08/24/2012 3:09PM

Emerald Downs: Bettor makes, then cancels $100K wager

Email

A $100,000 win bet made and then canceled within seconds of the start of the sixth race at Emerald Downs on Thursday night created havoc in the race’s betting pools when other bettors placed tens of thousands of dollars in wagers against the horse but did not have time to cancel their own bets.

The $100,000 bet, which was made by a customer of the account-wagering company XpressBet, according to officials, set off a flurry of late bets by well-connected bettors and robotic wagering programs designed to look for inefficiencies in betting pools. Those programs were stuck with their bets when the $100,000 win bet was canceled just seconds prior to the horses leaving the starting gate.

The $100,000 win bet was placed on the No. 2 horse in the race, Lonely and Free, who dropped from 5-1 or 6-1 with a minute to post to 1-20 just as the horses were being loaded into the gate. The bet was canceled before the track’s bet-processing system had time to display the new odds, so most bettors were unaware that the horse had been targeted by the big wager.

Ron Luniewski, the chief executive officer of XpressBet, said that the bettor was a “high net-worth individual who is new to racing” and who made an “honest mistake” by punching in the $100,000 bet. The bettor had meant to wager $1,000 to win on the horse, Luniewski said.

“We are continuing our investigation, but I can assure you there was no intent to manipulate the wagering pools,” Luniewski said.

“They called it a wide thumb problem,” said Ron Crockett, the owner of Emerald Downs. “That’s a pretty wide thumb.”

Because there was a slight delay between the placing of the bet and the cancellation, the robotic wagering programs, which receive real-time access to wagering pools, spotted the large wager and then began making win bets on the other horses in the race, seeking to capitalize on the arbitrage opportunities between the real win odds of the other horses in the race and the wildly inflated odds created by the $100,000 win bet. When the $100,000 bet was canceled, the win odds on Lonely and Free soared to 52-1, while the win odds on all the other horses dropped, reflecting the new ratios in the win pool.

After leading into deep stretch, Lonely and Free finished second, beaten a neck, but, with all the money concentrated in the win pool, she paid $6.60 to place, within a normal range. The race was won by a Have’N a Wild Time, who paid $15 to win. All of the exotic wagers in the race also paid within a reasonable range.

Prior to the $100,000 bet being placed, the size of the win pool for the sixth race was approximately $14,000, according to state steward Thelma Lynn. After the $100,000 bet was canceled and the race went off, the total size of the win pool was approximately $84,000, or at least $50,000 more than a typical Emerald win pool, because of the number of bets made by the robotic programs.

Although everyone involved in the incident has said that there is no evidence that anyone deliberately manipulated the pools, the final win odds on Lonely and Free certainly suggests that a bettor could employ a strategy to entice robots into the pool by making and canceling a large win bet to drive up the odds on the horse. Lonely and Free was 6-1 on the morning line, and if she had not been beaten by a neck in the race, she would have paid $106.20.