(WKYT) – The Kentucky Derby draws millions of bettors, from first-timers to seasoned gamblers. But a growing technology called computer-assisted wagering, known as CAW, is raising questions about whether the playing field is still level.
Brad Taylor hosts his own betting show with ESPN Sports Radio and says CAW groups use algorithms and artificial intelligence to process data in seconds, then drop massive bets at the last possible moment, shifting the odds right before post time.
“With these computers and the syndicates out there, the real sharps, the high rollers — these odds will change between the time five minutes before the race until when the horses cross the finish line. It’ll be a big difference because the late money will come in based on the computers,” Taylor said.
Taylor says it doesn’t matter whether bettors are wagering on their phone or in person — AI can still affect their bet.
“It doesn’t matter who these horses are, the names of the horses or who owns them. They’re just looking for numerical value. And when you see horses at certain odds at a certain time before the race, people will put big money,” Taylor said.
Legal and regulatory response
A federal class-action lawsuit filed in New York alleges CAW groups are manipulating betting pools and creating false odds for the average bettor. Keeneland, which operates the same parimutuel wagering system, directed WKYT to its wagering website and declined to comment on the lawsuit.
Kentucky Horse Racing and Gaming, which oversees the state’s racing industry, says it has closely followed the CAW discussion for years and is now working to implement House Bill 904, which requires racetracks to update wagering technology and improve access to betting odds for everyday bettors by April 2027. The agency says it remains committed to ensuring the integrity of parimutuel wagering, including at this year’s Kentucky Derby.
“A lot of times with betting on the horses and betting on anything for that matter… the models, the systems, the AI, the numbers… they know more than we do,” Taylor said.
Taylor says for casual Derby bettors, the race still holds its magic, but warns that AI tools like ChatGPT have limits, especially when horses scratch before post time.
Kentucky is among the states now exploring restrictions on last-second computer-assisted bets, but for this year, Churchill Downs has no cutoff time in place.