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Home / News / Racing Symposium: Industry Acknowledges CAW Hurts Retail Players

Racing Symposium: Industry Acknowledges CAW Hurts Retail Players

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Let’s segue back to the topic on how Computer-Assisted Wagering (CAW) is turning the tote board into a battlefield where the little guy (that’s us retail bettors, grinding away on a $2 exacta or a $20 Pick 4) gets steamrolled by algorithmic whales dumping millions in the final seconds. We’ve covered the mechanics, the rebates that fuel it, and how it’s bleeding the soul out of the game—pushing payouts into the dirt and sending folks like Mark Paul to the sports bar instead of the windows. On Tuesday, the University of Arizona Race Track Industry Program symposium brought industry heavyweights to the stage to share what was essentially a collective mea culpa mixed with “we’re trying, but it’s complicated.” Here’s a breakdown of the panel’s key points, centered on the retail plight. It’s affirming in spots (retail first!), but frustratingly incremental—no silver bullets, just baby steps amid the usual finger-pointing.

The panel—moderated by Pat Cummings of the National Thoroughbred Alliance—included voices from tracks, ADWs, and advocates. Cummings kicked it off with a grim framing: Is racing hurtling toward a “cliff” where CAW dominance tips us into irreversible free fall, alienating retail forever? The consensus? We’re teetering, but the panel doubled down on retail as the “growth strategy,” not the rebate-chasing bots. Below, we hit the highlights by speaker, with a focus on how CAWs are gutting the retail experience and what (little) they’re doing about it.

David O’Rourke (CEO, NYRA): “Optics Matter—And Late Steam Looks Like Cheating”

  • O’Rourke was the most action-oriented, admitting CAW’s late-money floods create “bad customer experiences” for retail—like watching win odds flip dramatically mid-race on TV broadcasts. NYRA’s fix? They’re the first track to bar CAWs from the win pool inside two minutes to post, with plans to extend that to all pools at one minute by 2026. (They cap CAW bets at six per second, matching retail limits.) “We produce a lot of TV,” he said, “so when the win odds were changing halfway around the track, that’s a bad customer experience, so we did something about it.”
  • On the retail crunch: He gets why players feel cheated by crushed exotics, but blamed the industry’s 20% blended takeout orbit (win/place at 15-17%, exotics at 22-25%) for making broad cuts tough—source market fees and rebates eat into margins. Still, retail’s the priority: NYRA’s seeing growth via shared-wallet sportsbooks, where horse betting spikes alongside NBA or NFL action.
  • Takeaway for us retail folks: This is a tangible win—less last-second steam means fairer early exotics, like we discussed. But it’s NYRA-only; other tracks might not follow.

Eric Halstrom (VP of Racing, Horseshoe Indianapolis): “Retail Is Our North Star—CAW? Meh.”

  • Halstrom hit the emotional core: “It hurts my stomach that there are retail players who think this game is cooked.” He flat-out said CAW isn’t growth fuel—retail is—and they’re leaning in with low-takeout bets (12% Pick 5, 15% Pick 4 and all-turf Pick 3s) to lure us back. Data point: Their FanDuel handle (retail-heavy) grew 5% year-over-year, vs. just 1-1.5% on Elite Turf Club (CAW central). “I’m proud of the connection we’ve made with our retail players.”
  • The rub: He won’t slash takeout further without industry-wide buy-in, fearing arbitrage (retail cashes big on low-vig bets here, then shops high-takeout elsewhere). Communication’s a fail too—tracks aren’t telling players about these tweaks. No rebate bans on the table; it’s all “let’s build relationships.”
  • Retail angle: This echoes our frustration—CAWs distort pools, but tracks act like isolated islands. Horseshoe’s low exotics are a bright spot for early plays, but without coordination, it’s whack-a-mole.

Scott Daruty (President, Elite Turf Club): “CAWs Don’t Get a Free Ride—But Rebates Stay”

  • As the CAW rep, Daruty pushed back hard: “I really disagree that CAW gets preferential treatment.” He argued high host fees (8-12% to tracks) mean CAWs aren’t the villains— they’re just volume players in a broken system. In a “perfect world,” sure, lower takeout and kill rebates, but reality bites: Uniform cuts are pipe dreams amid competing tracks.
  • No fresh data, but he nodded to retail’s value without specifics. Controversy flared when advocate Andy Asaro (more below) called for rebate elimination; Daruty objected, framing it as unfeasible.
  • For retail: This defensive stance feels tone-deaf—CAWs do have the edge via rebates (as we broke down earlier), and Daruty’s “not perfect world” excuse doesn’t fix our diluted payouts.

Andy Asaro (Horseplayer Advocate): The Retail Warrior’s Rally Cry

  • Asaro nailed the inequality: “Pari mutuel wagering is supposed to be equal footing among participants; that’s not the case anymore with CAW.” His fix? Slash takeout across the board and axe rebates for a true level field. “If you want a level playing field, lower takeout and eliminate rebates. Can you convince retail players that they’re not being cheated?” It sparked pushback, but no panel rebuttals beyond Daruty’s.
  • No hard data, but his point lands: Retail’s exodus (attendance down 30%+ since 2019) stems from feeling rigged. He urged better transparency to rebuild trust.

Overall Vibes: Affirmation Without Revolution

  • Commitment to Retail: Unanimous—O’Rourke and Halstrom were emphatic, with Cummings warning of the “free fall” if we lose the base. CAW’s a handle booster (up to 50% of bets), but not the future.
  • Effects on Retail: Late steam kills excitement (odds flips mid-race), high takeout erodes value, and poor comms leave us in the dark. Example: Delta Downs tried 10% takeout on TwinSpires but bailed due to rebate-margin squeezes.
  • Solutions? Incremental: NYRA’s timing restrictions, low-vig exotics at select tracks, and vague “better experiences.” No rebate caps or HISA-mandated transparency—arbitrage fears and fee structures block big moves.
  • Differing Opinions: Tracks vs. advocates on “preferential treatment”; all agree on the problem, but execution lags.

This symposium feels like 2023 optimism in a 2025 reality—handle’s still down 5-10% industry-wide, and CAW volume’s ballooned post-Bet365 deals. For retail players like us, it’s validating (you’re not crazy; the game’s tilted), but the fixes are too slow. NYRA’s one-minute rule could be a model—imagine if every track adopted it, giving us that 5-10 minute window we talked about for early exotics without the crush.

Part 1: Scoop the piranhas before they eat the pool dry.

If interested, you can watch the segment on CAWs at the 2023 University of Arizona Horse Racing Symposium “Computer-Assisted Wagering – The Good, The Bad, and The Future“