With more details on the Breeders' Cup Pick 6 ticket
scandal coming to light, the racing industry has shifted its efforts to
restore bettors' confidence into overdrive.
Just as quickly as the winning $3.1 million ticket
was announced over Breeders' Cup weekend, questions as to its legitimacy
were raised.
Officials with the OTB where the bet was placed,
along with the totalizator and tote operators, insisted there was little
chance that the betting system had been compromised by an outside hacker.
Now, less than a week after the race, and just days
after the case was cracked, massive reforms are underway.
Computer security experts admit that no system in the
world is truly 100 percent hacker-proof, and no one knows this more than
Scientific Games Corp.
The company, which is the parent to Autotote Systems
(the world's largest supplier of wagering systems and services to
racetracks and off-track facilities) and Autotote Enterprises (a
licensed pari-mutuel operator in Connecticut providing off-track venues
for patrons to watch horse racing and/or place bets), has unwittingly
been drug into the center of the controversy.
Chairman and CEO Lorne Weil said Thursday that an
internal investigation revealed that a "rogue" programmer employed by
the company manipulated the wagering system to create the winning ticket.
Pick 6 is a low-risk/high-reward bet won by picking
six consecutive winners. The Breeders' Cup Pick 6 is one of the most
popular around the world due to the race's global list of horses,
owners, jockeys and trainers.
Behind the scenes, Pick 6 bets are taken at OTBs and
trackside betting windows and stored in totalizator computers. To keep
the demand on track betting computers and servers to a minimum, Pick 6
wagers aren't transmitted into the bigger pari-mutuel betting pool until
after the fourth race of the day.
According to Weil, an audit and investigation of the
system "uncovered evidence of potential employee wrongdoing." He said it
appeared that, as believed, it was an "inside" hacker with knowledge of
the system. The employee was fired from his job on Thursday, and Weil
said the company and officials with the New York State Racing and
Wagering Board turned over evidence to the New York State Police for a
criminal investigation.
Weil wouldn't detail the steps taken by the
programmer, Chris Harn, who worked in the company's headquarters in
Delaware, but he did explain the basic idea behind the plan.
He said the Harn manipulated the bets while they were
resting in the totalizator system before being transmitted after the
fourth race. Once the winning horse had been picked for the first four
races, the "winning" ticket then bet the field for the last two races to
ensure the Pick 6 winner.
All six winning bets were contained on one $1,152
ticket that included one horse in each of the first four legs and every
horse in the final two legs. The bet was made in a $12 denomination, a
highly unusual amount.
Investigators said the bet was placed by Derrick
Davis, a 29-year-old self-employed computer technician who lives in
Maryland. According to the New York Times, Davis and Harn were
fraternity brothers at Drexel University in Philadelphia from 1992-'93.
Davis punched in the bet on a touch-tone response telephone system,
investigators said, through an account he had opened just a week earlier.
Investigators looked for evidence indicating that the
winning ticket was altered after four legs of the Pick 6 were already run.
Weil said that even without the initial public hype
surrounding the winning bet, his company's routine audit would have
caught the computer manipulation.
Changes in the System
On Saturday racing officials were already
recommending changes to the Pick 6 process to prevent similar situations
from arising in the future.
The United States' three-largest racing companies
were busy doing damage control together and released a joint statement
telling the betting public they weren't standing pat.
Churchill Downs, the New York Racing Association and
Magna Entertainment said they were implementing new "security measures"
in totalizator rooms at all their tracks.
They also said the companies' off-track betting sites
and account-wagering operations were being audited.
Tote rooms contain the computers and network
equipment that process wagers made at the tracks and at simulcast sites
around the country. The rooms are generally staffed by a combination of
both tote and racetrack employees.
Barry Schwartz, the chairman of NYRA, said the audits
would look at "everything and anything," including past Pick 6 wagers.
Together, Churchill, Magna and NYRA operate more than
20 racetracks that are responsible for more than two-thirds of the
national handle, including Belmont, Saratoga, Santa Anita, Hollywood
Park, Churchill Downs and Gulfstream.
According to racing officials, of increasing concern
to tote and security experts are so-called "scan bets," or wagers that
are not transmitted entirely into the pari-mutuel pools at the time the
bets are placed. The officials said scan bets are most susceptible to
tampering.
Scan bets can include the pick six, pick four, and
superfecta, according to tote officials. Information on scan bets is
transmitted twice: The amount of each wager is transmitted within
minutes of it being placed, but the identity of the horses used in the
bet is not transmitted until a later time.
Investigators believe that Harn may have been able to
alter a Pick 6 ticket after four races had already been run.
The security issues surrounding scan bets were not
well known in the racing industry until the Pick 6 investigation began.
Since then, the racing industry has struggled to answer bettors'
concerns about the integrity of the pari-mutuel pools.
In the Saturday release, Churchill, NYRA, and Magna
said the security audits would be performed in conjunction with the
three tote companies that serve all U.S. racetracks--Autotote, Amtote,
and United Tote.
The audits include background checks on all tote
employees, putting new restrictions in place on who can enter tote rooms
and checking to see if current internal controls that monitor who logs
onto the tote system are being properly maintained.
"We are taking these immediate steps to ensure the
security of our wagering systems and to eliminate any questions
concerning their integrity," said Tom Meeker, the president of Churchill
Downs, whose Arlington Park hosted the Breeders' Cup. "It is imperative
that we protect the interests of the customers that support our
industry. We will work diligently to maintain their confidence in the
pari-mutuel wagering system."
On Friday, the National Thoroughbred Racing
Association and Breeders' Cup, which merged last year, established a
task force to examine security issues. Churchill, NYRA and Magna
anticipate working with the task force.