If you are hearing more talk about computerized robotic wagering programs lately, it’s probably because a lot more people have begun to talk about what to do about computerized robotic programs. The programs, which have existed for decades and probably account for approximately one-third of the current national handle on U.S. horse races, were once again a topic of discussion at a major industry conference, this time as the last panel of the Racing and Gaming Conference, which closed on Wednesday after a two-day run in Saratoga Springs. Just 13 days ago, the impact of CRW, also known as computerized account wagering (CAW), was also a featured presentation at The Jockey Club Round Table, an annual event held in Saratoga. All the recent talk probably indicates that the impact of the programs has reached an inflection point, in which the dominance of the programs has created the need for a reckoning. While none of the participants in the Wednesday panel – which shared participants with the Round Table panel – advocated for outright restrictions or bans on the practice, there was certainly a sense that something had gone wrong and needed addressing. “I’m pretty sure everyone here agrees that we have a great product, that pari-mutuel betting is a great product,” said David O’Rourke, the chief executive officer of NYRA, which is one of the few racing companies to place restrictions on CRW wagering in several of its pools. “But we also think this product is being diluted. So now we are asking ourselves, How do we bring it back into line?” :: Bet the races with a $250 First Deposit Match + $10 Free Bet and FREE Formulator PPs! Join DRF Bets. The problem lies in the CRWs win rates, according to the panelists. By leveraging gaudy rebates with sophisticated algorithms and unique access to pari-mutuel pool data, the CRWs are systematically winning, and they are winning from what racing officials are now calling “retail customers” – those players who don’t enjoy the same advantages, whether they are serious players or casual weekend bettors. “If you’re a player and you come to this game and you’re not getting rebates and you’re playing into a trifecta pool with a 30 percent takeout or a 24 percent takeout, you can’t win,” said Marshall Gramm, a professor of economics at Rhodes College who employs a computer program to make bets and who also gets rebates on his play. “Why would we expect there to be any serious players left?” Patrick Cummings, the executive director of the Thoroughbred Idea Foundation, a think-tank for racing funded by several well-heeled owners and breeders, said that his analysis of wagering trends over the past two decades has shown that “mainstream” players have “dwindled quite substantially” as the share of CRW handle has exploded from an estimated eight percent in 2003 to one-third today. That one-third share is coming from approximately 15 CRW groups, Cummings said. So without CRW restrictions available as an option, what is the industry considering? According to O’Rourke and Cummings, the industry should be looking at the creation of off-the-shelf tools that could give players a better chance at competing against the CRWs. Those could include applications that simulate the CRW’s own analyses, the broadcast of real-time imputed final odds, and artificial-intelligence tools. “With the democratization of AI, does that allow us to develop some tools that would provide some balance to the other side?” O’Rourke said. Cummings said that the industry must prioritize efforts to re-balance the pools or risk seeing both retail players and the CRWs move on to other betting products. “This is the head that it’s come to in 2023,” Cumming said. “What do we do now to manage the evolution of the computer player against the long-term degradation of the non-computer player, which is everyone else. How do we enliven their participation?” HISA critics get time On an earlier panel on Wednesday, critics of the Horseracing Integrity and Safety Authority were given an hour to air their grievances of the fledgling effort to nationalize and unify the sport’s regulations, a process that began in July of last year with the implementation of safety rules and that expanded this May with the start of HISA’s Anti-Doping and Medication Control Program. Brett Bonin, the assistant attorney general for the Louisiana Department of Justice, stridently defended his office’s lawsuit seeking to invalidate HISA, which resulted in a ruling that stayed HISA’s jurisdiction in Louisiana and West Virginia. Bonin said that the implementation of HISA would have been “absolutely devastating” to the racing industry in Louisiana, citing the costs of funding HISA’s regulatory programs, and he invited other states and their racing commissions to join the lawsuit against HISA. “Our attorney general is fighting for the life of horse racing in Louisiana and in the country,” Bonin said. Pete Sacopulos, an Indiana lawyer who has built a practice on representing racing licensees in front of racing commissions, said that HISA’s current adjudication protocols had “priced-out due process” by accelerating the application of penalties for drug violations and making licensees responsible for a portion of the adjudication costs on appeal. “Let me tell you, I receive calls every week from horsemen now, where I have to sadly say, I’m not going to be able to help you. And that is because HISA, quite simply, has priced due-process out of the game,” Sacopulos said. “The experience so far has been, sadly, that these people do not have the access to funds to mount a defense.” Julie Brown, a commissioner of the Florida Gaming Control Board, was also critical of the costs of HISA’s programs. Those costs are being borne now by Florida’s taxpayers, after the industry successfully lobbied for a bill that gave Florida’s two tracks, Gulfstream Park and Tampa Bay Downs, a tax credit for their dues to HISA. As a result of Florida’s tracks agreeing to pay the costs – an agreement that was struck prior to the legislation being passed – HISA’s regulations are in full force in Florida, despite the board’s disapproval of HISA’s tactics, Moore said. For now, the board is cooperating with HISA and enforcing its rules. “We wanted to have a place at the table, we wanted transparency, and we wanted accountability,” Brown said. :: Want to learn more about handicapping and wagering? Check out DRF's Handicapping 101 and Wagering 101 pages.