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Sixth Circuit won’t reinstate bettors’ Kentucky Derby claims against horse trainer Bob Baffert

Neither Baffert nor Churchill Downs is liable for wagers lost on the 2021 Kentucky Derby, whose order of finish was altered after the disqualification of Medina Spirit.

CINCINNATI (CN) — The initial order of finish in a horse race is the only "official" result for betting purposes under Kentucky law, an appeals court panel ruled Thursday when it upheld the dismissal of a group of bettors' negligence and unjust enrichment claims.

Medina Spirit, a racehorse entered by legendary trainer Bob Baffert, crossed the finish line first in the 2021 Kentucky Derby at Churchill Downs in Louisville, but after a failed drug test, the order of finish was changed on Feb. 21, 2022.

The new order listed Mandaloun, Hot Rod Charlie and Essential Quality as the first three finishers of the race, and a class of individuals who wagered on that finish claimed in a federal lawsuit their bets should be paid.

U.S. District Court Judge David Hale, an Obama appointee, disagreed and dismissed the suit after he determined all of the bettors' damages were speculative in nature and that no contract had been formed with Churchill Downs when their wagers were made.

The bettors argued their appeal before the Sixth Circuit in March. Thursday's ruling upheld Hale's dismissal in its entirety.

"Under Kentucky law governing pari-mutuel wagering, the first official order of finish is final," Senior U.S. Circuit Judge R. Guy Cole Jr. wrote in the opinion. "Under that order, the plaintiffs lost their bets. For this reason, the complaint fails to state a claim upon which relief can be granted."

The three-judge panel agreed with Hale's conclusion the bettors failed to establish any harm that could give them standing to pursue negligence claims against either Baffert or the race track.

Cole, a Clinton appointee, cited Kentucky's rules for pari-mutuel wagering — where all wagers made on a certain race are "pooled" together — and emphasized the "finality rule," which indicates the first order of finish is "the only order that counts for pari-mutuel wagering purposes."

"A subsequent change in the order of finish may affect the purse and the history books," he continued, "but it will not impact pari-mutuel wagering. Under this system, a pari-mutuel wager placed on the Kentucky Derby is a specific prediction of how the horses will be ordered as determined by the official order of finish for pari-mutuel wagering purposes." (Emphasis in original.)

The court rejected the bettors' claim for breach of contract and reiterated their bets were not transformed into winning wagers once the order of finish was updated following Medina Spirit's disqualification.

"The plaintiffs' wagers were properly settled at zero when the stewards declared the original order of finish to be official for pari-mutuel wagering purposes. The plaintiffs were not harmed when they were not paid for losing wagers," Cole wrote.

Consumer protection claims brought under Kentucky law were similarly swept aside by the appeals court, which ruled the bettors had not suffered an "ascertainable loss of money or property."

"Their wagers had no value before Medina Spirit's disqualification and still have no value after the disqualification," Cole wrote.

U.S. Circuit Judges Eric Clay and Rachel Bloomekatz, appointees of Clinton and President Joe Biden, respectively, also sat on the panel and concurred with Cole's opinion.

The 150th edition of the Kentucky Derby will be run Saturday, May 4, although Baffert will not be involved after Churchill Downs added another year to the two-year suspension levied in the wake of the Medina Spirit disqualification.

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