working people is wrong regardless of whether it is technically legal. Both of those emotional responses exist in American society, and both of them are sitting in that box.
They say a bench trial — a judge alone, no jury — is almost never a good idea for a defendant. In this case, I am not so sure. A federal judge in the Eastern District of New York who has read four pre-motion letters from four elite law firms, who understands RICO elements and class certification standards, who can separate a legitimate grievance from a viable legal theory — that judge may be the defense’s best friend in a scenario where the case somehow survives the early motions. The law and the facts favor the defense. The emotions in a jury room, in a gambling case, in 2026, with a story that frames billionaires against small bettors? That is a different kind of race, and the late money does not always know the result.
The law and the facts favor the defense. The emotions in a jury room are a different kind of race entirely. JS
Final Thoughts
I told you this would not be popular. I am telling you anyway, because that is what this publication has always done. The plaintiffs had the right grievance and the wrong lawsuit. The defense has the stronger legal hand. Those two things are both true simultaneously and they are not in conflict. The dismissal of this case, when it comes, will not prove that the structural inequities in pari-mutuel wagering are imaginary. It will prove that RICO was the wrong instrument for a real problem and that a legal theory chosen for its drama rather than its viability cannot survive contact with the law.
I have no GED. I have a racetrack and a street corner and many years of watching this game from the inside. If I had taken this to a courtroom myself, gone pro se, gotten past the motions to dismiss — which is its own long shot — the late money would have come in and the fair odds on me would have been four to five. That is not a bad number. It means something. It means the case was not impossible. It means there was a real argument available. It just was not the argument that got filed.
The wall has cracks. They are just in different places than the plaintiffs looked.
You get it or you don’t
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