Updated on 09/16/2011 9:36AM

We've just seen tip of iceberg


WASHINGTON - Horseplayers worried about the implications of the Breeders' Cup pick six scandal were surely amazed by the comments of Lorne Weil, chairman of the company where the alleged fraud was perpetrated. "This matter has been resolved," he said, "before any damage has been done."

Oh, really?

Weil is the head of Scientific Games Corp., the parent company of Autotote, which processed wagers placed on the pick six at Arlington Park last Saturday. A mountain of circumstantial evidence had indicated that a bettor managed to enter a wager after four of the pick six races had been run, and the company acknowledged Thursday that a "rogue software engineer" was part of the coup.

The employee, who has been identified as Chris Harn, 29, exploited a weakness that had evidently existed for years in the system for processing the pick six. Wagers are not transmitted to the host track - in this case, Arlington - until four races are completed. During this crucial time Saturday, the data resided in the computers of Catskill Off-Track Betting Corp., whose wagers are processed by Autotote. The rogue employee, Weil acknowledged, "had a password into the system," and with it he was evidently able to alter the combinations that had been phoned into Catskill by Derrick Davis of Baltimore.

After the Breeders' Cup story made headlines from coast to coast, Autotote examined its records and identified the culprit. Weil said the wrongdoing was uncovered "thanks to procedures and warning signals built into the system. . . . The good news is that our detection system worked." He suggested that the detection system would have worked in any event, but that the procedure was merely hastened by the nationwide furor over the implausible Breeders' Cup bet. "The audit trail would have turned this up," he insisted.

Speaking on a telephone conference call for stock analysts and the media, Weil never directly addressed the question that every horseplayer in America, and everybody in the Thoroughbred industry, wants answered.

Although callers were invited to ask questions, the only ones the chairman took came from Wall Street analysts who lobbed him softballs. One of them began, "Lorne, we're with you! You'll get through this." Another analyst said, "Lorne, these were the days your mother warned you about. You should have gone to medical school." (Weil responded: "I can't stand the sight of blood.") No wonder Wall Street analysts have credibility problems these days.

I can't stand the sight of blood, either, particularly when it's my own, and I worry that my fellow bettors and I have been the ongoing victims of cheaters within the parimutuel business. The question I wanted to ask Weil in the conference call was this: How do you know this hasn't been going on for years?

If he responded with assurances that Autotote's "detection systems" would have caught the wrongdoer, I had my follow-up question ready: "Are you saying, Lorne, that this rogue employee knew all of the weak links in the processing of pick six bets? He knew how to crack into the system. He knew how to alter a bet that was already placed - something the tote companies had claimed was impossible. And yet he didn't know you had a detection system guaranteeing that he would be caught?"

Maybe I am just a typical, cynical gambler, but I doubt that the tote company would have detected any wrongdoing unless the crooked pick six play had already become a national scandal. The first reaction of people involved with taking the bet was to deny that anything was amiss - despite overwhelming evidence to the contrary. Donald Groth, the head of Catskill OTB, insisted that "everything . . . points to the legitimacy of this bet."

Brooks Pierce, president of Autotote, fatuously said it was a "good story" for the sport that a bettor had made a relatively small investment and made a $3 million score. Given such responses, were Autotote and Catskill OTB going to ferret out an illicit transaction and blow the whistle on themselves?

The whole tenor of Thursday's conference call was to reassure analysts and investors and thus protect Scientific Games' stock price. But if Autotote's brass believe that no damage has been done, they are totally out of touch with the business for which they process billions of dollars of wagers. I do not know a single horseplayer who thinks the Breeders' Cup scandal was an isolated incident of a sort that has never happened before and will never happen again. Most think this is the tip of an iceberg.

Some leaders of the racing industry do know they have a problem. "We believe we have a confidence issue to address," Tim Smith, commissioner of the National Thoroughbred Racing Association, acknowledged Friday. He said the NTRA had created a working group of wagering technology to establish "standards needed to insure customers of the integrity of the wagering process."

The industry had better act purposefully - and fast. Contrary to Weil's assurances, the Breeders' Cup Pick Six scandal has already done plenty of damage to the sport.

Copyright 2002 Washington Post