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Home / CAW / Scooping the Piranhas – Part 2: The Tech, the Money, and the Empty Promises

Scooping the Piranhas – Part 2: The Tech, the Money, and the Empty Promises

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By TheFreePPs Editorial Team – December 15, 2025

Last week we introduced the piranhas: the Computer-Assisted Wagering (CAW) teams that vacuum overlays out of exotic pools before the gates even open. We promised you the guts of how it actually works, who profits, and why the people who run the game keep feeding the sharks instead of draining the tank.

How the Machine Works – Faster Than You Can Blink

A modern CAW operation isn’t some guy in a basement with a spreadsheet. It’s a war room.

  • Proprietary software ingests live tote data from every ADW and track feed (legal, thanks to host-fee agreements).
  • Algorithms run thousands of simulations per second, hunting for pricing dislocations as small as a nickel.
  • When an overlay is detected, the system fires hundreds or thousands of pre-structured tickets in the final 30–90 seconds.
  • Because they bet through rebate shops (Elite Turf Club, etc.), they get 7–13 % of every dollar wagered kicked back—win or lose.

Result? A $1,200 Pick 4 that should pay $1,200 for $2 becomes $420 for $2 because $4 million in algorithmic money landed on the same ticket you found at 15 minutes to post. You just paid for their rebate.

The Money Trail – Follow the Rebates

The rebate is the oxygen. Without it, the volume disappears overnight.

Tracks charge “host fees” of 5–12 % on every bet. Out of that slice, the rebate shop keeps a piece and sends the rest back to the whale. The bigger the handle, the lower the effective host fee, the fatter the rebate. In exotic pools the math is obscene: a CAW betting $1 million on trifectas can pocket $100,000–$130,000 in pure rebate profit even if they lose on the merits.

Don’t take our word for it. At the 2025 University of Arizona Race Track Industry Program symposium, Eric Halstrom (VP of Racing, Horseshoe Indianapolis) admitted the stomach-churning truth: “It hurts my stomach that there are retail players who think this game is cooked.”
Yet when pressed on slashing takeout or killing rebates, the answer was always “it’s complicated.”

The Empty Promises – “We Love Retail” (Terms and Conditions Apply)

The same symposium produced some of the most revealing quotes you’ll ever hear from the people who sign the rebate checks.

  • David O’Rourke, NYRA CEO: “When the win odds were changing halfway around the track, that’s a bad customer experience, so we did something about it.”
    Translation: NYRA now blocks CAW bets in the win pool inside two minutes and plans to extend that to all pools inside one minute. A step forward—but only at NYRA, and only starting in 2026.
  • Scott Daruty, President of Elite Turf Club (the biggest CAW rebate shop): “I really disagree that CAW gets preferential treatment.”
    The room reportedly went quiet. Horseplayer advocate Andy Asaro fired back: “Pari-mutuel wagering is supposed to be equal footing among participants; that’s not the case anymore with CAW.”
  • Halstrom again: Retail is their “North Star,” yet he won’t cut takeout further without every other track agreeing—because otherwise “arbitrage” would eat the margin. In other words, they’re scared the whales will just take their ball to the next track that still pays rebates.

The panel agreed retail bettors are the future. They just can’t agree to do anything that might shrink today’s handle by even 5 %. As one industry veteran muttered off-mic: “They’ll keep the piranhas until the pool is empty, then wonder where all the fish went.”

The Proof Is in the Payouts

Look at any major Pick 5 or rainbow Pick 6 on a Saturday in 2025. The “probables” 15 minutes to post routinely show $8,000–$15,000 for a 50-cent ticket. By the final flash they’re $1,800–$3,200. That’s not public money waking up. That’s the machines.

If and when a whale threatens to walk, handles in certain exotics would could drop 40–60 % literally overnight. The tracks panic, quietly raise host fees a hair (lowering rebates), and beg them to come back. Retail never gets that phone call.

What’s Coming in Part 3

Next: the players, owners, and even a few ex-CAW insiders who’ve gone public with horror stories—and the handful of tracks that are actually experimenting with real solutions (low takeout, human-only pools, transparent late-money reports). Will the politicians and regulators fix this tomorrow? Can they?

Because until someone has the guts to cap rebates or ban track-owned CAW platforms from the exotics, every promise to “put retail first” is just noise.

The piranhas aren’t going anywhere.
But neither are we—yet.

Quotes from coverage of the 2025 University of Arizona RTIP Symposium panel “Computer-Assisted Wagering: Where Do We Go From Here?”
Stay angry. Stay loud. And keep downloading your free PPs while there are still races worth playing.