Updated on 09/16/2011 8:35AM

Integrity of parimutuel betting at risk


WASHINGTON - The suspicious wager placed on the Breeders' Cup Pick Six may have defrauded bettors of more than $3 million, and that is only the beginning of the racing industry's problems in this scandal. It raises questions about the integrity of the entire American parimutuel business and, if true, would confirm doubts that horseplayers have harbored for years.

Bettors frequently wonder if cheaters have found a way to wager after a race has begun. They wonder when a horse's odds drop from 3-1 to 2-1 just before he wins. They wonder when various types of exotic bets return unusually low payoffs. Wagers now come into a track's parimutuel pool from many different sources, including offtrack and telephone-betting operations that have little or no regulation. Couldn't there be rogues among them? Yet every leader of the American parimutuel industry has insisted that the system is secure and there is no way to bet after a race begins.

But in the wake of Saturday's events at Arlington Park, it's possible that these assurances were wrong. Somebody might have beaten the system in the Breeders' Cup. And if someone could do it on America's biggest racing event, how many other weaknesses in the parimutuel system have they found and exploited?

The incident came to light after a single bettor held all six winning combinations on the Breeders' Cup Pick Six, worth more than $3 million. The bets were placed by phone to Catskill Region Off-Track Betting, whose chairman Donald Groth continues to insist they were legitimate.

But anyone who understands pick six wagering believes it is inconceivable that a handicapper could have made this bet before some of the races were run. The winning bettor, identified as Derrick Davis, 29, of Baltimore, singled the winners of the first four races, including the 26-1 Domedriver and the 13-1 Starine. I would wager confidently that no other bettor in America playing a substantial ticket singled either of these horses - let alone both. Gamblers play the pick six by singling standout horses and using several contenders in races where they hope to catch a longshot. Moreover, Davis played in a $12 denomination, enabling him to hit the winning combination six times. This, too, is almost unimaginable. Even high rollers typically play the minimum $2 unit, because they want to use their available capital to cover as many combinations as possible.

The structure of the winning bet - four singles followed by all the horses in the last two races - looked even more suspicious after the Daily Racing Form Wednesday explained the way computer systems handle the pick six. When betting closes, the outlets taking the pick six tell the host track the total of wagers they have taken. But because all of the individual pick six combinations involve so much data, computer gridlock would result if every outlet transmitted all the information immediately. So the individual bets are not sent until later - after four races of the pick six have been run. If doctored, a ticket with four singles followed by two "alls" would suggest that somebody not only knew how the system worked but also knew how to penetrate the system and insert winning numbers after four races had been run.

If this is the case, the winner had a magic formula for making a fortune. It is probably naive to assume that Saturday is the first time it was used. Such a scam might have gone on indefinitely if a $12 ticket including singles in the first four races had not been so conspicuously suspicious. If the winner had played a $2 ticket using two or three horses in each of the first four legs of the pick six, followed by two "alls," he would be hailed as a handicapping and betting genius for making his $3 million score.

After the questions about the Breeders' Cup, bettors must wonder how many pick sixes at tracks across the country might have been won by fraud. How many tens of millions of dollars might have been taken from the game's customers who wrongly trusted the integrity of the parimutuel system? When a horse plummets from 3-1 to 2-1 in mid-race now, who is going to believe the assurances of the tote companies that it is impossible to bet after a race has started?

The racing industry faces a major crisis of confidence. Some of its leaders may still be in denial, such as Brooks Pierce, president of Autotote, the company that processed the pick six bets. He made this astounding comment to The New York Times: "I would like to think we have a pretty good story about a guy who didn't bet much and made a lot of money. I believe this is good for racing."

But to their credit, the Breeders' Cup and the National Thoroughbred Racing Association immediately recognized the magnitude of the problem, issued a statement and publicly requested an investigation by New York racing authorities.

Until now, the NTRA's major undertaking has been its effort to promote the sport with such ventures as its "Go, Baby, Go" advertising campaign. Plenty of critics have questioned the organization's usefulness. But now the sport desperately needs the NTRA to assume a strong leadership role. The NTRA has to address the operation of the nation's tote systems and whole issue of parimutuel integrity. It must insure that nobody can ever again tamper with computer systems that handle wagers. When the NTRA has done so, it must convince bettors that the game is honest. This is going to require more than a cute slogan and an advertising campaign, because there is scarcely a serious bettor left in America who trusts the parimutuel system.

(c) 2002 The Washington Post