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Tote Insecurity Takes Many Forms
Monday, December 2, 2013 - by Chris Wittstruck

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Chris Wittstruck

If the game is rigged, only the cheaters win. If everybody thinks the game is rigged, then nobody wins, because eventually everyone just walks away in disgust.


No, this column isn’t about medication positives; it’s about something even more concerning. The very existence of our sport depends upon its ability to at all times render secure the way in which wagering is handled. Any conversation concerning the integrity of racing is incomplete unless issues involving tote security are discussed.


Past-Posting is but one threat to wagering integrity. Past-posting is the placing of bets after the race has started, when all betting is supposed to be closed. In 2010, a computer malfunction allowed for wagering on a completed Thoroughbred race at Philadelphia Park (now Parx Racing) well after the last horse crossed the finish line. Dishonest gamblers at a simulcasting site punched in winning straight and exotic bets. The effect of this security breach was not limited to the rewarding of the unscrupulous. Legitimate bettors suffered due to receiving lower payouts than they should have because of the late betting by others on what were the surest of sure things.


Unfortunately, past-posting may not be isolated, and it isn’t ancient history. In October of this year, it was reported that an investigation into numerous wagers made after the running of an unidentified Thoroughbred race has been commenced by the jurisdiction’s racing commission, as well as the racetrack involved.


Besides past-posting, pool manipulation is a menace. Just last month, an investigation was opened into the placing, and then cancelling of a large wager on a claiming race in California.  The scenario isn’t hard to understand. Betting a large amount on a longshot causes a precipitous drop in that horse’s odds. When folks believe that the smart money is on that particular entrant, it draws more folks into wagering on the nag. Then, the manipulator simply cancels his wager right before post time. Presumably, the race winner’s odds, as well as its exotic payouts, close higher than they otherwise would have due to the enhanced pool percentage wagered by board-watching gamblers on the manipulator’s initial selection.


Interestingly, the process of making a wager and then cancelling it is permitted by several Advance Deposit Wagering (“ADW”) companies. One allows customers to cancel up to 20 wagers a day and 200 wagers per month, though the total amount per wager cannot exceed $1,000. Another is more detailed:


“As to Thoroughbred racing wagers, no wager over $500 in win, place, show pools on any betting entry and/or $50 on any one combination in daily double, exacta, quinella, trifecta, pick three, or other pools will be cancelled on the Internet.  As to Harness racing wagers, no wager over $100 in win, place, show pools on any betting entry and/or $50 on any one combination in daily double, exacta, quinella, trifecta, pick three or other pools will be cancelled on the Internet.” 


Despite the specific language, this particular ADW does reserve the right to refuse any cancellation which may cause substantial altering of odds, prices, or betting totals, and will certify in writing to a finding either allowing or rejecting such request. Most, if not all other ADW companies have a similar written refusal policy.


Still, in an age where computer hacking occurs at the highest levels of government and private industry, a written policy is only as good as the diligence employed to enforce its terms.


By way of analogy, consider the commencement of internet gambling in New Jersey. To comport with law banning interstate gambling, the Atlantic City casinos operating the gambling sites have erected a “digital fence.” This high-tech, virtual enclosure is set well within the state’s borders, thus creating certain “no play zones” along the Hudson River and elsewhere. This abundance of caution makes it difficult for a person physically in New York or Pennsylvania to violate state law by playing over the internet.


Racetracks, ADWs, tote companies and commissions all have a significant role to play in ensuring that tote integrity policy is supported by both vigilance and technology. Compliance with both legal regulation and in-house security procedures should be of paramount importance. In that regard, internal controls within each entity and agency must be established and adhered to in stringent fashion. The notorious 2002 Breeders’ Cup Pick 6 scandal was masterminded by a senior tote company employee with unique access to the entire computer network. The lesson learned was that the question “who’s watching the store?” is secondary to the question, “who’s watching who’s watching the store?”   


Possibly the hardest tote integrity problem to cure is the one that doesn’t involve a tote problem. If the general perception among the wagering public is that something is amiss, that appearance of impropriety is enough to send bettors heading for another opportunity. The best example is the persistent fluctuation of tote board odds after a race begins. The industry repeatedly explains that these are simply delayed displays of wagering activity occurring before the start of the race. Yet, with every new investigation of a possible past-posting incident, the innocent explanations become less and less plausible in the public’s mind.


Not so long ago, the only legitimate way to place a wager on a horse race was through a manned mutuel window. Times have changed dramatically, and so too have the integrity protocols associated with accepting bets. Like any security scheme, its level of efficacy is exhibited in the breach. Once a bank is robbed, the stigma remains, even if the customers didn’t lose money.


In sum, there’s much more to a level playing field than a race where the horses are all drug free.


Chris E. Wittstruck is an attorney, a director of the Standardbred Owners Association of New York and a charter member of the Albany Law School Racing and Gaming Law Network.

Editor's Note: The views contained in this column are that of the author alone, and do not necessarily represent the opinions or views of the United States Trotting Association.


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