On Track - November

20 November 2002

The first of three men facing fraud chargers for tampering with computer systems to manipulate computerized bets on the Breeders' Cup pleaded guilty today to wire fraud conspiracy and money laundering conspiracy.

Chris Harn, of Newark, Del., implicated two co-defendants and former college fraternity brothers in saying he had "placed a bet and later modified it so it would win."

Harn was able to manipulate a Pick 6 wager, which entails the bettor choosing six consecutive winners by taking advantage of his access to the system as an employee of Autotote, the company that processes computerized bets on the Breeders' Cup and other races. Harn was fired from Autotote on Oct. 30.

As part of the plea, Harn acknowledged manipulating bets that won more than $100,000 on earlier races that served as a "dry run" for the Breeders' Cup bet and admitted working another scam through which he created duplicates of un-cashed winning tickets and collected the cash.

U.S. Magistrate Judge Lisa Margaret Smith said Harn could face up to 25 years in prison, but added that he and prosecutors have reached an understanding that would point to a much lighter sentence.

Harn was allowed to remain free on $200,000 bond pending his Feb. 19 sentencing. Smith said he could be ordered to make $280,000 in restitution.

His two co-defendants are both due back in court Dec. 11.

Autotote Adds Security Measures

Autotote will undergo additional changes to help ensure security of its tote system in the wake of the Breeders' Cup Ultra Pick 6 probe.

Within 30 days, the company will enlist independent third-party control systems for all of its pari-mutuel facilities in the United States. The group has also added Kroll Inc., a leading risk-mitigation and security company, to conduct a review of its risk profile. The review will include Autotote's information technology, physical security, operational controls, hiring practices and internal compliance.

Autotote has also created the new position of chief security officer. The CSO will report directly to Chairman and CEO Lorne Weil.

NYRA Changes Pick 6 Rules

On Friday, the New York Racing Association announced it will no longer allow Pick 6 players to make an alternate selection in case of a late scratch. Players who have picked a scratched horse will receive the betting favorite, NYRA officials said.

According to Bill Nader, an NYRA vice president, the use of alternates had to be cancelled to comply with the NTRA recommendation for Pick 6 bets. The NTRA recommendation was to ask sites to send information on live Pick 6 tickets into the national pool after each race if the bet was won. According to tote experts, tickets that had alternate selections were not being transmitted until all six races in the bet had been run.

California tracks also allow players to select alternate selections for the Pick 6. Rick Baedeker, the president of Hollywood Park, said on Friday that the issue of alternates "had not yet come up, but that does not mean it won't be something we'll have to address in the future."

Partial Agreement Reached in Canada

Racing officials agreed to reinstate superfecta wagering at Canadian racetracks on Monday.

The popular wager (in which a bettor tries to predict the top four finishers in a single race) was suspended by the Canadian Pari-Mutuel Agency, along with Pick 6 and Win 4 bets, earlier this week in response to the Breeders' Cup Pick 6 betting scandal in the United States.

However, Pick 6 and Win 4 bets will remain suspended in Canada while the pari-mutuel agency works with the U.S. National Thoroughbred Racetrack Association to develop a North American standard for multiple-race bets via tote networks.

The superfecta change was made at a meeting in Ottawa on Friday between representatives of the three North American tote companies, the Canadian Pari-Mutuel Agency and racetracks.

The meeting was prompted by complaints from Woodbine and other Canadian racetracks, which said they could lose up to $100 million in wagers because of the ban on multi-pick bets.

NTRA Asks Giuliani for Help

The National Thoroughbred Racing Association announced it will hire the consulting firm headed by former New York city mayor Rudolph Giuliani to oversee restoration of racing's image in the wake of the Pick 6 scandal.

The firm, Giuliani Partners, will make recommendations on how to upgrade the industry's communications and wagering systems and implement security procedures and controls.

The company will be involved in a comprehensive examination of Pick 4 and Pick 6 bets made in the past year.

Past Multi-Race Wagers Under Review

The Wagering Technology working group of the NTRA is planning a thorough review of winning multi-race wagers to find out whether the Pick 6 scandal was an isolated incident.

It is still unclear exactly how the review will take shape, but options include going over past Pick 4 and Pick 6 winners to look for questionable traits. Other suggestions include going over past winners that paid out more than $10,000 over the last two years.

GG-Media Boss Unhappy with attheraces

GG-Media chief executive Chris Palmer on Friday blasted attheraces as "underhand" after a stinging attack on the broadcaster for denying The Racing Channel coverage of Thursday's Hereford fixture.

The Racing Channel was persuaded to cut away from live racecourse pictures seconds before the first race after a telephone call from rival attheraces' chief executive Chris Stoddart.

The confusion, which arose because the Hereford fixture had been transferred from Towcester, to which GG-Media and The Racing Channel bought the rights, was believed to have cost the industry £31,000.

Youbet.com Institutes Fee-based service

Youbet.com, Inc. announced earlier this month that it would begin to charge some users for access to its site.

The decision was prompted by a study conducted by the Monitor Company, which showed that a number of customers use the Youbet Network for information and audiovisual services without placing significant wagers through the service. Within 30 days, the company said it will begin charging these users a subscription fee.

Youbet.com members were notified last week of the upcoming subscription plans scheduled for implementation Dec. 1, 2002. Users who do not use the network for wagering may choose either unlimited access (including unlimited audio/video) at $14.95 per month or a limited plan for $7.95 per month, which includes 10 hours of audio/video. Discounts are provided based on wagering activity, and fees are waived for high-end users.