Defending champions New Zealand breezed into a 3-0 lead in the best of 13 Americas Cup on Sunday after Ben Ainslie's Ineos Britannia was given a start-line penalty.
A risky pre-race maneuver earned Ineos a 75-meter penalty when the two multi-million dollars state-of-the-art craft came within a meter of collision.
"It was close, I thought it was okay," said Ainslee. "The umpires didn't see it that way."
"I was a bit uncomfortable with how close that was," said Kiwi skipper Peter Burling.
Ineos were beaten by around 50 seconds and are just four races away from defeat. The fourth race takes place later on Sunday.
With weather conditions optimal for overtaking off the coast of the Catalan capital Barcelona, the British craft trailed for the entirety of the race.
The Kiwis burst into action Saturday with two clear wins on an almost windless day.
Fans have flooded into Barcelona and were able to observe the rectangular course just offshore from the Barcelona old port, and visible from the Barceloneta beach.
Ineos Britannia, bankrolled by Manchester United co-owner Jim Ratcliffe, is bidding to become the first British winner in the 173-year history of the America's Cup after coming through the Louis Vuitton challenger series, beating the Italian boat Luna Rossa last week.
The Kiwis are the double defending champions and they had the luxury of sitting and waiting to see who emerged as their challenger in Barcelona.