A firsthand experience of being right about a longshot horse at Keeneland only to see a less-than-expected payout because bets from computer-assisted wagering teams poured in on that horse during the race spurred a Kentucky lawmaker to take action.

State representative Matt Lehman, a Newport Democrat, has filed a bill for the current session that aims to ensure a level playing field between CAW players and “retail” bettors. Through regulation by the Kentucky Horse Racing and Gaming Corporation, House Bill 39 would aim to make pari-mutuel pools available to all patrons on equitable terms, with no advantages given to a particular patron or class of patron.

“I was at Keeneland a couple of times this fall. I bet a horse at 21-1 going in the gate. The horse actually won, but he was 8-1 when he crossed the wire,” Lehman said. “I have had a couple of bets like that. I’m not a big gambler, but I go to the races a few times a year. As a patron, to have a 21-1 shot that pays 8-1, it makes you feel like you lost.”

Lehman’s bill would add new language to Kentucky’s regulatory laws on pari-mutuel wagering that would aim to level the playing field. It reads: “Access to pari-mutuel pools shall be made available to all patrons on equitable terms, and no patron or class of patrons shall be afforded preferential pricing, rebates, access, information, technology, latency, or other advantages not uniformly available to all patrons placing wagers of the same type into the same pari-mutuel pool.”

Through a model that includes high rebates on their wagering, as well as sophisticated programs to estimate odds in racing’s various pools, as well as the ability to then make thousands of wagers in an instant to capitalize on perceived value, CAW teams have enjoyed great success over the past couple of decades. Nationally, CAW teams account for billions of dollars wagered each year in Thoroughbred racing’s pari-mutuel pools that totaled nearly $11.03 billion in 2025.

House Bill 39 is in the beginning stages of a long process, beginning with the Committee on Committees. Lehman notes that currently the bill includes big-picture wording that could see added detail should it gain traction in committee. He noted that he enjoys horse racing and the racing industry and wants it to continue to be a success story for Kentucky. He thinks CAW, as it currently operates, is hurting those long-term prospects.

“I do think the industry’s got to figure out a way to grow its gambling base if it’s going to survive long-term,” Lehman said. “My worry is the way it’s set up right now, we’re going to have a whole bunch of $2 weekend bettors and then a handful of people way at the top. You want to have some of those $2 bettors become bigger and bigger bettors, but the CAW is crowding the pools and the middle is getting squeezed out of it. That doesn’t seem like a long-term solution.

“The importance of this industry to the state is not just the horsemen; it is the entire state. It’s what people know, and it’s really important that we have a very healthy long-term fan base. Maybe this is one way to start encouraging that. That’s really what’s behind it.”

After his betting experience at Keeneland, Lehman talked with people and researched the issue. He believes there’s a fairness issue and that, long term, CAW play is driving away many bettors from pari-mutuel wagering. Some available numbers back up that opinion. Despite the billions of dollars being wagered by CAW teams, the total pari-mutuel handle on United States races in 2025 roughly matches that of 2019 and is down 24% from the more than $14.5 billion wagered in 2005.

“Basically, we’ve got the little guys paying twice as much to gamble on horses as the big guys,” Lehman said. “I’m just trying to write legislation that’s fair, in line with what the intention of pari-mutuel wagering has always been; what it’s supposed to be.”

While they wished to remain off the record, two sources with knowledge of Kentucky racing said to expect some industry-driven changes on CAW in the weeks or months ahead. It will aim to address some of these issues.

Of course, if CAW teams were not allowed to wager on Kentucky races, that would bring an immediate negative impact for tracks and purses. Lehman is aware that if his bill moves forward, it will be important to get the details just right. He wants his legislation to be fully crafted in a way to work for Kentucky racing. At the least, he hopes his proposal begins a conversation on CAW and racing’s long-term business model. 

“The industry’s got to figure out a way to grow its gambling base if it’s going to survive longer term,” Lehman said. “Maybe this is one way to start kind of encouraging that.”