Northern Irish Megan McCann, who was 19 when she placed the bet last year, claims she is owed £1,009,960 by the Gibraltar government licenced betting giant.
She says she staked almost £25,000 on a dozen horses in four different races, but that the company is refusing to honour the bets.
But the company has accused McCann of fraud, stating that she is in ‘flagrant breach’ of the terms and conditions because the betting stake was provided by a third party.
A spokesman for bet365 said: “A full investigation has been carried out into the circumstances of the bet that was placed.
“Bet365 is entirely satisfied the circumstances are such that winnings are not payable in relation to it.
“We expect this position to be upheld at trial. We are not prepared to comment further whilst litigation is ongoing.”