Posts Tagged ‘Tote System’

KENTUCKY RACING: AN INTEGRITY TASK FARCE?

Tuesday, October 7th, 2008

By Ray Paulick

People are making and cancelling bets on horses after races have begun. Let me repeat that: PEOPLE ARE MAKING AND CANCELLING BETS ON HORSES AFTER RACES HAVE BEGUN. Does anyone have a problem with that?

Apparently, several members appointed to a subcommittee on integrity that is part of a Task Force on the Future of Horse Racing in Kentucky aren’t all that concerned about the issue. The integrity subcommittee couldn’t even muster a quorum when three of its six voting members failed to show up for the panel’s first meeting at the offices of the Kentucky Horse Racing Commission on Monday afternoon.

At the outset of the meeting, subcommittee chairman Ned Bonnie (a member of the Kentucky Horse Racing Commission) said the panel was poised to take action on integrity issues until he was reminded by the commission’s executive director, Lisa Underwood, that a quorum wasn’t present.

Bonnie was joined by subcommittee members Robert Beck Jr. (an attorney and chairman of the Kentucky Horse Racing Commission) and Robert Vance, the secretary of Kentucky’s Environmental and Public Protection Cabinet. But missing were racing commission vice-chairman Tracy Farmer (chairman of the Task Force on the Future of Horse Racing and a Thoroughbred owner and breeder), Louisville real estate developer Brian Lavin and Paducah, Ky., attorney Duncan Pitchford.

It’s no wonder that some are referring to this entire exercise proposed by Kentucky Gov. Steve Beshear as a “task farce.”

Bonnie was disappointed at the no-shows, to be sure, but how do you think horseplayers feel? They are the ones, after all, whose confidence has been eroded by an archaic totalizator system with flaws that are being exploited by techno-savvy thieves; off-shore rebate shops that are virtually unregulated; a patchwork network of simulcast sites that answer to 38 different regulatory bodies; and ineffective rules, many of which were written for the good old days when the only bets made took place on track with a live teller.

For anyone not paying attention, the volume of pari-mutuel handle on horse racing is down this year by roughly 5%. It’s not just a Kentucky problem. By year’s end, total pari-mutuel handle in the United States may very well dip below $14 billion for the first time since 1999. That’s 10 years of stagnation.

We can blame the economy or competition from other forms of entertainment and gambling. Or we can ask our customers, which the National Thoroughbred Racing Association recently did, as to why they are not pushing as many dollars into the pari-mutuel pools as they used to. According to Keith Chamblin, the NTRA executive who outlined the consumer research at an industry conference, the attitudes of racing’s best customers can be summed up in five words: “Our core fans are pissed.”

Consumers are pissed because they feel cheaters continue to win races at an alarming rate by using performance enhancing drugs. They are convinced people are making or cancelling bets after races begin. And they see racing commissions and task forces and blue ribbon panels as pointless exercises conducted by mindless political appointees who are too out of tune to understand the problems or too apathetic to fix them.

That may or may not be the case with Kentucky’s Task Force and its various subcommittees. It should be noted that a majority of the ex officio non-voting members of the integrity subcommittee were on hand, including owner-breeder Gary Biszantz, professional horseplayer Mike Maloney and businessman Frank Kling, who spent a great deal of time and effort working on wagering integrity issues as a member of the Kentucky Horse Racing Authority, a panel dissolved by Beshear earlier this year and replaced with the current racing commission. All three spoke up in ways that indicate they understand the problems and sense the urgency in addressing them.

But the ex officio members can’t vote on any action items addressed by the integrity subcommittee. That’s up to the six voting members to do – if and when they show up for a meeting.

In the meantime, the entire Task Force should remember those five chilling words repeated by Chamblin: “Our core fans are pissed.”

The ball is in the court of the Kentucky Task Force and regulators, track operators, account wagering companies and others throughout this country.

What are they going to do address the concerns of racing’s best customers?

Copyright © 2008, The Paulick Report

Sign up for our Email Flashes to get the latest news, analysis and commentary from Ray Paulick

Visit the Paulick Report for all the latest news throughout the racing world

FREE MONEY: PAST-POST BETTING

Monday, July 7th, 2008
The fourth race at Philadelphia Park June 28 was just a run-of-the-mill claiming contest until the Scientific Games totalizator system malfunctioned shortly after Magical American crossed the finish line as the winner. The top three finishers (4-2-3) were put on the board, but the problems with the tote delayed Philadelphia Park from making the race official and posting the payoffs. The fifth race at the Pennsylvania track was run without betting.
A little over a thousand miles away at Tampa Bay Downs on Florida’s Gulf Coast, some horseplayers became curious about what impact the tote failure had on the AmTote wagering machines there.
Lo and behold, they discovered wagers made on the winning horses in Philadelphia Park’s fourth race were still being accepted. The Paulick Report has learned that players started punching out win tickets, exactas and trifectas. The delay, from the time the Philadelphia Park race was run until someone in the Tampa Bay mutuels department realized there was a problem, was about 10 minutes, at which time betting was halted. It was nearly 15 minutes from the time the race was run until the Florida track received a stop betting order from Scientific Games (formerly Autotote).
In the meantime, a considerable amount of money was bet on what can only be described as a horseplayer’s dream: a “sure thing.” It was free money.
One player bet $1,000 on his own: $500 to win and a $500 exacta. He got a tidy return of $8,100 when the system was up and running later that afternoon. In all, Tampa Bay took in $2,000 in wagers on the race and paid out more than $13,000 to the lucky (if somewhat dishonest) fans.
The past-post wagers went into the betting pools at Philadelphia Park, shortening payoffs for those who picked the winning combinations honestly. Though the size of the pools for the race were not unusually large, it appears the winner’s odds were driven down by the past-post bets.
One bet that would not be affected was the daily double on races three and four, which paid $32.40 after a 7-10 odds-on favorite won the third race. (Bets on the daily double would have been made prior to the third race.) That payoff suggests Magical American should have gone off at odds of about 8-1. But when the payoffs were posted, Magical American paid only $9.20 on a $2 win bet.
“We are aware of the situation,” Curtis Linnell, director of wagering analysis for the Thoroughbred Racing Protective Bureau, told the Paulick Report. “It looks like it may have been isolated to Tampa. It didn’t look like it was widespread.”
Linnell said he could not comment further because the circumstances are under review.
The stop betting signal is part of the standard protocol established for pari-mutuel wagering, according to Linnell. The signal goes from the host track to other hubs or tote systems handling wagers going into the host track pool. He said a “break” in the communications signals could prevent the stop betting signal from going out.
“That situation can happen, and in very isolated situations it has,” Linnell said.
Joe Wilson, the chief operating officer of Philadelphia Park, did not return phone calls to the Paulick Report seeking comment. A spokesperson for the Pennsylvania Horse Racing Commission said the matter is being investigated.
This issue begs the question of who is minding the tote, a patchwork, less-than-state-of-the-art wagering network that handles the approximate $15-billion in bets each year and flows through racetracks, hubs, guest hubs, off-track betting sites, account wagering systems, and off-shore rebate shops?
State racing commissions look into these matters, but in this case the wagers were made across state lines. The TRPB has an investigative branch, but it is more concerned with tracking wagering patterns that could suggest race-fixing by racing participants. The National Thoroughbred Racing Association did have its focus on wagering integrity, particularly after the Breeders’ Cup Pick Six scandal of 2002. Plans were announced by the NTRA to staff an Office of Wagering Integrity, but those plans went by the wayside when the industry could not reach a consensus on what to do.
Alex Waldrop, the current head of the NTRA, said during a recent Congressional hearing that racing is not a rudderless ship. But there doesn’t appear to be anyone with his hands on the wheel of the most important boat in the racing industry’s fleet – the tote system.

By Ray Paulick

Copyright ©2008, The Paulick Report

Sign up for our Email Flashes to get the latest news, analysis and commentary from Ray Paulick.