Posts Tagged ‘advanced monitoring systems’

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.

By Ray Paulick

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.”

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.

 

“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.’”

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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