From the Editor

When Does a Horseplayer Become a Business?

By Jonathan Stettin October 6, 2026 20 min read Save Article

There was a time when identifying the person you were gambling against was relatively simple. He was sitting three seats down from you in the grandstand, standing next to you at the windows, or sitting in another racetrack somewhere watching the same signal. He had his opinion. You had yours. He had his bankroll. You had yours.

One of you was going to be right, both of you could be wrong, and the racetrack was going to take its percentage regardless. That was pari-mutuel wagering. We weren’t playing against the house. We were playing against each other.

Technology changed that. There is nothing inherently wrong with technology changing anything, nor is there anything wrong with somebody being better at gambling than somebody else. I spent a significant portion of my life trying to be exactly that.

I never wanted the guy next to me protected from me because I worked harder, saw something he didn’t, managed my bankroll better or was willing to bet more when I believed I was right. If you beat me because you were better than I was, congratulations. I’ll be back.

We have addressed that distinction before. In First, Learn the Rules of the Game, I wrote that there is a difference between being better at the game and being permitted to play a different game. In The House, the Market, and the Player, we looked at the difference between an earned edge and a structural one. In Elite Turf Club: What the Documents Show, we examined the economics of computer-assisted wagering from documents that gave us a considerably clearer picture of how this part of the business actually operates.

This is not another article about rebates, late odds changes or access to the pools. We have covered those extensively and will keep covering them. This is about something more fundamental that occurred to me while looking at the structure itself.

Who exactly is the player?

That sounds like a simple question. I am no longer convinced it is.

In Elite’s Own Words

The most important document here is not somebody criticizing CAW. It is Elite Turf Club’s own September 5, 2024 letter to the California Horse Racing Board, written by its U.S. entity, Elite Turf Club, LLC, in response to public questions.

One passage deserves considerably more attention than I gave it the first time around. Elite wrote: “While an account with Elite must be held in the name of a single individual, all Elite players have hired support personnel to aid in their wagering activities.” It gave examples: developing betting algorithms and models, building technical infrastructure and handling administrative tasks.

Read that word again. All. Not some players. Not the biggest ones. Every one of the roughly 12 to 20 players Elite said it has at any given time works with a support staff, according to Elite.

The same letter explains the TRA code. Each Elite player is issued one unique code, no player may have more than one, and a player may run multiple sub-accounts that all roll up under it. Elite said the purpose is that all wagers placed by the player “can be traced back to him.” Elite also told California that AmTote’s system can process up to 2,000 bets per second from a single client.

So the code traces the wagers to the name on the account. That is what it was built to do. What it does not tell anyone is who built the model, who operates the software, whose money is in the account or who shares in what comes out of it.

There is nothing necessarily wrong with any of that. I want to make that clear at the outset, because this discussion goes nowhere if every question is converted into an accusation. Hiring a programmer is not illegal. We did that right here at Past the Wire for The Riders Up App. Employing an analyst is not illegal. Having more capital than the next player is not illegal. Using a computer to handicap races is certainly not illegal. Neither is being smarter than I am, although I reserve the right not to like it, and perhaps disagree.

The question is where the line is.

What the Account Paperwork Says

The documents connected to The Elite Turf Club N.V., the Curaçao entity, tell a more complicated story. As we noted in our earlier piece, the U.S. LLC and the Curaçao N.V. are different legal entities and should not be casually lumped together. So let’s be precise about which entity says what.

The N.V.’s Risk Assessment, Customer Due Diligence and Transaction Monitoring Policy states that most account holders are individuals. Then it says this: “However, Elite does allow legal entities to be account holders.” For those accounts, Elite identifies any individual owning 25% or more of the entity and any individual with significant responsibility to control, manage or direct it. Its risk assessment form even asks whether an account holder’s instructions are “channelled through a 3rd party.”

So the U.S. entity told California regulators that an account must be held in the name of a single individual. The Curaçao entity’s compliance policy provides for accounts held by legal entities. Both statements may be accurate for the entity making them. But they are not the same picture, and the betting public has never been told which one describes the money in the pool next to theirs.

Then there is the N.V.’s Account Use Agreement. Section 4 says the account holder will wager for personal and private use only, and that “Wagers placed by a person or entity other than, or unrelated to, the account holder are expressly prohibited.” Section 2 bars sharing the account PIN with “any other unrelated party.”

Unrelated. Which suggests someone related can.

The agreement doesn’t define the word. An employee? A programmer? A partner? An investor? A family member? I don’t know, and nothing in the documents I have reviewed tells me.

What the States Say a Bettor Is

Start with Kentucky, because Kentucky’s language is difficult to ignore. Its advance deposit wagering regulation, 810 KAR 3:040, does not use the word “individual” casually. It defines it as a natural person and specifically excludes any corporation, partnership, limited liability company, trust or estate.

The same regulation separately defines a “person” to include corporations, partnerships, LLCs, trusts, associations, joint ventures “or any other group or combination acting as a unit.” Then, in Section 8(19), it says: “Accounts shall only be accepted in the name of an individual and shall not be transferable. Only individuals who have established accounts with a licensee may wager through a licensee.”

Read those provisions together and there is, at the very least, a question worth asking. Kentucky knew exactly how to describe a business or a group of people acting as a unit. It did so in the same regulation. When it came to who may hold an account and who may wager through it, Kentucky chose the natural person.

Kentucky goes further. Section 8(17) requires an ADW to operate with the tote in a way that does not provide or facilitate a wagering advantage based on access to information and processing of wagers, relative to people wagering at the track or simulcast facilities. And Section 8(5) lists “suspected manipulation through computerized robotic wagering” among the wagering anomalies an ADW must report to regulators within 24 hours.

I am not telling you those provisions make CAW wagering illegal. They don’t say that. I am not telling you a wagering team violates Kentucky law. I haven’t seen anything establishing that. What I am telling you is that Kentucky regulators wrote rules about who can hold an account, who can wager through it and whether computerized wagering threatens confidence in the pools. Those are not inventions of somebody angry because his horse went from 5-1 to 3-1 turning for home. They are regulatory subjects.

Kentucky is not alone. New York’s statute, Racing, Pari-Mutuel Wagering and Breeding Law § 1012, says each account wager “shall be in the name of a natural person and shall not be in the name of any beneficiary, custodian, joint trust, corporation, partnership or other organization or entity.” That is the home state of NYRA, which owns 20% of Elite Turf Club, LLC.

California’s rule, 4 CCR § 2074, says an account “shall only be established in the name of a natural person and is non-transferable.” Minnesota says accounts shall only be established by natural persons. Washington defines a natural person to exclude corporations, partnerships, LLCs, trusts and estates. Maine’s statute goes further still, requiring methods to verify that an applicant is a natural person and not a custodian, beneficiary, joint trust corporation or other organization.

Different states use different language, and their laws should not be treated as interchangeable. But the pattern is difficult to miss. When the rules describe who may hold a wagering account, they keep coming back to an identifiable human being.

Now the fair objection, and I want to raise it before somebody else does. Most of these rules govern ADWs licensed in that state or taking wagers from its residents. Elite told California its U.S. wagering license is overseen by the North Dakota Horse Racing Commission and its international license by gaming regulators in Curaçao. A lawyer for a CAW platform would tell you Kentucky’s account rules may not reach a Curaçao account at all.

Maybe so. Then tell us which rulebook does govern who the player is, and what it says. Velocity is owned by Churchill Downs, a Kentucky company. Does Velocity operate under Kentucky’s ADW rules, and if so, how does a player with a staff fit inside “only individuals who have established accounts” may wager? Those are fair questions, and the betting public has never been given the answers. Churchill Downs likes to argue as a publicly traded company they can’t be transparent in some areas, while claiming we need more transparency at the same time. If you are a bettor in Kentucky, you get to decide if there is enough transparency here.

Somebody Already Thought This Mattered

Then there is Oregon, which matters because of its central role in licensing the account wagering hubs. Oregon’s rule, OAR 462-220-0060, says computer-assisted wagers are permitted only if there is human intervention in the wagering process. It even gives an example of what qualifies: “a natural person making the final decision regarding whether or not a wager formulated by a computer should be submitted.”

Think about that before racing dismisses this as semantics. Somebody already decided the difference between the computer and the human being mattered enough to write it into a rule. Now put that rule next to a system Elite says can take 2,000 bets per second from one client, and a player Elite says works with a staff. Which natural person is making the final decision? The one whose name is on the account, or the one sitting at the keyboard?

Florida shows that racing already knows how to look behind an entity to the people who actually own it. Its pari-mutuel statute, § 550.002, defines an “ultimate equitable owner” as a natural person who directly or indirectly owns or controls 5% or more of a business, whether through nominees, proxies, corporations, partnerships, trusts “or other entities or devices.”

That look-through is applied to the businesses that hold pari-mutuel permits. So consider the three levels. Florida identifies permitholder owners down to 5%, through any device. Elite’s Curaçao entity identifies the owners of an entity account at 25%, plus whoever controls it. The bettors in the pool get no look-through at all. Racing knows how to see through an entity. It has simply chosen to apply that to the people running the pools, not the people betting into them.

The same Florida statute defines pari-mutuel wagering as a system in which the winners divide the pool in proportion to the sums “they have wagered individually.” I won’t overstate that word. It most naturally means each bettor’s own stake. But it describes a game built on the assumption that the person on the ticket is the person whose money is at risk.

And the law has drawn lines around betting other people’s money before. Nebraska’s statute barring messenger services from delivering wagers to the track for a fee, Neb. Rev. Stat. § 2-1221, has been upheld. The courts accepted that a state may prohibit anyone from placing another person’s money into a pari-mutuel pool for a fee. I am not saying any CAW operation does that. I am saying the question of whose money is going into the pool, and who is placing it, is one the law has taken seriously before.

Where Is the Line?

In 2021, in Horseracing’s True Lifeline, I wrote that CAW players are not teams or syndicates per se, and that most U.S. tracks require each CAW player to be a single individual responsible for the wagering. I stand by that as a description of the rule. The rule is still the rule. The question is what can stand behind it.

The industry routinely uses words like team and syndicate when describing sophisticated wagering operations. Those words have become so common that almost nobody stops on them anymore. Perhaps we should. A syndicate is not simply another word for a very good gambler. In ordinary usage it means people organized together for a common commercial purpose. A team, by definition, is more than one person.

Maybe that is entirely permissible under every racing regulation in America. If it is, there should be a relatively easy answer to the next question.

Where are the boundaries?

Can the registered account holder employ ten people? Twenty? Fifty? Can those people participate in handicapping decisions, design the algorithms, determine bet sizing or decide which pools to attack? Can they operate the software and submit the wagers? Can somebody other than the registered account holder make the final decision to send them?

What about the money? Must all wagering capital beneficially belong to the named individual? Can another individual provide it? Can several pool it? Can a corporation supply it? Can investors participate economically? Can profits be divided by contract among people who are not the account holder? Can the person whose name and TRA code are on the account be one participant in a larger economic enterprise?

These are questions, not allegations. There is an important difference.

Perhaps regulators have examined every one of them. Perhaps there are written interpretations, licensing conditions or internal policies that answer them. If so, let’s see them. Horseplayers shouldn’t need a law degree, a subpoena or a public records request to understand who or what they are competing against in a pari-mutuel pool.

Not the Dickey Question

This is also where the question I’m raising differs from the Dickey litigation.

Anyone who has followed our coverage of Dickey et al. v. The Stronach Group et al. knows I have not been cheerleading for either side. In The Right Grievance. The Wrong Lawsuit., I explained why I believe the plaintiffs identified a legitimate problem but built the wrong legal vehicle around it. In The Other Side of the Rail on CAW Litigation, I went through the defenses, because if you are going to examine an issue seriously, you don’t get to pretend the arguments you don’t like don’t exist.

Dickey attacks what the plaintiffs describe as preferential access, rebates, late wagering and representations about the fairness of the pools. The original complaint names the tracks, the tote companies and the CAW platforms. It does not name a single CAW player. It says the identity and make-up of what it calls the Insider Betting Group is kept secret, while known to the defendants. The amended complaint added state consumer-protection claims to the original RICO theory. Whether any of it survives the pending motions to dismiss is for a federal judge to decide.

That is not the question I am asking here. I am asking something that comes before all of it.

Who is legally making the wager?

If one natural person owns an account and uses software he built himself, the answer seems obvious. If he hires a programmer to help, perhaps it still does. Add an analyst, a quant, somebody monitoring pools, somebody maintaining infrastructure and somebody handling administration, and perhaps nothing changes then either.

Keep going. At some point you have an office, employees or contractors, proprietary technology, substantial capital, operating expenses, risk management and a continuing commercial objective of profiting from wagering. You have revenues, expenses and intellectual property. You have people performing specialized jobs toward a common economic goal.

Most people encountering that structure anywhere outside horse racing would call it a business.

Racing calls it a player.

Maybe racing is right. But I want to know why.

Why It Matters in a Pari-Mutuel Pool

The distinction matters because of what pari-mutuel wagering is. A CAW operation is not buying a product from the racetrack at a wholesale price and reselling it somewhere else. Its wagers enter the same pools as mine. Its return comes out of those pools, and so does mine. Whatever the racetrack gains in handle, host fees and liquidity does not change the nature of the transaction between bettors. We are competitors.

That is what separates this from every other business that offers volume discounts. If an airline gives a corporation a better fare because it buys ten thousand tickets a year, that corporation isn’t sitting next to me on the plane taking a piece of my fare when its travel department outperforms mine. Pari-mutuel wagering is different. The money is pooled, and after the deductions it is divided among the winners. The person or entity on the other side matters.

We have already documented the scale. Elite told California its membership hovers between 12 and 20 players. Its Curaçao projections showed roughly $2.659 billion in annual handle and roughly $399.6 million in player rewards. Its account agreement requires a commitment of at least $20 million a year. None of that proves anything improper. It does show how far the modern wagering operation has traveled from the image of an individual bettor making individual decisions.

This is not Pittsburgh Phil with a notebook. It isn’t me walking into the track with a Racing Form, my notes and an opinion. It isn’t even the modern version of me in front of three monitors with better information and a lot more horsepower. It is potentially an organized, capital-intensive wagering operation deploying technology, personnel and enormous sums into the pools, while the identity through which all of it enters the system remains one natural person.

Markets function differently when institutional participants enter them. Financial markets distinguish retail customers, professional traders, broker-dealers, investment advisers, market makers and funds, because the economic reality of what each is doing matters. Different activities carry different responsibilities and different disclosure.

Horse racing appears to have developed institutional wagering without developing an institutional wagering classification. Instead we have “players.” Some bet fifty dollars on Saturday. Some, by Elite’s own description, have staff building models and infrastructure behind a system that can take thousands of bets per second. Legally they may both be natural persons holding wagering accounts. Economically, are they really the same class of market participant?

There is an obvious answer from the CAW side, and it deserves its best hearing. A sophisticated bettor is still a bettor. Hiring people doesn’t transform the legal character of the person who hires them. Wealthy individuals employ investment advisers, accountants, lawyers and family offices without ceasing to be individuals. A professional horseplayer should not lose the right to wager because he built a successful operation around his ability. Elite made a version of this argument itself, telling California that the players who invest the most in handicapping and betting infrastructure will naturally be rewarded more often.

Fair enough. But that answer only takes us so far. The investment adviser is regulated. The broker-dealer is regulated. The fund is identified as a fund. The corporation is identified as a corporation. We don’t settle questions about the economic character of an enterprise by pretending everyone with a Social Security number participates in a market in the same capacity.

Then Answer Them

Horse racing may have good answers to all of this. Then answer them.

Tell the betting public whether a CAW account may represent only the capital and decisions of the named account holder, or the collective economic interests of other people. Tell us who may operate the technology and who may authorize the wagers. Tell us whether employees, contractors, partners or investors can share in wagering profits. Tell us what “related” means in Elite’s account agreement. Tell us how many CAW accounts are held by legal entities rather than individuals. Tell us what the TRA code certifies and what it does not. Tell us whether the tracks approving those codes know the complete economic structure behind the account, or only the name of the person holding it.

Most of all, tell us where an individual ends and an enterprise begins. That is not an unreasonable question from the people whose money is sitting in the same pools.

For years the CAW discussion has revolved around late odds changes, rebates, host fees, technology and access. Those issues remain important, and we will keep writing about them. Dickey may establish something meaningful in court, or it may disappear on motions before anyone reaches discovery. Either way, this question is still standing.

Who are we actually playing against?

I don’t need the names. I know a few. I don’t need anybody’s home address. Don’t care. I don’t care what model somebody uses, what horse he likes tomorrow or how he calculates fair value. A gambler is entitled to his edge. I spent a lifetime protecting mine.

What I want to know is whether the other participant in a pari-mutuel pool is legally and economically an individual horseplayer, or whether an organized wagering business can operate behind an individual account because the rules only look at the name on the front door. Those are not the same thing.

If racing has examined that distinction and concluded the current structure is exactly what the law permits and what regulators intended, there should be no reluctance to explain it. If racing hasn’t examined it, somebody should.

We have spent a lot of time asking whether computer-assisted wagering changed the game.