11/13/2006 12:00AM

Computer bets skew pick 3


Calder Race Course in Florida shut off the offshore rebate shop International Racing Group for a two-week period ending last Saturday after a glitch in a robotic wagering system used by one of IRG's customers resulted in an unusually large pick three pool and small payout, according to Ken Dunn, the track's general manager.

Calder racing officials said that an investigation into the pick three on Oct. 28 concluded that the robotic wagering system inadvertently sent in a series of pick three wagers in $31.74 denominations, rather than $1. As a result, the robotic system put $40,000 worth of wagers into the pool just seconds before the race started. The entire pool, including the IRG wagers, was $54,482, approximately four times the average pick three pool at Calder on a Saturday.

The payout for the pick three, which linked winners paying $7, $29.20, and $4.60, was $54.40, roughly one-quarter of the parlay price of $235. In addition, the total amount returned to all winning bettors barely exceeded the amount of money bet by the IRG customer. Calder has a 24 percent takeout on pick three pools, so after breakage, a maximum of $41,398 was distributed to winning bettors.

After the race, Calder stopped taking wagers from IRG to determine whether any foul play had occurred, according to Dunn. The shop was restored to the pools this past Saturday after the investigation revealed the computer glitch and IRG and its bet-processing partner, United Tote, assured Calder officials that a software patch had fixed the problem.

The episode underscores the difficulty the racing industry is facing as a result of rapid technological change. Robotic wagering systems like those used by some high-rolling customers of rebate shops have over the past six years changed the nature of parimutuel wagering because the sophisticated arbitrage systems, coupled with large rebates, are designed to send hundreds of large bet combinations into the pools just prior to post, sometimes resulting in odd payouts and dramatic odds changes after a race has started.

In the spring of 2001, a robotic wagering system used by a customer of a rebate shop in North Dakota sent in 43 individual $5,000 win wagers on Monarchos in the Florida Derby at Gulfstream, driving the horse's odds down from 7-2 at post time to 7-5 by the time the results were posted. Gamblers demanded an explanation for the late odds drop, and Gulfstream shut off the rebate shop customer's computer link while an investigation was conducted. The investigation thrust the issue of robotic wagering programs into the spotlight for the first time.

IRG is based in Curacao and is owned by Youbet.com, the online horse race wagering operation. Youbet.com also owns United Tote, the bet-processing company that designed and services the interface between the robotic wagering program and commingled pools on behalf of IRG's high-rolling customers.

Youbet and United Tote officials did not return phone calls on Monday.

Dunn said that the because the bets flowed into the pools just prior to the start, the track had no way of refusing the bets. The bettor's account was debited for the wagers, Dunn said, citing officials involved in the investigation, but it was not known if the bettor was ultimately credited for the bets by United Tote or Youbet.

"This is really something that the industry needs to look at, because we need some safeguards to prevent this from happening," Dunn said. "There needs to be a way to know when a computer is making an error and stop it from sending the bets in."