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.

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