Kentucky-based DerbyWars illegally runs an interstate betting operation on horse racing events across the nation and does not share profits with the racetracks or race organizers, a group of eight racetrack owners and race organizers say in a federal complaint. They say DerbyWars violates the federal Wire and the Interstate Horseracing Act of 1978 and demand disgorgement of profits.
The owners of Pimlico in Baltimore, Santa Anita Park in Los Angles, and several other horseracing tracks say Kentucky-based DerbyWars is an illegal racket and owes them money.
Among those suing DerbyWars are the Los Angeles Turf Club and Los Angeles Turf Club II, which own Santa Anita racetrack, and the Maryland Jockey Club of Baltimore City and Laurel Racing Association, which hold the Preakness Stakes at Pimlico Park.
DerbyWars.com is a horse racing fantasy site in which customers can pay to enter pools or go head-to-head against others by picking winners of horse racing meets across the country and win or lose money in the process.
DerbyWars keeps a percentage of the money pooled for various competitions, and the racetracks in California’s Central District Court say that amounts to illegal pari-mutuel wagering in violation of federal and state laws.
Federal law only allows licensed off-track betting operations to enter into agreements with licensed race track owners, organizers, and horsemen groups, to transmit racing information across state lines and to accept off-track wagers. In return, the racetracks, organizers, and horsemen groups get a percentage of the money taken in from the races run at their establishments.
DerbyWars, however, isn’t licensed, has no agreements in place with racetracks and horseracing organizations, and violates federal law by essentially brokering wagers and taking a percentage on real-world racing events.
The racetracks and organizations also argue DerbyWars does not qualify as a true fantasy sports business, because contestants bet on real races, horses, and jockeys, instead of creating fantasy teams that compete in fantasy games that never actually occur.
