Better Betting - by Dan Liebman

In light of two recent episodes of wagering integrity—or lack of same—it appears the industry has done little since being warned a decade ago that its infrastructure was woefully inadequate.

This month, two past-posting incidents, where wagers are placed after a race has begun, have occurred. On May 16, wagering through Scientific Games on the Los Angeles Handicap (gr. III) at Hollywood Park did not close at 33 simulcast sites until after the race was run. All wagers (totaling less than $100,000) on the race at those locations were refunded.

Four days later, Hollywood Casino at Penn National Race Course refunded more than $150,000 after a router failed at its main wagering hub in Oregon operated by United Tote. The result was that bets were processed after the start of the race.

In both instances, even those who wagered properly had their tickets canceled.

At The Jockey Club Round Table in 1999, Mark Elliott, manager of IBM Global Services, the world’s leading provider of information technology, discussed ways his company could assist Thoroughbred racing. IBM Global Services had been hired by the National Thoroughbred Racing Association to examine the industry’s wagering technology, and Elliott found much that could be improved upon.

However, Elliott saw nothing that could not be fixed, and IBM Global Services offered to invest, through loans to the industry, $100-$200 million that would have been repaid with interest, a percentage of handle from an industry-owned tote system, and bonuses based on both reductions in cost and increases in handle.

Less than a year later Elliott was quoted as saying, “I don’t want to be overly abusive, but as an industry, you are as far behind in the use of technology to improve your business as any I have ever seen.”

Though Elliott was correct, the NTRA/IBM Global Services partnership was “retooled,” then NTRA chief executive officer Tim Smith said in October 2000. The industry could not afford, as Elliott recommended, a broadband network, Smith said, and the notion of an industry-controlled tote system was shelved, presumably because it would have placed the NTRA in competition with its members that operate and/or own various wagering systems.

Two years later (2002) the industry looked foolish when the Breeders’ Cup Ultra Pick 6 was manipulated by an employee of Autotote Corp. Few knew that Pick Six wagers were not transmitted to host sites immediately by wagering hubs, but rather after the fifth leg. In essence, only live tickets were scanned by the host track. Without the broadband system Elliott suggested, submitting the tickets otherwise would crush the tote system’s outdated transmission lines.

Following the Pick Six scandal, Giuliani Partners, headed by former New York City Mayor Rudy Giuliani, was hired to review the industry’s wagering protocols and tote systems as part of the NTRA’s new Wagering Integrity Alliance. Reportedly paid seven figures, Giuliani spoke at the 2003 Jockey Club Round Table, calling for the formation of a National Office of Wagering Security and a set of uniform standards for pari-mutuel facilities.

A permanent wagering security chief, Sharon O’Bryan, was hired, then resigned; Isidore Sobkoski served as interim director and wagering integrity consultant for a short time.

It was revealed following last year’s Kentucky Derby Presented by Yum! Brands (gr. I) that quick pick bets for the race’s superfecta purchased at Bay Meadows in Northern California did not include the number 20, which happened to be the saddlecloth number worn by winner Big Brown. A spokesman for tote company Scientific Games said a “computer glitch” caused the error.

Today, as reports by IBM Global Services and Giuliani Partners sit on bookcase shelves, large and small bettors alike continue to complain about late-changing odds and examples of past-posting.

The integrity of wagering on Thoroughbred racing in North America continues to come under scrutiny. Judging by our past performances, little has improved in the past decade.

7 Comments

Leave a Comment:

sweet terchi

I really don't think that at this point anything will improve since the "computer glitch" are humans in disguise. The lure to scam will always be there, so the scrutiny for wagering  will always have to be on the ball

27 May 2009 2:09 PM
C Bea

Unfortunately this Industry is too cheap to invest for the sake of it's own fate and future. We'll be sitting here 10 years from now talking about the same thing...blah blah blah.

27 May 2009 10:16 PM
UCLinden

You would think in today's world with all the hi-tech technology, the racing industry would sit down

and " right " everything to put their house in order. That's part of the problem with the business, it's all fragmented.

Perhaps if horse racing consolidated everything under one roof , run by a highly regarded company ( IBM ), the betting public

would have more confidence in racing operations.

Sometimes you get the notion when the industry finds way to " right " itself, make itself better, more presentable, they stick their heads in the sand and hope the problem goes away.

We see issues that are always discussed ( attendance / wagering ), and what do we do: make excuses, run & hide, tomorrow will be another day ,instead of finding a solution.

28 May 2009 7:25 AM
Richard R

The pari-mutuel network uses a "store and forward" method whereby data is accumulated at regional hubs and then forwarded to the host track for the relevant race when that race is opened to receive network bets.  Prior to the Fix-Six scandal, Pick-6 bets were being held at the hub until after the FOURTH leg of the series had been run (not the fifth leg as was stated).  Delaying those transmissions reduced network traffic and used less resources at the host site.  I believe that the network is as vulnerable today to infiltraton and manipulation as it was in 2002, except that the point of "attack" has been moved to the host-track computer facility.  A person with admin privileges, knowledge of the operating system's "alarms" and familarity with the betting application data structures; and, an appetite for unscrupulous behavior is all it takes.  If I were a betting man, I would put the line at even money that something similar to the BC Fix-Six has been accomplished since then.

29 May 2009 2:10 PM
Cigar16

I do not claim to know exactly how tote systems work and how they may be be infiltrated as part of a scam. But what I do know is that as with the article and earlier posts YES, they are woefully inadequate. I know this simply because I work as a mutuel teller and as such have found myself and the general race goer permanently inconvenienced in many simple ways that did not have to be if Tote had done a better job.

Anyone who works at a track knows that nowadays with 90% of REGULAR clientel being ancient, the risk of bell ringers cancelling a broke trotter at post is also ancient. At post nowadays most tellers worry about the idiotic people running up to bet that don't know what track, horse, scratch, monetary denomination, or what exotic availability is there. Or what TV they were just looking at,

if it was a replay, or if they could even bet the race. You are lucky if you get a person who knew who Lucien Laurin was, and who actually speaks English is intelligible, and literate. However, because of post race odds integrity problems with Tote companies, many years ago the delay us tellers had to cancel a wrongly punched ticket was taken away. Now we have to eat what we punch financially. Hard to swallow as those idiots walk away from the window with a blank, sometimes smug look knowing they asked for a $1 Superfecta BOX but did not want it when they realized it cost $24 dollars as opposed to the $1 they thought it would cost.

I also do not appreciate the slight embarrassment especially when a Pick-6 carryover is huge somewhere having to tell an average customer that we no longer have a Quick Pick option for placing this wager. No Quick Pick for anything. No Superfectas, Pentafectas (Super High Fives) Magna 5 wagers. Nothing. All because Scientific Games accidentally left out Big Brown (#20)of the Quick Pick wagering for the Derby at a particular track. Thanks guys.

Tote companies make my job so much nicer.

29 May 2009 4:47 PM
J.B.

While it's easy to beat up on the tote companies, it's time everyone realizes that the entire industry is at fault. The industry wants RCI or other forms mnitoring and/or validating information. But no one really wants to pay for it. "Let the Tote companies" do the programming." Well guess what. That costs money which if no one wants to pay for it, the companies can never recoup under the current climate. Tote systems are much more reliable then the perception out there. Yes, like any other industry, they have problems. Equipment failures, communication failures, human mistakes and of course the rare rouge tote guy, just like any other company. Cigar points at the tote. Waht about the many tellers who actively work with customers, having a bet that has been made ready to cancel and manipulate odds? Again, I say the whole industry is at fault. Now as to the integrity of the pools. We hear about late odds flashes, etc. And then we have the incidents of the last three weeks. At Hollywood, according to reports, one system did not recieve stop betting from the other and therefore did not send the stop betting to the guest sites that were linked to that system. In both the Penn cases, the tote company lost a router at the hub and the stop betting command was not transmitted to the hub system from the track. In all three instances, the host track decided not to accept any suspected past posting pools, choosing to clear and close those pools. Please note, this is not the tote companies decision. The report what happened to the mutuel manager of the affected track, give their recommendations then proceed as the track wishes. In all three cases, pool integrity was protected as no suspect monies were merged. And yes, unfotyunately customers at the guest sites were affected. Penn National is now stopping wagering as the first horse is loaded into the gate. Great! THE EASIEST FIX FOR THIS PROBLEM FOR THE SHORT TERM IS STOP BETTING AT 0MTP. It doesn't cost a penny of programming time. Everysystem out there can be automatically set for this. And I don't want to hear the crying about how much money the track will lose by not going to break. Many years ago I watched a mutuel manager stopping wagering at 0MTO when his meet opened for the beginning of the year. He was shutting people out 30 deep for the first races. The owner of the track came running dowm screaming to change back to the old way. The mutuel manager looked at him and said these exact words. "bettors are like puppies. they can be trained" Within 5 races they were getting to the windows. It works! And until a better way comes along, it goes at least 95% of the wat to insuring the integrity of the pools as they should be merged with the host system before the break.

07 Jun 2009 12:39 PM
J.B.

GMan,

Dan recaps in a nutshell the brief history of integrity discussions. When all is said and done, he's right. The perception is there is complete lack of integrity in the pools. I can yell until I'm blue in the face that it is not true, but no one will listen, because the preception is there. Again, the industry cannot hide from it anymore. First, the short term, get the pools in quickly and cleanly. 0MTP does this. Then address the issue long term. It has to be done. The industry has to wake up. And no article or words is garbage if it adds to or begins the discussion of the problems the industry has.

07 Jun 2009 5:01 PM

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