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Bettors can endure seemingly unfair practices—like "phantom" tax liabilities and worse-than-expected odds—until public frustration forces a response. Action is typically reactive rather than proactive.
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Recent horse racing at Del Mar saw odds change drastically, which was suspected due to late computer-assisted wagering (CAWs) reducing payouts for early bettors. After some backlash, Del Mar implemented restrictions on late CAW access to stabilize win pool odds—showing reform only came after the problem became blatant.
- Other issues, namely limiting successful sports bettors, received relatively mild regulator scrutiny in the U.S. and U.K.. Operators argue restrictions are commercially necessary, but growing data on how many accounts are affected (e.g. over 600,000 in the U.K.) suggests pressure for at least some change is building—albeit still without a tipping point of “egregiousness."
Lovesick Blues, a seven-year-old gelding that won some good horse races, but never a truly big one, opened as a 20/1 underdog for the $400,000 Bing Crosby Stakes Saturday at the Del Mar Thoroughbred Club in Del Mar, California.
Most bettors weren’t buying it. Just before the historic "Grade 1" race began, the oddsboard showed Lovesick Blues ballooned to a 47/1 longshot.
Then, somehow, the numbers began to shrink.
I was in the (win) pool!
When he was in the starting gate, Lovesick Blues was a 35/1 dog on the board. When the odds were updated mid-race, the on-screen graphic showed Lovesick Blues as an 18/1 shot.
And then Lovesick Blues won the Bing Crosby, closing with lunging, confident strides on the outside that took him from the middle of the pack to nearly two lengths ahead of the field at the wire.
Anyone who bet Lovesick Blues to win his first-ever Grade 1 race did well, but made out as well as they would have if he'd still been a 30/1 or 40/1 shot as he was before the race began. If you bet him even four minutes before the gates opened, your payout was basically halved by the time he crossed the finish line.
💙 #9 LOVESICK BLUES ($39.20) upsets the @BreedersCup Sprint WAYI $400,000 Bing Crosby (G1) at @DelMarRacing, sponsored by @LanesEndFarms stallion The Factor!!
— FanDuel Racing (@FanDuel_Racing) July 27, 2025
This is the first Grade 1 win for trainer Librado Barocio. The 7YO @CTBACalbred gelding was ridden by @franco_geo. pic.twitter.com/vOhrFV6ofa
Now, there were explanations offered, such as sluggish and quirky odds displays. Still, that probably doesn’t undo the whiplash for bettors who thought they had a 40/1 winner, and instead got 18/1. The sweet taste of victory was just a little more bitter than usual.
Lovesick Blues' weakened payout was one of several examples of odds cratering at Del Mar over the weekend. Bettors were understandably annoyed, probably putting it politely.
Then Del Mar did something about it.
DMTC will close CAW players access to win pools at two minutes to post beginning Thursday, July 31.
— Del Mar Racetrack (@DelMarRacing) July 29, 2025
Statement ➡️ https://t.co/Sx6ApNA1ky pic.twitter.com/IjTFBNCO6C
On Tuesday, the Del Mar Thoroughbred Club (DMTC) announced it will block access by so-called computer assisted wagering groups (CAWs) to the track’s win pools at two minutes before races begin, starting Thursday. The move mirrors a similar step the New York Racing Association took a few years ago.
CAWs bet big and fast enough that they can shift the odds on any given race. According to Daily Racing Form, their accounts are responsible for up to 30% of wagering on U.S. thoroughbred races. As a result, CAWs were the chief suspect for the big odds swings at Del Mar, and the track took aim at them in trying to remedy the situation.
“We had taken steps to encourage CAW players to process their win wagers earlier in the cycle, but it has become clear that we need to take additional measures,” said Josh Rubinstein, DMTC president, in a statement. “We will continue to do our best to create a racing and wagering product that appeals to all segments of the horseplayer market.”
Now, Del Mar isn't imposing similar restrictions on CAWs for exotics or other pools where smaller horseplayers live. It’s doing something, though, and time will tell if at least the win odds move more smoothly and rationally.
So, arguably, it’s a good thing Del Mar responded to a pretty irksome situation. However, why did it take something arguably egregious first? And how many people were bothered enough to do irreparable harm to their wagering appetites before the track made a fix?
Egregiousness: the bringer of change
The casino gambler, the sports bettor, and the horseplayer have been and continue to be put in some pretty irksome spots.
Federal lawmakers somehow set them up to be taxed on "phantom' income, computer-powered whales nuke the odds for longshot winners, and operators impose wagering limits on bettors for reasons they don’t necessarily believe or trust, and that remain the subject of relatively heated debate.
The Del Mar example suggests it takes something so obviously problematic before anything gets done. So, too, does the redo the U.S. Congress is attempting with the wagering loss deduction changes packaged into President Donald Trump’s Big Beautiful Bill.
In making those changes, lawmakers (mostly unwittingly, it appears) lowered the amount of betting losses someone can deduct from their income to 90% of their winnings.
If this isn’t undone, that means some gamblers could break even and still have to pay tax on winnings they don’t really have. They would go from breaking even to being net losers.
This is unfair. And, thankfully, everybody seemingly realized the unfairness of it all.
"We think this is going to go away," BetMGM CEO Adam Greenblatt says of the One Big Beautiful Bill's changes to wagering loss deductions. Enough smart people have realized it's probably not the best approach, Greenblatt added during their Q2 business update this morning.
— Geoff Zochodne (@GeoffZochodne) July 29, 2025
BetMGM CEO Adam Greenblatt said during his company’s latest business update Tuesday that they’ve run the numbers and found the 90% cap can result in “outcomes which don’t make sense.”
“So we think the rational outcome will prevail, and we think that this is going to go away,” Greenblatt added.
At Del Mar, when the outcomes stopped making sense, the track had a lever it could pull immediately to try to restore fairness. The U.S. Congress can’t work as quickly. So, while many people apparently realize the wagering loss deduction situation is bad, they can’t just flip a switch to make things right again. Also, the action being taken right now is to basically undo a mistake that was foreseen ahead of its doing.
In the meantime, gamblers are living with the prospect of paying tax on their “phantom” income next year. And it was only after bettors highlighted the egregiousness that we're hearing there’s a problem here people will try to fix.
When it comes to the gambling business, it may be that only the egregious can inspire change. Or, you know, a change back to the way things were. This is also more or less true for a lot of life and politics; you need a good crisis to get things moving.
Push it to the limits
Which brings us to sports bettor limiting. Like the wagering loss deduction, it’s a situation that reportedly affects a small percentage of sports bettors, who are for the most part losers (I'm not trying to be insulting, I'm a loser, too). This could explain why we haven't yet reached the critical mass of egregiousness, but may be inching closer.
The two states that arguably looked most closely and publicly at this are Massachusetts and Wyoming. The work in Massachusetts continues. However, in May, the Wyoming Gaming Commission received a report on online sports wagering limits that said less than 1% of bettors in the state were limited, “and most of those have very reasonable limits placed on them.”
“Most of the reasoning’s for limiting a patron revolve around the patron ‘cheating’ in some manner,” Special Agent Supervisor Michael Steinberg added in his report to the commission. “Given all the data we’ve collected, staff does not see a problem in Wyoming with the limiting of sports wagering.”
Case closed, right?
UK Gambling Commission CEO Andrew Rhodes writes that 4.31% of active customer accounts with online betting companies (or 643,779 accounts) were "restricted in some form" in 2024. The most common form of restriction was limiting how much someone can bet, then account closure. pic.twitter.com/CiX2IEmmKl
— Geoff Zochodne (@GeoffZochodne) July 23, 2025
Then along came Andrew Rhodes, chief executive of the U.K. Gambling Commission. In a blog post last week, Rhodes said the data they'd collected from operators showed that 4.31% of customer accounts were "restricted in some form," which in most cases (62.17% of restricted accounts) meant limiting how much someone could bet.
The UKGC also learned that just 25.42% of active customers were profitable, compared to 46.78% of restricted customers.
Is that egregious enough? Well...
Rhodes noted there's no "universal service obligation" for gambling; you don't have to let everyone play. And being a winning bettor, he wrote, "is not a protected characteristic in discrimination law."
Even so, Rhodes said the regulator needs to understand the role commercial restrictions have in driving customers to offshore gambling sites and in motivating them to use multiple accounts (presumably those of a friend or family member or total stranger who lends it to them). Rhodes also said the UKGC is looking at ways to improve how operators communicate account restrictions to players.
“Whilst we recognise such transparency does not alleviate the frustration of those subject to severe restrictions, if this is a feature of an operator’s business model then it is something that they should inform consumers about,” Rhodes wrote.
The end result, then, could become a double-edged sword. Maybe a requirement for better communication will get operators to loosen up a bit, to let some more winners keep winning somewhere near their current clip. However, better communicating limits to bettors could turn them off betting, if they know what waits for them if they actually win enough. Time will tell, including if the UKGC does anything at all.
“It is not in our remit to mandate how operators handle their commercial liabilities, but we do have a statutory responsibility to ensure that gambling is conducted in a fair and open manner, to understand potential drivers of illegal gambling, and to ensure that industry practices are not having an adverse impact on the effectiveness of regulation,” Rhodes wrote.
So, the level of egregiousness in limiting remains under review in the U.K. and is still being more preliminarily examined in the U.S. Nevertheless, U.K. operators restricting 643,779 accounts is a lot, and potentially a lot of people that were affected.
Threat Level Three P.M.
We don’t know if the North American numbers on average are more Wyoming or Wigan. So, once again, egregiousness remains relatively low.
We have a clubhouse leader for most significant late odds change on a winner at Del Mar. As the field for Saturday's 6th was loading, Nanci Griffith was 19-1. Her final price was 6-1. She rallied wide and won. Folks who hoped for approx. $40 on a $2 win ticket, got $14.80. #drf
— Steve Andersen (@DRFAndersen) July 26, 2025
In the North American context, though, there are other places where limited bettors can take their business, such as to sweepstakes casinos and sportsbooks, as well as federally-regulated prediction markets. Both of those outlets face efforts by lawmakers and regulators to rein them in, but they're still there, alongside offshore operators, to accept limited players. And as long as they are, they're potentially hoovering up the business of the limited.
Is that egregious enough? Not yet, I suppose. And, if the experience with the BBB and Del Mar odds shrinkage are any indication, it will take an obvious crisis to move the needle on sports bettor limiting.
Maybe the crisis never comes. If it does, though, lawmakers, regulators, and even operators should think Churchillian, and not let it go to waste.
