10/18/2009 11:00PM

N.Y. bet processors employ monitor

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The three bet-processing companies that operate in New York State have reached agreements that will allow a separate computer-monitoring firm to analyze their data for discrepancies or suspicious wagering patterns beginning in 2010, according to racing officials.

The agreements, with Advanced Monitoring Systems, were required under a regulation the New York State Racing and Wagering Board passed last year despite opposition from some racetracks and bet-processing companies. Under the regulation, the monitoring company will be expected to have its system up and running by Jan. 1.

All three major bet-processing companies - Amtote, Scientific Games Racing, and United Tote - provide betting services for racetracks and offtrack betting parlors in New York, the largest market for parimutuel wagering in the United States, Advanced Monitoring Systems will provide "parallel" bet-processing networks that will subject wagering data to algorithms designed to issue alerts if payoffs or betting patterns stray from historical data, according to officials of the companies.

Monitoring systems like the one developed by Advanced Monitoring Systems have been supported by some racing regulators for several years, but the systems have yet to make much headway into the parimutuel market. Critics of Advanced Monitoring contend that the company has promised more than it can deliver to racing commissions and that the company's system will not make any measurable improvements to the bet-processing network. Supporters contend that the racing industry cannot convince its customers that the system is operating as designed unless a third-party company like Advanced Monitoring is monitoring the data flowing through the network.

Joe Mahoney, a spokesman for the racing and wagering board, said that the board is "confident that this is a step in the right direction" in attempting to ensure that the wagering pools are not being manipulated.

"The bottom line is that we think it will protect the betting public," Mahoney said. "We'll have information that we haven't had before."

Chris Scherf, the executive vice president of the Thoroughbred Racing Associations, said that the Advanced Monitoring method and others like it would not improve upon existing systems used by bet-processing companies and the TRA's investigative unit, the Thoroughbred Racing Protective Bureau. For several years, the protective bureau has been subjecting wagering data from its member tracks to similar analyses through its own proprietary system. As a result, Scherf said, independent monitoring systems would only duplicate existing processes at an additional cost.

"There isn't a system yet that exists to do what the racing commissions want the system to do, and that's to prevent manipulation from affecting existing pools," Scherf said. "The system does what we already do. It won't prevent anything or cancel anything. But it certainly seems to cost something."

Jeff True, the president of United Tote, said that he was "skeptical" that independent monitoring systems would improve the existing network.

"I think it's uncertain whether it will reveal any new insights," True said. "It may give us some comfort that the data is being looked at from another angle."

Lonny Powell, an adviser for Advanced Monitoring Systems who has been made presentations to racing commissions about the company's product, said that the system "is not a police force, and it doesn't make any emergency calls, but ultimately, it's there to protect the wagering public."