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Pick six: A hacker's paradise?
NEW YORK - If someone wanted to manipulate the parimutuel pools in Thoroughbred racing, the bet of choice would be the pick six and it would be structured just like the Breeders' Cup ticket now under investigation by the New York State Racing and Wagering Board, racing and wagering experts said Tuesday.
The ticket, purchased for $1,152 through a phone account with Catskill Off-Track Betting on Saturday, used a single horse in each of the first four races in the pick six sequence. In the final two races, the ticket included every horse in the field. The bet was made in a $12 denomination, accounting for all six winning tickets, 108 of the 186 consolation tickets, and a $3 million payday that has been delayed pending the outcome of the investigation.
Although no hard evidence of wrongdoing has been uncovered, the incident has clearly struck a chord with many bettors whose confidence in the parimutuel system has been shaken. As a result, many racing officials are quietly urging the New York Racing and Wagering Board to call in experts in computer fraud from federal and state law-enforcement authorities to assist in the investigation, saying the reputation of the industry is at stake.
According to racing officials who spoke on the condition of anonymity, the New York Racing Association, which operates Aqueduct, Belmont, and Saratoga, has requested that the board also investigate two other pick six wagers that produced large payoffs to lone bettors, on Aug. 4 and Aug. 17 at Saratoga Race Course. The winning bets, which paid $330,389 and $421,988, respectively, were all placed through New York City Off-Track Betting Corporation, the officials said.
Stacy Clifford, a spokeswoman for the board, declined to comment on specifics of the investigation on Tuesday, but she said the board planned to contact "whoever can be of assistance."
Pick six data is routinely delayed
The pick six appears particularly vulnerable to computer manipulation because of the way data is transmitted from many different sources into commingled parimutuel pools. According to mutuel managers at prominent tracks, the information regarding the amounts of pick six wagers is transmitted the instant a wager is placed, but the actual structure of the bet, including the specific horses that are being used, is not transmitted until after the fourth race is run in the pick six sequence.
The data is not transmitted all at once because pick six wagers include so many potential combinations that the size of the computer files could create traffic problems in the sophisticated totalisator network that links tracks across the country and continually updates wagering information. Instead, only the complete information from tickets still "live" after four races is transmitted into the commingled pools before the fifth race.
Window of opportunity for fraud
According to some officials, the difference creates a window of opportunity - sometimes lasting up to 2 1/2 hours - in which data is being stored and when a computer expert or someone with access to the pools could manipulate specific bets. Since the actual numbers of the horses used in each bet do not have to be communicated to other sites until after the fourth race, the ideal way for a computer expert to rig a pick six bet at minimum cost would be to use the single-single-single-single-all-all ticket structure.
So when the winning Breeders' Cup pick six ticket came back too light, it instantly set off alarms.
"According to all the scam theorists I've talked to," said one official close to the investigation, "the money would go in at the right time, but the horses would not get selected until after the fourth leg has been run. That's exactly what we saw here."
Many racing officials doubt that the security of the pools are in danger, even if they acknowledge that the delay in transmitting pick six data represents a weakness in the system.
"It's not a weakness, per se, of the system if you can't hack into it, and there's no proof yet that the system has been hacked into," said Chris Scherf, the executive vice president of Thoroughbred Racing Associations, whose subsidiary, the Thoroughbred Racing and Protective Bureau, is assisting in the investigation. "But if you do have an instance in which the system has been hacked into, then you have a very, very big issue."
Donald Groth, the chairman of Catskill OTB, said on Monday that he believed the bets were legitimate. He said that the bets were placed by a 29-year-old man who lives in Baltimore. Groth, who confirmed that the bettor had opened the account just weeks before the Breeders' Cup and had placed no other bets through the account, would not divulge the bettor's name but agreed on Monday and Tuesday to pass a message to the bettor asking for comment. The bettor did not respond.
How secure are tote companies' systems?
Groth said on Tuesday that he still believed the bets were legitimate, but he joined a chorus of racing officials who called for an audit of totalizator providers.
"The tote companies are going to have to satisfy people that their systems are secure," Groth said.
Groth said Tuesday that investigators had not asked any questions yet concerning the possibility that the bettor was provided with inside assistance. He said that no one other than investigators for the New York wagering board have participated so far in the investigation.
One racing official who is assisting in the investigation said that it would be logical to take a closer look at the security of the totalizator system. The official cited concerns stretching back two years that some bettors were placing large wagers after races had started, leading to drops in odds after the gates had opened. Officials from the tote companies have denied that any past-post betting has occurred, attributing late odds changes to time-sensitive data being transmitted from far-flung sites.
"This has to be done now," said the racing official, referring to a review of the security for the tote system. "[The investigators] have to go in there and run the forensic tests and determine once and for all that someone is or isn't able to manipulate the data. They have no choice now."