GOOD NEWS FRIDAY sponsored by Liberation Farm - WAGERING INTEGRITY
It’s generally agreed that the foundation of the entire Thoroughbred industry in the United States rests on a pari-mutuel system that handles upwards of $15 billion per year in wagering transactions. The integrity of that system, once a given, is now subject to widespread skepticism because of a series of incidents dating back to 2002, when a small group of employees of one of the totalizator companies hacked into the system and attempted to pull off a major coup involving the Breeders’ Cup Pick Six.Powell said the industry has come a long way in at least recognizing the problems of tote security. “When I first started negotiating contracts with the tote companies, the only security that was ever discussed was that the tote room at the racetrack had to be secured with a lock,†he said. “That was tote security. We now know it’s so much more than that. Tracks have to ask more questions of the tote companies. Fans have to keep doing what they’ve been doing—keep raising the issue when incidents occur.
Since then, horseplayers have kept a wary eye on the tote board during the running of races, when they’ve routinely seen odds changing as late money pours in to the system. Officials with racetracks and tote companies have insisted those odds changes are not the result of wagers made after a race has begun –otherwise known as past-post betting—but occur because of the time it takes for legal wagers to cycle through the system.
But there have been more than a few incidents of actual late betting, just in the past year, where communications errors occur and a “stop betting†signal has not been received by all of the sites taking wagers. As a result, many horseplayers remain skeptical about the integrity of the wagering pools, and several racing commissions have looked into the problem. One of them, the Indiana Horse Racing Commission, became the first to take significant action by approving a contract between Hoosier Park and Indiana Downs and Advanced Monitoring Systems, or AMS, a Stamford, Conn., company that offers real-time transaction monitoring systems and services to the pari-mutuel, lottery and casino industries.
Isidore “Izzy†Sobkowski, the AMS president and CEO, was formerly a consultant with the National Thoroughbred Racing Association’s Office of Wagering Security, back when the NTRA felt the integrity of the pari-mutuel pools was a critically important issue. The NTRA, then under the guidance of Tim Smith, acted quickly in the wake of the Breeders’ Cup Pick Six scandal, hiring former New York Mayor Rudolph Giuliani’s company to investigate what happened that day and conduct a thorough review of the wagering systems. It found an antiquated system in need of serious attention and proposed, among other things, creation of the Office of Wagering Integrity. Only a few years earlier, Smth invited IBM Global Services to devise a solution for the industry’s aging tote infrastructure, but that project was shot down by small-minded track operators.
Sobkowski has, for the most part, been a one-man band in explaining the services of AMS to racetracks and racing commissions, but just this past week he has been joined by racing industry veteran Lonny Powell as a senior advisor to the company.
Powell (pictured, left) has been around. Or, as he likes to say, “This is not my first rodeo.†Following his graduation in the early 1980s from the University of Arizona Racetrack Industry program (which he headed for five years in the late 1980s), Powell has worked in many industry positions, as a racetrack manager (at Longacres, Turf Paradise, Santa Anita Park), regulatory chief (president of the Association of Racing Commissioners International), and as chief compliance and regulatory officer of the account wagering company Youbet.com. That’s real-life experience in the trenches.
As a member of the NTRA board representing Magna Entertainment, Powell heard the IBM pitch and was convinced then the industry was going upstream without a paddle with its wagering infrastructure. “But the Breeders’ Cup Pick Six scandal absolutely floored me,†he said. “That’s when I really realized the kind of trouble we were in. Then I started hearing about past-posting incidents. What (horseplayer) Mike Maloney said about some of these things during a University of Arizona Symposium absolutely made me feel as sick as when the Breeders’ Cup Pick Six happened. Our industry has so many other issues to deal with, but the fundamental integrity of our pools should be automatic. We need to be dealing with getting more racing on television, with revenue from slots, etc., We shouldn’t have to defend our pools.â€
The deal between AMS and the Indiana Horse Racing Commission came before Powell joined AMS as a senior advisor, but it’s interesting that the executive director of the Indiana Commission, Joe Gorajec, is a fellow University of Arizona Racetrack Industry Program alumni. A core group of program graduates from the early 1980s has made a major impact on the industry: besides Powell and Gorajec, there’s longtime racing official Pat Pope; Remi Bellocq, an executive with the national Horsemen’s Benevolent and Protective Association; former Equibase chief and current consultant Phil O’Hara; Jockey Club executive Dan Fick; Jane Greely of the Thoroughbred Racing Associations of North America, Wendy Davis, a coordinator of the UofA program; and racetrack exec Cal Rainey.
At Indiana, Gorajec and the Indiana Horse Racing Commission have developed a reputation for being tough on medication violators and progressive in solving problems. It comes to me as no surprise that it is the first commission to take tote security to the level it has. Racing commissions in Kentucky, California and New York are exploring ways to adapt real-time monitor of its wagering pools, but have yet to act. The Association of Racing Commissioners International, under the leadership of Ed Martin, has emphasized the importance of installing serious, real-time monitoring of pari-mutuel pools.
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“I think (Keeneland president) Nick Nicholson said it best,†Powell added. “’Our most valuable asset is the pari-mutuel pool. If you can’t trust it, nothing else survives.’â€
Here’s hoping that Powell and the AMS team can help restore the confidence in our wagering pools. Confidence in wagering integrity has fallen, and so has the amount of money bet: we’re at a 10-year low nationally in terms of total wagering dollars. It’s well past time we do something about it.
Liberation Farm celebrates the many horsemen and horsewomen who strive each day to make things better for horses and those who work with them. To learn more about Liberation Farm, click here.Copyright © 2009, The Paulick Report
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Tags: advanced monitoring systems, ams, good news friday sponsored by liberation farm, isidore sobkowski, izzy sobkowski, lonny powell, pari-mutuel wagering, Paulick Report, Ray Paulick, university of arizona racetrack industry program, wagering integrity
July 3rd, 2009 at 2:17 pm
Good News Friday ? More likely Black Friday !
So, Lonny Powell has surfaced again? Powell must hold the record for jobs on the “Administrative” side. An orally flatulent type, he is the epitome of the parasites that, though not knowing which end eats hay, live off the Thoroughbred business.
Do note the “Old School Tie” network is working full blast. They will take care of each other. As for taking care of the public interest ? Hmmn… we shall wait and see.
July 3rd, 2009 at 3:43 pm
Hilarious stuff Garrett!
When I was reading this, I said “OMG…Lonny Powell”
The tote system ever getting fixed is in huge jeopardy if this guy has anything to do with it.
Great to know that something so important to the future of the industry could be put in the hands of another lifetime incompetent racetrack paycheck casher.
July 3rd, 2009 at 4:39 pm
Wrong guy. What a joke!
July 3rd, 2009 at 8:04 pm
Garrrett, while I usually agree with you, you’re way off track on this one. Lonny grew up on the track. (Besides, why do you keep on about people ruining the industry when you did what you did to get your colt sold?) I’d much prefer to have alumni than wandering-eyed pub mates with integrity issues any day.
July 4th, 2009 at 8:09 am
Wagering integrity, or lack of it was dramatically affected when the greed factor over in the early eighties. Racetrack managements decided to eliminate the red button in the steward stands that controlled wager cut off and placed the task in the hands of mutual managers who convincingly found a new tool of manipulating post times. Post times became irrelevant; sound policy was replaced with shortsighted gains; stewards were marginalized and the sliding into mediocrity began. Since the advent of full blown simulcasting the wagering responsibilities were elevated from the pari mutual cellars to the executive suites where picking winners as to what groups could bet when; how much and zero minutes to post was adopted for the so called bad guys.
Name calling, branding and selective wagering became the order of the day until massive erosion of the total pools went from
insidious to full bloom. The culprits for the most part is management policy, not the evil doers in the eyes of neophytes and alphabet groups with little comprehension of how the system and the rules of racing really work and why they were implemented. There are rules by Roberts; Hoyle and for every sport that’s played. Racing has forgotten theirs and scrambles to determine their plight. Arizona is not the “old school” nor does it pump out “old boys” but they could if they introduced a rule book into their curriculum !
July 4th, 2009 at 3:35 pm
I’ve been told a wise man never tries to change a woman’s opinion because he can never be quite sure what it is. However, I am compelled to respond to Alison Murphy.
Where one grew up is not relevant to competence. Not everyone who grows up in Buckingham Palace is fit to be the monarch or even a princeling.
One must tolerate differences of opinion. One need not tolerate innuendo
There are many adages that fairly respond to the rest of # 4. Alison, you are old enough to know:
Only in law courts may we expect the truth, the whole truth and nothing but the truth and
courts exclude hearsay;
There are two sides to every story - yours and the facts;
He that is without sin ….. let him first cast a stone;
People in glasshouses ……………………………..;
Ladies should not do laundry in public because you never know what comes out
in the wash;
As to personal preferences, don’t forget : “Everyone to his own taste”, as the farmer said when he kissed a cow.
July 5th, 2009 at 11:34 am
Garrett, you’re so clever and so arrogant! No one knows or cares what the hell you’re talking about except me as I once admired your integrity and honesty. That is until I found the $5,000 in my husband’s sock drawer, which you admitted to have given him to pay a trainer to buy your colt. On that day and in recent ones, I have come to know the true you - a man declining in years who has spent a lot of time being hyper- critical of others, including those closest to you, to the benefit of no one but you. If only you worked on keeping your own side of the street clean you may have realized that perhaps your colt was a $30k horse and not a $50k he would have been sold without incentive. If my facts are wrong, then please tell me the truth this time, as I’m only remembering what you told at the time. As far as airing laundry in public, you should have thought about that before your email attempting to disparge me ended up in court filings.
As far as my glasshouse, Garrett, yes, I have made mistakes - big ones. However, I’m not slamming anyone’s integrity online as if I knew the person intimately. I only speak about that which I have personal knowledge, which is usually limited to from my 4+ years working with Greg Avioli and Keith Chambiln, who I do know, and the others at NTRA & Breeders’ Cup. My opinions are my own, but are not out of line with those of my former co-workers. I have no ax to grind. I only believe that the tenured employees of the NTRA and Breeders Cup have a track record which shows a failure to build racing in the public’s eye, which has ultimately resulted in a steady decline in handle. And, for that, they should be replaced.
Finally, if you truly believe that a court of law is the only place to find truth, then I feel for you.
So, while I appreciate your attempt to minimize my opinion about you with rhetoric aimed to disparage me, the fact remains you are just as bad as the people you critcize because you are just as dishonest.
July 6th, 2009 at 12:35 pm
As to wagering integrity. Besides the obvious finger pointing, etc. there are both quik fixes to address the rpoblem short term until the correct long term fix can be put in place. Again it’s easy to blame the tote companies, but the problem runs much deeper into the core of the way business is now done. 1: Stop betting no later then 1st horse in the gate. Instant upgrade to the perception of late pool shipments. 2: When a past posting incident occurs, inform the public NOW!. If pools are suspect, kill the pool. Better then anyone benefitting from a non-stop betting. 3: There are many good people in the industry that if given the chance could do a better job af trying to fix the integrity problem. Instead we trot out the same old retreads. High placed track management or bean counters, many who don’t know the first thing about the technical side of the business (maybe the entire business for that matter) to whom only what they percieve the bottom line to be to the same old peopel who have always had their heads in the sand as to progress and change have made the march to integrity almost impossible. Tote people do their best (here comes the scandel BS yelling I’m sure). As in any other part of the undustry, there are some bad apples. Unfortuantely hardly anyone realizes that they are giving the product their customers are demanding. The trakc don’t want to pay for upgrades of any kind when it comes to this issue and the totes can’t afford to do it. That’s fact! The industry has got to reach out to the people who can fix the problem. instead we get the same old tired rhetoric. As Rome burned, Nero fiddled. Well, welcome to the wagering industry.
July 7th, 2009 at 9:33 am
AMS outsources it’s software development to overseas development houses including resources in third world countries. What brainiac decided that the answer to our wagering integrity and data security problem was allowing third world (read questionable controls) companies to have keys to the Industry car!?!?!