01/17/2002 12:00AM

Software costs a concern


Officials of totalizator companies said Thursday that they will likely be able to accommodate 100 betting interests for a planned Breeders' Cup future wager this year. At the same time, the officials are uncertain how much the changes could cost, which could determine the feasibility of the new parimutuel wager, Breeders' Cup officials said.

The tote officials agreed during a conference call Thursday to submit detailed work orders to Breeders' Cup by Feb. 1 regarding the changes the companies would need to make to their systems, which can currently accommodate only 24 betting interests. The orders will also include estimates of the costs to perform the work, which would be billed to Breeders' Cup.

"I don't know if they are talking about $5,000 or $50,000," said Ken Kirchner, Breeders' Cup director of simulcasting. "Obviously, if the bids come back where it doesn't justify the return on the wager, then we are back to square one."

Modeling the bet roughly on the existing Kentucky Derby future wager, Breeders' Cup began exploring the idea of the 100-horse future bet late in 2001 after discovering that regulations in Illinois, where the Breeders' Cup will be held this year, at Arlington Park outside Chicago, allowed for types of wagers beyond the normal parimutuel menu. In addition to the future bet, which will likely be implemented for the Classic and Turf, Breeders' Cup is hoping to add head-to-head wagers to the eight event races.

Steve Sexton, the president of Arlington, said recently that the implementation of the new bets would be "fantastic" and a "great promotional boost to Arlington."

For the wagers to work, the three North American tote companies would have to make major changes to their software. Making the process more difficult is that each tote company would likely be on its own while developing solutions to the problems; the companies are extremely reluctant to share technology with each other.

Despite the difficulties, two tote companies executives said the modifications were plausible. The work would have to be completed within the next six months, the officials said.

"Preliminary indications are that, yes, we can do this, but I wouldn't say it's etched in stone quite yet," said Brooks Pierce, the president of Autotote. "There's some very significant work to be done."

Noting that the programming changes could lead to expanded proposition betting for other races and events, Kevin O'Keefe, the chief operating officer of United Tote, said tote companies had incentive to make the changes based on the potential for increases in wagering handle. The vast majority of tote company revenues are derived from handle-based fees.

"I think this could be one of the new great bets, and I think people are going to enjoy this, and that could mean incremental handle," O'Keefe said. "And that's the revenue engine that drives us, handle."

Kirchner said that if the tote companies could not make the changes, or if the modifications were too expensive, that Breeders' Cup would likely consider a future wager with 24 interests. The Kentucky Derby future wager allows betting on 24 entries, comprising 23 hand-picked horses and an entry including all other3-year-olds.

Tote companies had to modify their systems to take the Derby future wager when it was first implemented three years ago, but, unlike the Breeders' Cup changes, that work was done free of charge, Autotote's Pierce said. "I think the difference here is the scope of the work that needs to be done," Pierce said.