Written by: John Rutecki
Who is Anthony Mattera, and Why Did He Sue Churchill Downs and
Bob Baffert?
This past week, while the 2024 Kentucky Derby grabbed headlines, a legal battle over the 2021 race played out in the background. In 2021, Anthony Mattera had placed a “pari-mutuel” wager on the Kentucky Derby. Unlike typical wagers, pari-mutuel bets are placed directly with Churchill Downs, and against the pool of other bettors. Rather than wagering for winnings paid out by a sportsbook or a casino, in pari-mutuel wagering, “[b]ettors stand to win a share of the total pool of money wagered.” A predetermined formula determines the amount each winning bet pays. Specifically, Mattera had bet that a horse called Mandaloun would win the race.
On race day in 2021, Mandaloun took second place behind a horse called Medina Spirit. However, shortly after the race, Medina Spirit tested positive for a banned substance in violation of the rules of the Kentucky Derby. Based on this drug test, over nine months after Medina Spirit had crossed the finish line, Churchill Downs “disqualified” the horse and published a new official result with Mandaloun in first place. Though the new order of finish matched Mattera’s bet, Churchill Downs announced that “‘[p]ari-mutuel wagering is not affected by this ruling,’” and the racetrack did not pay out pari-mutuel bets “based on the new order of finish.” Based on the lack of payment, Mattera, along with eighteen others who had made similar bets, sued Churchill Downs, Inc. and Medina Spirit’s owner, Bob Baffert.
The 6th Circuit
Mattera sued Bob Baffert and Churchill Downs, Inc. for negligence. The U.S. District Court for the Western District of Kentucky dismissed the case, holding that even if all of the facts that Mattera had alleged were true, they would not amount to sufficient evidence to prove his claims. Mattera then appealed the case to the U.S. Court of Appeals, 6th Circuit, which decided the case on May 2, 2024.
For the negligence claims, the 6th Circuit upheld the dismissal, holding that Mattera could not prove that he had suffered any harm–an element of negligence. In his lawsuit, Mattera argued that he had in fact suffered harm because the revised official finish order of the 2021 Derby left him with “‘correctly placed and unsettled wagers.’” However, Mattera did not argue that he would have had a winning bet had Medina Spirit not been in the race. Instead, Mattera argued that if it had not been for Baffert’s and Churchill Downs’ negligence, “‘no new official order of finish would exist leaving [Mattera] with correctly placed and unsettled wagers.’”
The 6th Circuit rejected this theory of damages based on a Kentucky law known as the “finality rule.” The rule mandates that, for pari-mutuel wagers, the only result that matters is “the first order of finish marked ‘official.’” The rule clarifies that even where a horse is disqualified and the race result revised, if the change occurred “‘after a race has been declared official for pari-mutuel payoff,’” then it will not affect pari-mutuel bets “‘in any way.’” The court emphasized that “[b]ettors consent to these rules when they place a bet.” Therefore, the court held that a wager is not, and can never be, “correctly placed if it does not match [the first official finish order].” Courts have no authority to disturb the first official finish order of a race. Therefore, that result will stand for pari-mutuel betting purposes, no matter if, how, or why it is later changed. For Mattera, since the finish order change came after Derby officials had marked the first result official, the new finish order could not affect his pari-mutuel wager. Because Mattera had waived any other damages arguments, the 6th Circuit upheld the dismissal of the negligence claims for failure to allege harm.
Mattera also alleged that Churchill Downs was liable for “breach of contract, violation of the Kentucky Consumer Protection Act, and unjust enrichment.” The 6th Circuit similarly upheld dismissal of these claims, stating that Mattera did not have “‘correctly placed and unsettled wagers,’” and therefore could neither argue that he had been harmed, nor that Churchill downs had unfairly kept his wager.
Implications for Kentucky Derby Bettors
It is easy to understand why Mattera felt wronged following the 2021 Kentucky Derby. After all, he had placed a bet on Mandaloun, and the only horse that crossed the finish line before Mandaloun had used a banned substance. Worsening the sting, there is no dispute that Medina Spirit violated the rules. Bob Baffert has since publicly admitted to administering a banned substance to Medina Spirit. Nevertheless, Mattera lost his bet.
At the same time, Kentucky’s finality rule has value as a public policy. Though there might be cases like Mattera’s, the rule ultimately prevents lawsuits that might occur after any Kentucky Derby. If a revised race result could change pari-mutuel bets, then there would be an incentive for bettors who lost the Kentucky Derby to file lawsuits alleging that wrongdoing had cost them their bets. From Kentucky’s perspective, the finality rule provides valuable protection for the state’s courts, preventing them from becoming forums to litigate each year’s Kentucky Derby results.
In any event, the 6th Circuit has made the finality rule’s impact on the Kentucky Derby clear. When bettors place pari-mutuel wagers on the race, they bet on the first published order of finish that is designated official. In this respect, bettors are out of luck in the case that a race result is later revised, regardless of the reason
Sources:
Dick Downey, Bettors Lose Case Against Baffert, CDI in Appeals Court, Bloodhorse (May 3, 2024, 11:00 AM).
Kevin Koeninger, Sixth Circuit won’t reinstate bettors’ Kentucky Derby claims against horse trainer Bob Baffert, Courthouse News Service (May 2, 2024).
Mattera v. Baffert, No. 23-5750, 2024 U.S. App. LEXIS 10720 (6th Cir. May 2, 2024).
Peter Hayes, Bob Baffert, Churchill Downs Escape Kentucky Derby Wager Lawsuit, Bloomberg Law (May 3, 2024, 10:38 AM).
Ryan Young, Bettors file lawsuits against Bob Baffert after Medina Spirit tests positive for regulated drug, Yahoo! Sports (May 14, 2021).
T.D. Thornton, Baffert Wants Bettors’ Class-Action Suit Reassigned to Judge Who Already Dismissed Similar Case, Thoroughbred Daily News (Feb. 26, 2024, 3:37 PM).