Thoroughbred idea foundation Reports Wagering Insecurity

PUBLISHED: MAY 20, 2021

Patrick Cummings Executive Director, Thoroughbred Idea Foundation ContentS PART ONE 04 EXPECTATIONS

PART TWO 08 Intertwined

PART THREE 15 VOLPONI

PART FOUR 20 CONFIDENCE

PART FIVE 24 BINGO

PART SIX 29 PROOF

PART SEVEN 35 Z

PART EIGHT 38 DAMAGE

PART NINE 43 ALERTS

PART TEN 46 GREY

PART ELEVEN 51 Recommendations

PART TWELVE 61 PRAVDA 66 APPENDIX Part one EXPECTATIONS Integrity is essential in horse racing to give all participants confidence. Customer confidence is important for any business, but especially so when people are investing their money. Across the forthcoming installments of the “Wagering Insecurity” series, several unsettling perspectives are offered. TIF spoke with nearly 50 long-time current and former industry executives, regulators and officials from around the racing world, some for direct attribution and others on background, who shared their unease with the status quo. A common thread: the blame is shared.

Photo: Thoroughbred Idea Foundation

4 TIF REPORTS: WAGERING INSECURITY The poor state of wagering systems Horse racing is competing for customers, security and integrity measures is not the working to retain existing ones while trying fault of any one individual, group, regulator to attract and develop new ones, like any or corporation, it is how horse racing in business. Proper standards of integrity are North America has evolved. necessary. Wholesale improvements are needed. If Are racing’s customers, the bettors, we lift our standards, confidence will build, properly protected at present? participation will grow and racing’s future TIF believes the answer to that question will be more secure. is “no.” The security of racing’s wagering Participants across racing should have systems is not up to contemporary some basic expectations met. standards. The oversight of racing from Simply put, the competitions within stewards and regulators is not sufficient at racing should be fair and honest. Horses present for customers to have confidence should be free from any illegal performance in the legitimacy of results. enhancement. Jockeys should expect Both perspectives are addressed horses are sound, track surfaces are safe throughout the series. and stewards enforce rules consistently. When American racing fails its bettors Bettors should expect that jockeys give and stakeholders, it loses customers. In a horses their best chance to win, betting world where sports betting is available to information is accurate and that wagering almost half of the American population and systems are secure and do not advantage typically just involves downloading a mobile some customers over others. app, cheaper and better policed gambling Are we meeting these expectations? opportunities are easily found. This series delves into the integrity of Do participants in racing have confidence North American horse racing, specifically as in the outcomes on the track and through it relates to the $11 billion wagered through wagering? Right now? No. Could they? Yes, the pari-mutuel system, and the uncounted or at least far more so than exists now. billions wagered outside the purview of Confidence is good for business. North American racing regulators. who is betting what? Racing’s business statistics are deliberately opaque. There is no central office that tracks racing’s betting business and performance, a perpetual disservice to the sport’s stakeholders. Basic metrics on wagering would be helpful for many stakeholders in the sport but getting them is practically impossible. This lack of clarity has become increasingly problematic because the business changed fundamentally in the 1990s and the division of revenues from wagering did not keep pace. Handle shifted from on-track to off-track as full-card simulcasting and internet-enabled advanced deposit wagering (ADW) took hold. On-track betting revenues are often the most lucrative

5 TIF REPORTS: WAGERING INSECURITY for purses under current agreements largest registered ADWs, show that handle between bet-takers, tracks and horsemen. for the three largest ADWs in 2020 – TVG, It has declined while the ADW business has TwinSpires and Xpressbet – was more than grown in significance, with the pandemic- $6.2 billion. That includes all breeds and related closures turbocharging that growth, greyhound betting through those ADWs, accounting for an estimated $7 billion of not just U.S. Thoroughbred betting, though U.S. Thoroughbred racing handle last year. Thoroughbred racing does generate the Now, who is betting what, and through vast majority of total action. which channels? NYRABets, a fourth major ADW which When Equibase reported total wagering hubs some of its betting through Oregon, on U.S. racing in the pandemic-impacted reported handle of $225 million, but that 2020 was $10.92 billion, down less than 1% isn’t the entire picture as much of its handle from the previous year despite nearly ten comes from New York residents, which is months of racing without live attendance, not included in Oregon figures. The New that felt like a decent showing. York in-state numbers have not been made But total handle figures at a nationwide public. level, or even at the individual track level, What about the rest? do not offer much insight to the health of the business. They tell us very little. It is the composition of that handle which is a more meaningful measure, but such details are The Groups almost never available to anyone except the host track where the race occurs. Some came from on-track money from Citing total handle figures as a measure of January through early March when tracks performance should be viewed skeptically, were open. A small amount came from particularly by horsemen. tracks with live attendance after March. Where does handle come from? How Some came from smaller ADWs hubbed many individual customers are wagering? in North Dakota, where betting handle by How many new customers have been ADW is not made public. Some came from created, and how many are still betting? How Canadian customers. many customers are betting substantial But much of it came from groups like amounts over $10 million, $50 million, or Elite Turf Club, entities which TIF has called over $100 million annually? What is the “high-volume betting shops” (HVBS) in our effective takeout for customers of different previous white paper but are more formally ADWs? How much are purses earning from known within the industry as secondary different customer segments? pari-mutuel organizations (SPMOs). These Without centralized reporting of these groups are the biggest customers by handle, figures made available to all parties in the receive substantial rebates and have direct sport, it is almost impossible to know. access to pari-mutuel pools. Here is what we do know. In his 2016 book “The Perfect Bet,” author Reports from the Oregon Racing Adam Kucharski called it “scientific betting.” Commission, which serves as a hub for the “The techniques are now so effective –

6 TIF REPORTS: WAGERING INSECURITY and the wins so consistent – that teams… of millions annually. Their total handle is don’t celebrate when their predictions come unknown to the wider industry because it is good.” commingled with ADW betting. These groups participate at an institutional Bettors may not understand how the big level. They bet big because that is what the HVBS/SPMO groups operate and exactly math dictates. It is cold, calculated investing. what they are betting, but they can readily Kucharski continues: observe their impact on the game. “It’s not cheap to set up a scientific What horseplayer hasn’t watched as betting syndicate. To gather the necessary a horse that is last into the gate at 23-1, technology and expertise, not to mention breaks on top and is never headed, winning hone the prediction method and place the at a much-reduced 11-1? Horses routinely bets – costs most teams at least $1 million. enter the gate at 5-1, only to win at 5-2. Or in Because betting strategies are expensive to the last flash of a mandatory payout when run, teams in the United States often seek a bet of half a million dollars shows up in out racetracks that offer favorable gambling the pool? conditions.” These are discouraging experiences According to court filings from 2017, The for the people who cash a bet in those Stronach Group (now 1/ST) owns Elite Turf races and draws headshakes from many Club. others. For more than two decades, these Based on a variety of projections which incidents have plagued North American TIF has updated to account for 2020 figures, racing’s customers without any meaningful we estimate total betting from the HVBS/ attention or action from track operators. SPMOs was likely between 33% and 40% Perhaps their most noteworthy response of total U.S Thoroughbred handle, in the has been removing the odds from the vicinity of $4 billion out of the total $10.92 screen in the final seconds of loading billion. The reality could be higher or lower. through the first quarter-mile of a race so In 2003, they represented approximately the drops are less visible. In many cases, only 8% of total wagering. the big syndicates wagering hundreds of These groups might not be growing, millions annually through HVBS/SPMOs but rather they are representing a larger are the cause of such price crunches, percentage of wagering as mainstream degrading the experience for everyone else. horseplayers abandon racing, or shift The inability of regular horseplayers to more of their action to legal sports betting have any idea what price they are getting options. damages the product every day. Sports The majority of play from the HVBS/ betting customers know exactly what their SPMOs is not counted in the ADW figures. return will be if their bet wins. What was once Customers like those at Elite, and it is only a a harmful feature of pari-mutuel wagering few customers, place their bets directly into is now a huge competitive disadvantage. the pools, bypassing an ADW intermediary. Sports betting is growing at an explosive There are also smaller computerized rate with attractive betting offerings and robotic wagering groups which DO process widespread distribution. Operators are bets through ADWs, entities betting tens spending vast sums using bonuses and

7 TIF REPORTS: WAGERING INSECURITY promotions to acquire customers and are wagering moves online where revenues are embracing modern betting technology. undivided. Decoupling racing from slot and That is not bad news for racing companies casino revenues will likely increase. While all in the racing wagering space, like TVG and stakeholders in racing should undoubtedly TwinSpires, whose parent companies run pursue every funding source possible, sports betting businesses, but it is bad the single greatest, sustainable source of for those who depend on purses for their revenue for racing on the continent remains livelihoods. actual wagering on racing. For the last 25 years, as betting shifted There are avenues for improvement, online, purses in many North American but any efforts to attract new wagering on jurisdictions have been bolstered by racing will fall flat if the North American subsidies from additional gaming, be it slot racing industry fails to embrace integrity machines, video lottery terminals (VLT), across the sport – within its wagering historical horse racing (HHR) machines or systems, betting platforms and the running others. That era in American racing is far of the races themselves. closer to sunset than sunrise as casino Part TWO INTERTWINED Corruption resides at the intersection of significant financial gain and loose regulation. Purses boosted by subsidies from slots and other non-racing wagering present a robust opportunity for illicit activity but the sport’s regulatory structure has not kept pace, either with other racing jurisdictions around the world or modern sports. Jack Anderson (above, right), a leading global expert on sports integrity, was the keynote speaker at the University of Arizona’s Global Symposium on Racing in 2018, presenting “Integrity in the World of Commercial Sport.” Director of Sports Law at the University of Melbourne, he advises the Asian Racing Federation’s Council on Anti-Illegal Betting and Related Financial Crime (ARFCAIB), whose work will also be referenced later in this series, and is a current member of both the World Athletics Disciplinary Tribunal

8 TIF REPORTS: WAGERING INSECURITY and the International Tennis Federation’s Ethics Commission, among other roles. He spoke with TIF about the relationship between doping and other illegal activity to affect the outcomes of sporting events. “Effective doping control is of course a vital element of the integrity objectives of a sport such as racing but it should not be the sole integrity concern and should not be seen in isolation. “Doping in a sport such as racing is often intertwined with gambling interests, which in turn may be symptomatic of wider illicit or even criminal involvement in the sport. “Studies commissioned by racing regulators in Great Britain and Australia noted an immediate concern with levels of criminality in the sport, attracted to the money Jack Anderson

Photo: Alex Evers

9 TIF REPORTS: WAGERING INSECURITY and image laundering opportunities presented by the sport’s long association with gambling.” Anderson told TIF that doping and gambling often go together, and the presence of doping in a racing culture can be symptomatic of other issues. “The prevalence of doping in a racing jurisdiction may also be reflective of weaknesses in that racing organization’s race day operations such as: • stewarding and standards of veterinarian oversight, • Lack of capacity in intelligence gathering on and knowledge of industry participants • vulnerabilities in the licensing and registration of industry participants, and • the ability of the racing organization or jurisdiction to punish misconduct by industry participants.” There should be little need to explain the perception of doping in North America’s racing culture. While the sport is regulated, public confidence in the ability of regulators and their laboratories to catch cheaters is low. Have any doubt? How long did Jorge Navarro and Jason Servis win at unusually high rates never to be discovered by North American racing’s laboratory and regulatory structure but instead to be uncovered by a federal investigation? EXAMPLES OF RACE FIXING, ETC. Relatively few organized conspiracies race’s outcome. have been uncovered in American racing In October 2005, jockey Roberto Perez over the past 20 years. was suspended for seven years after Those that have been uncovered were placing superfecta bets on a race he rode mostly, though not entirely, the product and where his mount finished out of the of state or federal law enforcement work, first four placings. spurred into probing racing from other Jockey Ricardo Valdes was one of seven investigations rather than industry initiatives. jockeys barred by Tampa Bay Downs in Whether it is trainers and veterinarians December 2006, and was later indicted by illegally doping or jockeys manipulating the federal government in May 2009. He races, TIF found only occasional instances pleaded guilty to one count of attempt and of individuals identified and punished for conspiracy to commit mail fraud, with 18 attempting to profit via legal wagering other counts dropped, and was sentenced channels over this period. to just more than one year in prison, with In January 2005, 17 individuals including three years of supervised release, in April trainer Gregory Martin were indicted on a 2015. Two co-conspirators served longer host of counts including illegal gambling, jail terms as their criminal activities moved conspiracy and money laundering. The plot beyond horse racing and into influencing involved the “milkshaking” of at least one collegiate sport events. horse at Aqueduct in an attempt to fix the In July 2015, three jockeys were arrested

10 TIF REPORTS: WAGERING INSECURITY at Evangeline Downs in Louisiana after yielding these indictments, though the being accused of manipulating a race at the majority of the cases have yet to be tried as track a month earlier, and being caught with of April 2021. illegal electrical devices known as “buzzers.” Federal involvement also led to the Texas stewards, and local courts, caught conviction of veterinarian and trainer up with jockey Roman Chapa for a well- Alfredo Lichoa when he was sentenced in documented incident at Sam Houston February 2021 to three months in prison for Race Park a few months earlier regarding his role in a money laundering scam that buzzer use in January 2015, handing the involved a Florida-based horse owner and journeyman a five-year suspension and dirty money from Brazilian politics. $100,000 fine. He has since returned to As the site of these more recent incidents, riding. it is notable that Florida no longer has a Stewards at Canterbury Park in Minnesota racing commission. The sport is regulated suspended jockey Denny Velazquez for one by an amalgamation of house (racetrack year after finding a buzzer in his possession operator) rules and some state oversight in July 2020. on testing and licensing. Gulfstream Park has dealt with a few The indictments from these cases incidents that raised eyebrows, drew revealed no details regarding wagering on bettor complaints, and did yield some the horses or races involved. If racetracks or suspensions. Ray Paulick outlined those other groups have investigated suspicious in a January 2020 article which included wagering, the public is unaware of any a series of incidents, strange superfecta outcomes. The lack of transparency, of payouts and more. any public discourse on these matters, is Florida racing is highly de-regulated, with itself disconcerting. An opaque integrity individual tracks often controlling nearly all infrastructure is like having no integrity measures of oversight. infrastructure. Paulick wrote: “The track is under no obligation to notify the wagering public who is banned or suspended, for what reason, for how long, or MASOCHISTIC whether or not a suspension (made public or not) has been reduced in time… Jack Anderson’s remarks connecting “It is not the most transparent way of doping, wagering and other concerns are doing business and does not instill a great worthy of reiteration: deal of confidence in the wagering public.” “Doping in a sport such as racing is often The indictments that scooped Jorge intertwined with gambling interests, which Navarro and Jason Servis, among others, in turn may be symptomatic of wider illicit or were made public thanks to the eventual even criminal involvement in the sport... involvement of the U.S. criminal justice “The prevalence of doping in a racing system. Notably, private investigations jurisdiction may also be reflective of sponsored by The Jockey Club, among weaknesses in that racing organization’s other groups, were seemingly crucial to race day operations.”

11 TIF REPORTS: WAGERING INSECURITY The 2014 case of Masochistic offers Video of the race is damning for Berrio. insight to how doping and wagering can be Masochistic was under a stranglehold the intertwined. entire race, and Berrio never once asks the Masochistic debuted at Santa Anita on horse for an effort, cruising under the line in March 15, 2014 in a maiden race restricted fifth as the 8-1 fourth betting choice. to California-bred horses and the stewards’ On April 26, 2014, stewards held a hearing minutes, published by the California Horse and reported that Masochistic tested Racing Board, explain the rest. positive for the sedative acepromazine and “Jockey OMAR BERRIO…was in the office disqualified the horse from his fifth-place to review the ninth race from yesterday’s effort. card. At issue was his lack of effort on Seven days later, on May 3, Masochistic his mount, MASOCHISTIC, trained by A. appeared in an open maiden race at Churchill C. AVILA. There was no discussion of the Downs. The race was not just a class hike pertinent facts as a formal hearing will be from state-bred maidens to open maidens, set in the near future. The Board of Stewards but was the third race on the biggest day of was concerned that Mr. Berrio prevented his the year – Kentucky Derby day. horse from giving his best race. The horse It was fairly unusual for a horse trained was examined and tested post-race, and the by Avila to race in Kentucky. CHRB investigators were directed to look In the 10 years prior to this race, Avila into the matter.” trainees made nearly 1,400 starts and

Photo: Alex Evers

Masochistic

12 TIF REPORTS: WAGERING INSECURITY only six of those came in Kentucky, all in Masochistic’s rider that day, Omar Berrio, graded stakes races. Two of the six starts who is being investigated by the California came on Kentucky Derby Day in 2005, Horse Racing Board for lack of effort in the when Oceanus finished ninth in the Grade March 15 race… 2 Churchill Downs Handicap at 60-1 and “Despite the disqualification and the rider Santa Candida was eighth at 24-1 in the investigation in California, Masochistic was Grade 1 Humana Distaff Handicap. allowed to be entered at Churchill in the May Omar Berrio rode both. 3 maiden race. Horse racing is regulated Masochistic’s maiden race was the only from state to state. horse Avila was saddling at Churchill on May “Bonnie believes the May 3 race won by 3rd and he legged-up that day’s eventual Masochistic should be investigated closely, Derby winning jockey, Victor Espinoza. particularly wagering associated with the The race jumped at 11:33 A.M. Eastern race, because Churchill may have been used time, with total intra and inter-race wagering to carry out a betting coup. The thinking is pools of more than $3.7 million. Masochistic that with larger than usual purses on Derby went straight to the lead and never looked day, large wagers would not catch as much back, winning by 14 lengths. Despite the attention and the larger pools would help shift from state-bred maidens to open ensure higher odds. maidens, Masochistic was dispatched a “Kentucky Horse Racing Commissioner solid 2-1 favorite. Dr. J. David Richardson said because the Some 10 days later, the late Ned Bonnie, horse ran legitimately in Kentucky and then a Kentucky Horse Racing Commission any concerns about his effort occurred in member, thought a betting coup was California, it was up to the CHRB to conduct perpetrated on Derby Day. the investigation. Frank Angst from the Bloodhorse details “We’re not in California, and we’re not in the rest: Kansas,’ Richardson said to Bonnie… “Bonnie, who consistently reminds other “Kentucky Horse Racing Commission commissioners that the betting windows supervisor of pari-mutuel wagering Greg can provide a bigger prize than a purse for Lamb said Kentucky has previously worked nefarious horsemen, said the state needs to with other regulators and has provided bring in outside help to investigate events wagering information as needed. After the surrounding the maiden win of Masochistic… meeting, Lamb provided a spreadsheet that “While that race may have been run showed $3,741,395.97 was wagered on the squarely, Bonnie believes the betting public May 3 race at Churchill. was duped by a program line that didn’t “The most money wagered on the third provide the whole story with its “fifth by 4 1/4 race May 3 at Churchill was the $545,292.50 lengths” in Masochistic’s March 15 debut at sent in on-track. The other four outlets with Santa Anita Park. more than $100,000 wagered were advance- “Importantly, the comment line noted a deposit wagering outlets TwinSpires.com, disqualification but there was no room for TVG.com, XpressBet.com, and Churchill the reason for the DQ—a failed drug test. Downs-owned Isle of Man-based rebate It did not note a follow-up investigation of shop Velocity Wagering.”

13 TIF REPORTS: WAGERING INSECURITY Nearly a year after Masochistic’s sedated for a banned steroid and was disqualified. debut, the California Horse Racing Board As the back-and-forth at the Kentucky suspended Avila for 60 days and fined him Horse Racing Commission exhibited, state- $10,000, the maximum allowed under the by-state finger-pointing is of no benefit for rules of the state. Berrio’s ride in the race the bettors, who surely took the brunt of is never referenced again in any other the incident on both days. While horsemen CHRB report, and in March 2021, a CHRB have recourse as purses are re-distributed spokesperson confirmed to TIF that no following positive tests, bettors have none. complaint was ever filed against him for In this case there was active, visible the ride. oversight. There were meaningful Masochistic went on to become a Grade investigations. But due to a variety of 1 winner for a different trainer and was factors, those measures failed. Instead, the center of controversy after the 2016 it showed the inherent impracticality of Breeders’ Cup Sprint, a race where he relying on state regulation of what has finished a close second, but tested positive become a national business.

Photo: Breeders’ Cup Limited ©

14 TIF REPORTS: WAGERING INSECURITY Part THREE VOLPONI The major North American tracks, which Analysis and Security Platform (WASP). are now vertically integrated companies According to its website, the TRPB controlling most of the major ADWs, tote says: “this platform currently provides companies, other service providers and each Thoroughbred Racing Associations’ even some of the high-volume betting shops member track officials with a robust integrity like Elite Turf Club, have had little incentive toolset for distributed betting networks. A to upgrade the oversight of wagering on the variety of reports and modules are included more than 30,000 annual Thoroughbred which assist users with timely examination races on the continent. of wagering detail.” The one entity which does offer some This description suggests the tracks are wagering security apparatus – the mostly responsible for monitoring WASP Thoroughbred Racing Protective Bureau themselves. (TRPB) – is a wholly-owned subsidiary When TIF questioned a TRPB official in of the tracks themselves, through the mid-2020 about a curiously low superfecta Thoroughbred Racing Associations of payoff, it was affirmed that the organization North America (TRA), a consortium of does not respond to individual questions racetracks. about incidents, but only those raised by Despite several attempts from TIF, the member tracks. If we wanted more insight, TRPB’s Executive Vice President Curtis we would have to contact the track directly. Linnell declined to answer questions for The burden of dealing with a customer this series. inquiry is on the racetrack. What was once a robust organization, North American racing does not have even called horse racing’s own “little FBI,” is independent oversight of betting or now a shell of itself, focused primarily on wagering systems. The lone protection the microchipping of horses. comes from a small office wholly-owned The headline of a 1960 piece in Sports by the tracks, which gives them tools to Illustrated may offer that generation’s monitor their own races. perspective of where racing stood relative This was not the plan when many in to security and integrity measures: and out of racing recognized the need for “The Best-Policed Sport of All.” radically improved wagering oversight in Today, the TRPB does offer its member the early 2000s. tracks a tool known as the Wagering

15 TIF REPORTS: WAGERING INSECURITY single winners of the first four races with all FIX SIX GROUND horses used in the last two legs. The delays in ticket data transmission enabled Harn to change the four singles to the winners of ZERO FOR the first four races. It was later uncovered the $12 base play was a mistake. Before the perpetrators were caught, the total winnings RESET would have exceeded $3.1 million – but Breeders’ Cup officials froze the payouts In the years before and since, tote security after astute horseplayers cried foul. has been a looming concern for racing after It was later revealed Harn, along with the “Fix Six” scandal was exposed in the conspirators and college buddies Glen aftermath of the 2002 Breeders’ Cup. DaSilva and Derrick Davis, executed the Natalie Voss, Editor-in-chief of Paulick fraud just weeks before the Breeders’ Cup Report, offers a full review of the incident. to test their processes, landing a pick four In brief, Autotote employee Christopher at Balmoral Park for over $1,800 and then Harn, who had knowledge of the bet more than $105,000 in a pick six at Belmont processing function of the pick six and Park a few days later. access to the system, altered tickets to Steven Crist, former New York Racing guarantee a win after the first four legs of Association executive, as well as a former the Breeders’ Cup pick six, which had a pool publisher of the Daily Racing Form, noted of more than $4.5 million that year. Specific in the Fix Six aftermath that one long-time pick six ticket details were only transmitted pari-mutuel operations expert recalled a to the host site after the first four legs of spate of incidents similar to the Fix Six had the bet to limit the burden of too much been uncovered years earlier, but whatever transaction information going through the the weaknesses that enabled them then tote system. had been addressed, though without much While processing power in many other public awareness. technological uses has improved since Crist wrote just after the incident: then, racing’s tote systems have not evolved at the same speed. The full plot was uncovered easily in the days after the race. The longshot outcomes It sure seems that of the sequence, capped by Volponi’s the loophole has improbable 43-1 Classic win, helped expose the fraudulent play as the only winning been reopened, and ticket, played through a Catskill OTB outlet in New York and was entered as a lone, $12- now every customer base bet, the equivalent of six individual $2 is understandably tickets. The winning combination had the four nervous, too.

16 TIF REPORTS: WAGERING INSECURITY “Well, over the next 48 hours, the OTBs and tote companies were just lying, and FEIGNED eventually it was all exposed. CONCERN Horseplayers’ justifiable anger around It was such a perfect the lack of security at the time was further illustration of how stoked as OTB and tote executives originally defended the outcome, suggesting there wagering had just had been no impropriety. Crist wrote: totally gotten past the “Breeders’ Cup and the National racing establishment. Thoroughbred Racing Association acted with commendable speed and clarity, Just weeks after the incident, a survey of freezing the payout and demanding an 300 horseplayers conducted by Hollywood investigation by the New York State Racing Park, reported at a November 2002 and Wagering Board. Officials of Catskill California Horse Racing Board meeting, OTB and the totalizator companies AmTote showed 68% of the surveyed believe “it was and Autotote immediately tried to make the likely that fraudulent bets could be made story go away, defending the winning ticket after the start of the race” while overall, 69% as an authentic stroke of good fortune while “express a lack of confidence in the tote insisting their systems are impenetrable. system.” “Their lack of even feigned concern It will be notable later in this series about the situation or respect for a serious that in that same California meeting, investigation only raised more flags.“Then commissioners asked Autotote president three days after Brooks Pierce, the president Brooks Pierce if he had “any evidence of Autotote, said that the winning ticket was whatsoever in California or anywhere else legitimate and actually ‘good for racing,’ that anybody is able to bet” after the start Autotote announced it had fired a ‘rogue of a race. software engineer’ who ‘had the ability to Pierce confirmed he had none. alter the ticket.’ Harn was fired by Autotote days after Reached in March 2021, Crist reflected the fraud was eventually discovered. A on the ridiculous reactions from those who Washington Post article captured the originally were defending the results as remarks of Lorne Weil, then chairman legitimate. and chief executive of Autotote’s parent “Once the longshots came in, you just company Scientific Games, the same day knew the bet wasn’t going to be hit. So, of Harn’s ousting. when the details of the winning tickets were “Weil…had praised his company’s released, anyone who knew anything about ‘detection system.’… betting races knew something was off. ‘The good news, if there is any, is our

17 TIF REPORTS: WAGERING INSECURITY detection system worked the way it should changed, making it harder to police. About have,’ Weil said in a conference call. ‘No 85 percent of the $14.5 billion in bets on money was paid or changed hands.’” thoroughbred races last year [2001] were “During the call, Weil said Autotote’s made somewhere other than where the detection system would have red flagged races were run… the alleged alterations to [the Fix Six] bet “A major heist involving the computers even if they had not raised suspicions.” that store and sort the wagers seemed, well, Weil’s praise for Autotote’s own inevitable... monitoring, however, was premature. “That’s one reason the protective bureau His remarks came before it was known has been spending more time studying the Harn and his conspirators had changed industry’s interlocking computer networks tickets in a similar fashion earlier the same and the ‘tote’ companies that run them. month without detection at both Balmoral “The agency convened a meeting a few and Belmont, netting over $107,000. years ago to give the totes - who aren’t Weil and Brooks Pierce are still working members of the Thoroughbred Racing together through British-based Inspired Associations - a list of ‘points of vulnerability,’ Entertainment. including the forgery of betting tickets, a time-honored scam also linked to the Breeders’ Cup scandal. “They all acknowledged the problem, but A PERIOD OF said it was too expensive to fix,’ Berube said of the tote companies. In 2021, Berube clarified to TIF that the TRANSITION “too expensive to fix” adjustment was: “…centered on a flaw in outs book Where was the TRPB? Was anyone procedures [the process of clearing monitoring the pools or these risks? previously uncashed winning tickets after In 2002, the TRPB was in a period of a period of time, normally months] that had transition. been exploited by insiders to cash before The Baltimore Sun’s Jon Morgan profiled those winning bets reverted to the state.” then TRPB President Paul Berube less than The Fix Six scammers, led by Harn, were two months after the Fix Six. He offered involved, along with others, in the uncashed insight that the control over wagering tickets scheme too. security was not what it once was, a The tote companies had avoided function of the growth of the internet and stringent monitoring. This remains the simulcasting. norm. Most businesses prefer saving the “Berube, president of the Thoroughbred cost of extra oversight. But that does not Racing Protective Bureau, has watched mean that businesses should dictate their as the sport burst in a few decades from own oversight requirements, or that what the confines of racetracks to the nearly amounts to self-regulation is akin to an ungovernable realm of cyberspace… acceptable standard of regulation. “Berube acknowledges the business has The industry was well-aware of the

18 TIF REPORTS: WAGERING INSECURITY vulnerabilities which led to the Fix Six. had only nine full-time agents assigned Steve Crist’s allusion to previous loopholes to 13 thoroughbred tracks - though they –insecurities – from well before the Fix Six help coordinate security with the other 30 were known to the TRPB. member tracks. The Morgan article continues: “The role of the protective bureau has been “As recently as September [2002, a ‘minimized,’ [now Thoroughbred Horsemen’s month before the Fix Six], Berube had a Association chief executive Alan] Foreman conversation with someone regarding the said. ‘The nature of the industry and business possibility of hackers altering bets after a have changed and a number of tracks have race had been run - especially on bets that found it more cost-effective to do that work require the gambler to predict in advance the themselves.” outcome of several races. Not surprisingly, cost savings did not “The reason: Data on such bets are stored equate to better protections. in computers until after most of the races have been run and then are ‘scanned’ and forwarded to a central hub.” Berube’s 2021 clarification to this portion DEGRADATION of Morgan’s 2002 story is noteworthy. “My September 2002 meeting was at Paul Berube affirmed the degradation of the TRA’s annual simulcasting conference, the role of the TRPB over these years in his and was with a well-placed tote company 2021 conversation with TIF. representative who was asked, by me, what “It was an erosion, over time, and it came it would take to ‘create’ winning pick six down to commitment and the perception of tickets after the entire sequence of races.” need. The tote representative told Berube all it “Changes in ownership of racetracks would take is a program and a programmer from privately-held [tracks] to corporate – less than two months before that actually conglomerates brought about different happened on the sport’s biggest stage. thinking on security measures. Lost in But for years, the TRPB’s functions were the ownership changes was first-hand being trimmed back, with rising costs for knowledge and appreciation of the TRPB’s placing TRPB agents at tracks cited as the history. The expansion of simulcasting reasoning. Morgan’s article captured the added to the changes that have occurred. transition: “Even though 90% of all wagering dollars “Tracks complained about the cost come from off-track, that has not and will of the protective bureau, and in 1995 never change the fact that the races being the Thoroughbred Racing Association wagered upon still occur at a hardscape restructured. Each member track was facility and where essential participants allowed to either pay to have [a TRPB] agent are located. In short, racing still needs on site or to provide its own security in a investigative eyeballs on the actual race cooperative arrangement… event even though less money is being “Many tracks opted out, and, as of the wagered at the live venue.” end of last year, the protective bureau So how will racing integrity oversight

19 TIF REPORTS: WAGERING INSECURITY exist going forward? integrity. Incidents or suspicious findings Berube notes that any effort must be a are almost never publicized, if they were nationwide one. triggered at all. “Today, there is no national unity, but in the In 2021, Steve Crist scoffed at the TRPB heyday of the TRPB, that was our strength. arrangements, both at the time of the Fix So many investigations went across a wide Six and now. span of states. Today, I don’t know how you “The TRPB was like some warm blanket would do it without some uniform group.” the industry would toss on these things in Around the time of the Fix Six scandal, some attempt to reassure horseplayers Berube notes that the TRPB was looking that they were looking into it. But there was to hire a knowledgeable resource for the almost no sort of visibility or presence on TRPB in pari-mutuel operations and was any modern wagering incident.” recommended to consider Curtis Linnell, Massive improvements were needed now Executive Vice President of the in wagering security as racing became organization some 19 years later. an increasingly off-track, online betting “Best hire I ever made,” Berube told TIF. business. The Breeders’ Cup Fix Six proved But as corporate control of American the need to just about everyone. tracks concentrated even further, the In its aftermath, the industry started TRPB’s influence and its role as an agent talking, planning and spending – millions – of the TRA, a consortium of those same to build a modern oversight arm. It was a tracks, waned as it relates to wagering total failure. Part FOUR CONFIDENCE The Breeders’ Cup Fix Six rocked North American racing. In response, the National Thoroughbred Racing Association (NTRA) launched the Wagering Integrity Alliance and a separate entity, the Wagering Technology Working Group (WTWG). In August 2003, a report published by the WTWG, in concert with the NTRA’s security consultants, recommended three “primary measures”: • Create the National Office of Wagering Security, • Establish uniform, minimum security standards for wagering systems, • Enhance the technology infrastructure of wagering systems to enable additional cyber- security measures. The report was released in advance of that year’s annual Jockey Club Round Table (full transcript).

20 TIF REPORTS: WAGERING INSECURITY Jim Quinn was the horseplayer unacceptably lengthy intervals after the representative in the WTWG that assembled horses have left the starting gates, would be the report and highlighted the interests of eliminated, or effectively mitigated. horseplayers emerging from the Fix Six: “Three, the players demanded to know, “In regard to reform, what did the players what is the scope of the problem, or how want? Three things, primarily: long has this been going on?” “One, the transmission of all wagering Greg Avioli, then chief operating officer data from the simulcast outlets and hubs to of the NTRA, recognized the need for a the commingled pools should be state of the national response: art, that is, as good as it gets. “A national office is our best means “Two, as soon as possible, technology for detecting and responding to potential upgrades must be implemented, so that security threats across multiple jurisdictions the late mergers of simulcast pools that or tote systems.” cause the suspicious drops in the odds for Roger Licht, then chairman of the

21 TIF REPORTS: WAGERING INSECURITY California Horse Racing Board, offered a regulatory perspective: ORGANIZED “Perception is often more important than reality. The perception is that people are betting after the commencement of a race. OVERSIGHT “From what we have learned to date, that is not reality, but unless we upgrade our tote systems, we’ll continue to have disgruntled FAILED SLOWLY horseplayers who feel that the odds on the winner – especially when we bet on him – Financial reports from the time show are dropping after the commencement of a the NTRA spent almost $3 million on race. consultative work to form and launch the “Let’s change that perception – as fast as Wagering Integrity Alliance and a national we can.” office after the Fix Six through 2003. Rudolph Giuliani, the former New York Sharon O’Bryan, the initial Alliance City mayor hired as an NTRA consultant director hired by the NTRA, turned-down the through his firm Giuliani Partners, said: post one week before she was supposed to “The idea of a wagering security office is start. An interim director, Isidore Sobkowski, very, very important. was hired a month later. But the project “The only way in which you can assure languished and NTRA annual reports yourselves and assure the public that there’s from this period serve as reminders of the a standard of integrity necessary for people to shifting interests of the time. continue to invest in this sport in all different The Wagering Integrity Aliance became ways is to centralize the data and to have an the National Office of Wagering Security office that focuses on accomplishing that but was soon rebranded as the Office of mission and then making certain with tests Racing Integrity (ORI). In its 2005 year-end along the way that integrity is maintained.” publication, the NTRA indicated the ORI Horseplayers in 2021 will be nodding would be functional by the end of 2006. their heads in agreement with all of these In December 2005, Craig Fravel, then in takes relative to betting on racing in North the midst of a 20-year leadership role with America 18 years after they were first Del Mar, highlighted the tough position of shared. That should serve as a significant track operators being the only responsible indictment. entity for wagering integrity, with help from Given the state of affairs at the time, the the shrinking TRPB. move to create the national office was met After outlining a suspicious wagering with optimism. outcome raised by a customer which he Horse racing’s wagering business was investigated with TRPB help, Fravel told changing. Bettors’ perception was poor. The an audience of industry professionals at Fix Six scandal undermined confidence and the University of Arizona’s symposium that discredited whatever controls the industry self-oversight was not enough. thought it had in place. “I think to allow customers to have It did not go as planned. sufficient levels of confidence in us, we

22 TIF REPORTS: WAGERING INSECURITY have to demonstrate that not only are we spending fell to just $28,531 in 2006 and capable of reviewing things, but that there is $125,040 in 2007, about $1.8 million less a sufficiently independent and authoritative than projected spending announced 18 organization out there that can be the months earlier. ultimate arbiter of those kind of decisions. The NTRA reported the ORI mission “And to a degree track management was to take “a lead role in the Wagering does have a vested interest in making sure Transmission Protocol project to improve that, [not only are we] at least portraying the technological infrastructure of the pari- the game as on the up and up, but we are a mutuel wagering system.” little suspect simply because we are maybe By 2008, ORI was gone and the hope overly confident at times, and I think the of independent oversight of wagering was Breeders’ Cup Pick-6 scandal was a classic fading. case of that. In December 2008, three executives “I had said for years that, upon from different spheres of the business representations by various tote companies, addressed the topic of wagering security in there’s no way anybody could get in and Arizona. All three abandoned their work in manipulate the mutuel pools. racing soon thereafter. “Well, in 2002 we found out that that was absolutely untrue and I had been told for years that there was no way that anybody could do past posting and found out about six months after that, that somebody was past posting in New York.” Self-oversight remains the status quo and is insufficient for the modern gambling marketplace in 2021. Despite the initial impetus to promote wagering security, the national initiative floundered. After spending nearly $3 million in its first two years, NTRA outlays on wagering security initiatives dropped to just $1.1 million across 2004 and 2005 combined. The NTRA’s five-year strategic plan for 2006-2010, published in June 2005, indicated the NTRA was budgeting $1 million annually for each of the next five years to support the Photo: Alex Evers Office of Racing Integrity. Instead, Former Del Mar President Craig Fravel

23 TIF REPORTS: WAGERING INSECURITY Part FIVE Bingo The NTRA-led initiative to bring wagering integrity to North American racing had failed. Independent oversight was falling apart. The frustration was palpable in December 2008. The University of Arizona Racing Symposium (click here to read the full transcript) convened a panel to discuss the state of these initiatives. Paul Bowlinger, a long-time horseplayer, attorney, former regulator and then the executive vice president for the Association of Racing Commissioners International (ARCI) found it Shakespearian.

24 TIF REPORTS: WAGERING INSECURITY “…The real genius of that soliloquy of “I owned a nightclub for a long time Hamlet is not ‘to be or not to be,’ whether and I would not possibly think of ignoring that is the question. He goes on to say, ‘To my actual customers. Racing is run as if die, to sleep, perchance to dream, aye, there its betting customers don’t exist. I would is the rub, for in that sleep what dreams may not walk into my club and not notice my come?’ customers. “Because what Hamlet is really quite “Instead, racing goes to its distributors simply saying is, what we may discover is and asks them how they are doing. It’s a scarier than what we already know.” remarkable way of doing business.” Later in the session, Bowlinger highlighted Bowlinger left ARCI in 2010, returned to that the complexities of the industry, private law practice and has been out of the compounded by other issues, distracted racing business ever since. the evolution of integrity measures. At the time of the 2008 Arizona “…We no longer have to dream about Symposium, Bowlinger’s fellow panelist what’s on the other side of an unmonitored Isidore Sobkowski had been out of the pari-mutuel pool… NTRA’s Office of Racing Integrity for several “The second part in that soliloquy is, years and was running his own company, ‘Whether tis nobler in mind to suffer the Advanced Monitoring Systems (AMS), slings and arrows of outrageous fortune,’ described by Bowlinger in the session and what has bothered me is that since as “specifically created to meet the pari- 2002, the Pick-6 scandal, it was the topic du mutuel industry’s need for cyber security of jour, it was the topic du everything. wagering pools and wagering accounts.” “Now granted, there have been other Sobkowski lamented the lack of issues that have taken our time, medication accomplishments to that point. issues, the tragic Eight Belles, Barbaro, the steroid issues, they’ve all come into place and they’ve diverted our attention and rightfully so in many ways. There’s a lot “But I think our betting public is fed up with taking the slings and arrows of outrageous fortune.” of talk about When TIF reached him in February 2021, Bowlinger’s recollection of the time was wagering unchanged. “The industry’s complete lack of interest integrity but was so frustrating. “We met with everyone, tried to make it so far I think work and we had all the numbers in place for it to work. All of the executives started out precious little by saying ‘yes, yes, yes,’ and when it came down to executing, they ended up saying ‘no, no, no.’ has been done.

25 TIF REPORTS: WAGERING INSECURITY without controversy. WITHOUT “The only aspect about testing of gaming equipment that is controversial is if someone suggests that it is not needed… CONTROVERSY “Automated bingo card devices in church basements have more independent Kevin Mullally provided an external monitoring than the tote systems.” perspective. After 12 years with the Ironically, Mullally added, the primary Missouri Gaming Commission, Mullally source of new money to the racing was early in his career with Gaming business – subsidies via slot machines, Laboratories International (GLI) as Director video lottery terminals and historical horse of Government Relations and General racing (HHR) machines (slot machine-like Counsel. He had recently served as Vice devices driven internally by race results) – President of the North American Gaming are all substantially more controlled than Regulators Association (NAGRA). Given his the billions going through the tote system. broad experience in gaming regulation, he “Historical horse racing machines have used his time at the 2008 panel to express similar levels of controls and oversight as his bewilderment at how racing could be any casino or lottery-style machines. Tote such an outlier regarding its regulation of systems that have been used in America technology. lack the clear lines of accountability and “This is my third consecutive conference. defined processes to independently validate “I came here two years ago to learn a little the technology. Moreover, they lack proper bit more about why the racing industry had safeguards to independently investigate managed to be the only component of the a malfunction, or investigate attempts to gaming industry that had not implemented compromise the system. The message has any serious oversight to its technology.” always been, ‘we can do better.’” TIF contacted Mullally in March 2021 Tote operators, not so much. and his views were unchanged and now Mullally’s position from outside racing augmented by the new forms of gaming was affirmed by one active racing executive technology which have entered the market, whose role includes managing wagering, each aligned to a set of technical standards but asked not to be named because of that are independently tested under the ongoing relationships with tote companies. authority of their regulators. Racing’s That executive told TIF in early 2021 that controls fall farther behind. AmTote, which was reported to process “If you were to put me on a panel today, about 80% of North America’s pari-mutuel 13 years later, I’d say the exact same thing. bets, has consistently disappointed his “The only difference is that the tote track: systems stand out even more given how “They have not met our expectations on technology in the rest of the gaming industry tote processing innovations and it has long has evolved. Testing is not only ubiquitous seemed like they are not receiving the cash in every other sector of gaming but is also needed to evolve or innovate in racing. If anything, they have given the impression

26 TIF REPORTS: WAGERING INSECURITY most of their team was working on their “We are a vendor. We compete in a free historical horse racing technology.” market and we’ve got a good system. I That technology powers the slot-like understand TRA [Scherf’s employer, funded devices used to subsidize racing in states by the consortium of track owners] has a including Arkansas, Kentucky and Virginia. system as well, we’d love to go ahead and compete against you, love to go ahead and partner with you. “We’re looking for an industry solution MONITORING here, we’re not looking for any kind of unfair monopoly or any kind of unfair advantage.” Back in the 2008 panel, Bowlinger, Earlier in his main remarks, Sobkowski Sobkowski and Mullally were all bearish on struck hard at the racing industry’s the state of wagering integrity and did not overwhelming reluctance. hold back. “I just want to say that the industry has In the session’s Q&A period, Chris had some pretty significant push-back to the Scherf, long-time Executive Director of things that we’re doing as a company. the Thoroughbred Racing Associations “I’ve been told, for example, that our of North America, the owner of the TRPB, system is too simplistic. I’ve been told that publicly contested Sobkowski’s monitoring our system is too sophisticated. I’ve been business, challenging the underlying told that our system works too well and we technology and claiming it insufficient to don’t need it. I’ve been told that our system meet industry needs. doesn’t work at all and why bother? “I think it vastly overpromises.” “But what I’ve really been told over and By this point, Scherf had almost two over is that someone has to pay for this and decades of experience working with the tote the industry doesn’t want to pay for it.” companies and noted that the technological infrastructure that was required to institute independent monitoring was not possible given the rather sorry state of technology A DEAD RAT on the part of the tote companies. Reached in March 2021, Scherf made it In 2009, the Indiana Horse Racing clearer. Commission (IHRC) decided to move “You haven’t had an adventure in life until forward with Sobkowski’s firm, AMS, you’ve tried to get tote companies to do declaring itself the first state in America to something in concert. I found quickly that institute real-time, independently monitored when you get them all into a room, everyone pari-mutuel wagering. was in favor of uniformity and the definition Joe Gorajec was Executive Director of the of uniformity was everyone doing it ‘my’ IHRC for 25 years, and pulled no punches in way.” 2021 when assessing the state of wagering The Scherf challenge in 2008 was an integrity in America, suggesting little, if engagement familiar to Sobkowski, who anything, has been done in the almost two had heard the hemming and hawing before. decades that have gone by since the Fix Six

27 TIF REPORTS: WAGERING INSECURITY exists, but one long-time tote executive told TIF the technology is so limited, monitoring to meet the rule can only take place on live, in-person betting at the host track. Thus, actual monitoring only occurs on just a sliver of total betting. Widespread independent monitoring

Photo: Istock across the tote landscape never actually materialized in any state, from AMS or The state flag of Indiana another firm. Though formal explanations scandal. He told TIF: are impossible to find, TIF learned from “Most racetrack operators would rather multiple individuals that the protocols which have a dead rat in their mouth than expose govern the tote system are so antiquated or take action on any wagering malfeasance that betting details from the tote companies that occurred on their races. could never get to the monitoring groups in “If there is a system in place, today, formats that would enable transaction-level that is for racetracks to use to monitor live oversight. Investment to upgrade systems betting, then the tracks should be reporting to enable such transmissions have not been the results to the public. The reports should made. These protocols remain in place indicate exactly the problem that occurred, today. here’s what was done about it and what steps At present, two of the three main tote are being taken to ensure it does not happen companies serving North America are owned again. by major racing corporations, each of which “You almost never hear that, ever, from also own racetracks, ADWs, high volume anyone. betting shops, content distribution arms and “Tracks will not take action on their own a host of other service providers. AmTote because tracks are not in the business of was bought by Magna Entertainment (later, integrity. Tracks are in the business of making The Stronach Group and now 1/ST) in 2006 money conducting horse racing. Some are and as was previously cited, controls most more integrity and safety minded than others. of the tote relationships between tracks and “I think most tracks, confronted with a betting sites. Churchill Downs Incorporated wagering integrity issue, would either bury acquired United Tote in a November 2009 the information or bury their heads in the deal as part of its purchase of Youbet. The sand and it would never see the light of day. third, Sportech, sold its global tote business That’s not every track across America, but the in December 2020 to Australian firm The majority would not want to make public any BetMakers. information that would question the integrity TIF asked former TRA boss Chris Scherf of wagering on their product.” in 2021 if consolidating ownership of tote New York adopted a rule requiring companies with racetracks, as was the case independent wagering oversight, and hired with AmTote and United Tote, made any Sobkowski’s AMS in October 2009 to monitor noticeable difference. all betting on tracks in the state. The rule still “No. I don’t think anyone perceived

28 TIF REPORTS: WAGERING INSECURITY anything was going to change or be firms to secure betting as they witnessed the improved, and that’s the way it played out. failings, making it all the more inexplicable “It made it easier getting the tote that independent monitoring was rebuffed. companies to the table a bit more regularly, Tote representatives said there were no but that’s about it.” such issues. During the period from the Fix Six One professional horseplayer proved, and scandal of 2002 through 2009, horseplayers reported, that he could bet up to 50 seconds increasingly questioned the ability of tote into the start of a race.

Past-posting is the act of placing a bet after a race has started because the wagering pools were not properly closed. Professional Part SIX horseplayer Mike Maloney had suspected past-posting was happening with regularity and pleaded with a variety of officials for years to clamp down, but to no avail. PROOF Paul Bowlinger, then Vice-President at

29 TIF REPORTS: WAGERING INSECURITY the Association of Racing Commissioners International (ARCI), a trade group of racing commissions, recounted his 2007 observations of Maloney in a 2008 conference at the University of Arizona. “He basically came and told this audience [one year earlier]…I past-posted and I did it to show the industry how easily and how frequently it can be done.’ “ Maloney is a member of the Thoroughbred Idea Foundation’s Wagering and Integrity Issues Steering Committee and documented his experience uncovering past-posting opportunities in the 2000s at the end of his 2017 book “Betting With An Edge.” After engaging, or attempting to engage, with a plethora of track executives Mike Maloney and even the NTRA, Maloney realized race under their supervision. there was almost no traction to securing This mechanism, known as a “stop wagering systems. wagering device,” is supposed to lock all He wrote: wagering on that race from on-site and at “To make people in racing realize what’s all other locations off-site, and online, where going on here, I don’t just need proof…I need bets are accepted. Maloney noticed that the to drop a bomb. At Fair Grounds in 2007, I act of closing the pools was replicated in found one.” individual betting terminals with an audible After months of trying to understand notification to live tellers. the issue while betting the races, Maloney explained how he identified that betting pools were not closing appropriately. Tracks maintained little to no record of when races The Beep actually started and a series of issues with time syncs between tote betting machines With an established “office” for wagering and the host track made it increasingly at Keeneland, and with a semi-private teller challenging to prove when there was an to enter Maloney’s bets, he began to notice actual problem. the “beep.” What Maloney knew, for certain, is that if “The beep is just an alert to the teller. the mechanism to stop betting at the host I began to listen for the beep. In the vast track and all other simulcast and online majority of races, it came at the proper time. sites was being used, it was not always The gates would open, within two seconds functioning correctly. I would hear the beep, and I knew the race Stewards at tracks are provided a was properly closed. mechanism to close the betting pools for a “If I was betting that track, my tickets

30 TIF REPORTS: WAGERING INSECURITY would stop coming out. But that’s not how almost like I was a criminal for revealing to it was all the time, and I noticed that certain them their own systems’ failings.” tracks were a lot worse than others. A June 2008 past-posting incident came “Fair Grounds was really bad about to public attention after it was learned it. Golden Gate was really bad about it. customers at Tampa Bay Downs were able Aqueduct was really bad about it. The to bet on a race at Philadelphia Park (now Florida tracks had issues. As I watched this, Parx) after the race was over, clearing more I no longer suspected that past-posting than $13,000 from $2,000 in bets made was possible, I knew with certainty it could after the race. happen.” The TRPB’s Curtis Linnell told the Paulick To prove the point, Maloney bet on a race Report at the time “it didn’t look like it was at Fair Grounds where wagering remained widespread.” open during the race, well after the start. Paulick wrote: “We were over 50 seconds into the race when I heard the beep and wagering finally closed.” Following these startling revelations, This issue begs the Maloney thought an investigation would be forthcoming and wagering security question of who is bolstered. minding the tote, a “I got a visit from the TRPB…I was hoping I’d be able to help them investigate the patchwork, less- incident, but that was naïve. They were more than-state-of- interested in investigating me.” While Bowlinger simplified Maloney’s the-art wagering actions in his 2008 remarks, Maloney clarified his intent in a 2021 interview for TIF. network that handles “I certainly wasn’t doing it for fun. Despite the approximate regular pleading with some officials, very few believed it was happening and said they $15-billion in bets did not have actual proof. “So, I showed them the proof from my each year and flows bets and all of the other legwork I did to through racetracks, expose this for them. I thought that would be enough for those in charge to realize hubs, guest hubs, off- that there was a real problem with the tote track betting sites, systems and that now it could get fixed. “Instead, I was called before two account wagering Commission meetings to show cause as to why my racing license shouldn’t be revoked. systems, and off-shore “It seemed that more than anything, they rebate shops? wanted to intimidate me and interrogate me,

31 TIF REPORTS: WAGERING INSECURITY Maloney blogged about the WHISTLEBLOWING incident, which was then picked-up by Paulick Report. Wagering on the race More than 18 months after Maloney’s first at 33 locations had not been closed proof and exposure of past-posting, and seven properly, enabling patrons there to years since the Breeders’ Cup Fix Six, Maloney continue betting on the race even after was contacted by a tote employee “who didn’t the results were known. trust his company to report” such an incident Tote officials recognized the issue properly. and did not honor winning bets placed The race in question was the Grade 3 Los at the 33 locations for the race, though Angeles Handicap at Hollywood Park on May they never raised the issue to the 16, 2009. public, until Maloney blew the whistle. “Rather than immediately report it myself and “The Hollywood incident summed initiate the usual industry cover-up, I decided to up the industry response to all of the wait and watch what the tracks and regulators tote problems. would do… “First, the industry doesn’t want “I was hoping the higher-ups at Hollywood anyone to know about the issue, Park would inform the betting public of the failure because it makes them look bad. Then, of the tote system. Then I hoped to see the when they’re called on it, they deal California Horse Racing Board, since it regulates with it in a way where they don’t even all wagering and racing in the state, issue a press acknowledge the systematic failure that release regarding a potential investigation.” led to the people who fund the game But there was no immediate reaction. being cheated out of their money.”

Photo: Alex Evers

Hollywood Park

32 TIF REPORTS: WAGERING INSECURITY Maloney’s quest continued for several over years. years, with more incidents identified. Many According to the TTS document: horseplayers recall the incidents and remain “The stop wagering device shall be the concerned about past-posting, though tote judge’s console and a tote system backup experts, who wished to remain unnamed, located at the racing association.” told TIF that the specific issues Maloney That is, the host track where the race is identified about past-posting were rectified. taking place. While he backed away from the fight The primary device is in the possession in 2012, as Maloney explains in the book, of the stewards overseeing the race itself. he remains steadfast to this day that the But the 2020 update amends the backup wagering systems for American racing still device’s requirements. lack some of the basic security provisions “Said tote system backup may be they need. operated by local racing personnel and/or racing stewards, and also remotely operated by tote personnel not physically located at the racing association. A STEP BACK “If the tote system backup is operated remotely, a protocol for the remote operation shall be submitted to the racing commission FOR INTEGRITY for approval.” In other words, the main device is still with the stewards, but the backup device IN 2020 can be operated remotely, out of control of the track and stewards. This has In December 2020, ARCI adopted flabbergasted Maloney, who offered the an update to its Totalisator Technical following comments in 2021: Standards (TTS) document. This document “I can’t imagine a system where an contains the requirements for North update of these protocols would bring us to, American pari-mutuel wagering operators hypothetically, a less secure operation of the and bet-takers, and is supposed to be stop wagering function in 2021, but that is adhered-to by members. what seems to have happened. In its most recent update, the document “The same general lack of concern I included an adjustment to the requirements felt the industry showed horseplayers in of the stop wagering device. As it describes, 2007, seems to still be in place now. The tote vendors “shall install two separate betting infrastructure is ancient. How can devices that activate the stop wagering a reasonable observer look at what we function.” have in place and not think it is in need of The device closes wagering on a race monumental upgrades to protect honest and provided all downstream receivers of customers?” the signal from the device are calibrated, If technology had evolved across the it stops the occurrence of past-posting as American pari-mutuel wagering landscape painstakingly identified by Mike Maloney and centralized backup remotes were

33 TIF REPORTS: WAGERING INSECURITY implemented with transparent oversight, “The 2002 pick-six scandal happened for then confidence might be warranted. a variety of reasons, all well-documented. But that does not seem to be the case. To the best of my understanding, the only Instead, while other gambling update that has been made to the ITSP is technologies continue improving over for the pick six, or any multi-race bet like it, time, tote technology seems to remain which the industry calls ‘Pick-N’ bets. They’ve much the same. moved from late scans to early scans.” The ITSP identifies an early scan is “used after the winners are known from leg to leg of Pick-N pool types.” “TRUST US” The total Pick-N play, with combinations and wager amounts, is still not secured and transmitted to the host track before the ISN’T ENOUGH betting sequence begins. In 2017, Maloney called these situations “vulnerabilities Alarmingly, some of the same “late without reasonable oversight.” scan” functions which Chris Harn and his These processes still exist today. conspirators exposed in the Breeders’ Cup TIF questioned the TRPB about the Fix Six remain in place. unusually low superfecta result of the 2019 Maloney documented in 2017 that the Kentucky Derby in the weeks following the method by which tracks identify winning race. That year’s race was unofficial for superfecta bets across all North American more than 20 minutes before stewards races still uses the “late scan” approach for demoted Maximum Security and promoted verifying winning tickets. Country House, at 65-1, to the win. The Instead of submitting the full details longest-priced winner of the race in modern of every superfecta bet to the host track times, which holds America’s largest field as it is placed, the remote bet taker only and largest superfecta pool, produced a communicates to the host track the dollar superfecta return which was surprisingly amount of superfecta bets they have taken low in comparison to other combinations in before the race begins. Once the race is the past, at just $51,400. run and order of finish confirmed, then the There may be a plethora of reasonable host track requests that the remote betting explanations, but none have ever been sites provide detail on how many winning provided. superfecta tickets should be paid to them. “Trust us” isn’t enough. Defined as a process “used after the The 2005 remarks of then Del Mar winners are known” by the Inter Tote Thoroughbred Club President Craig System Protocol (ITSP), a shared resource Fravel, now the Chief Executive Officer used by tote companies, tracks and remote for 1/ST Racing (formerly The Stronach betting sites, every superfecta bet on Group), questioned the ability of the tracks North American racing is processed as a themselves to properly ensure the security late scan. of wagering. Keep in mind that the one entity Maloney said: which exists in this capacity, the TRPB, is a

34 TIF REPORTS: WAGERING INSECURITY wholly owned subsidiary of a consortium of ultimate arbiter of those kind of decisions.” racetracks. North American racing is still waiting for “We [track operators] are a little suspect one, some 16 years after Fravel’s remarks, simply because we are maybe overly and 19 years since the Breeders’ Cup Fix confident at times. Six. “I think to allow customers to have The lack of oversight is a flashing red sufficient levels of confidence in us, we light to both existing and new racing fans. have to demonstrate that not only are we In our next installment, we will look at other capable of reviewing things, but that there is racing jurisdictions which are tackling these a sufficiently independent and authoritative topics and seeking to keep pace with the organization out there that can be the ever-changing world.

Transparent oversight of racing has been defunded over decades and customer protection remains weak. North American Thoroughbred racing in the 2020s is saddled with Part a regulatory infrastructure designed for a sport in the 1970s. Racing has to change. Ten years ago, Jockey Club research conducted by McKinsey showed that a minority of racing fans, just 46% of those surveyed, said that they would recommend the seven sport to others. “Thoroughbred fans are almost twice as likely to recommend baseball (81%), football (73%), or basketball (77%) to others as they are to recommend Thoroughbred Z racing.”

35 TIF REPORTS: WAGERING INSECURITY There are many reasons for racing’s companies they patronize. waning appeal among its own fans but “Ethical consumerism is when a consumer the gambling experience is certainly a key consciously chooses or avoids a product, or one. Simply getting more eyes on racing an experience based on the perceived ethics of is not going to be enough to sustain the processes that are used to produce them. interest amongst future generations. “…this is not just a Millennial or a Gen-X While many of racing’s existing phenomenon…this is consumers who actively American customers have long been consider company values when making a accustomed to a sport with substandard, purchase and remember these are purchases haphazard and insufficient oversight, the of inanimate objects.” next generation might not be as forgiving. How can American racing hope to compete A 2019 piece by Julie Arbit, Global Senior in the future for market share if newer Vice President, Insights at VICE Media potential customers are turned-off by the Group, highlighted this burgeoning need sport’s poor standards of oversight? Sports among Generation Z, whose oldest betting customers in America generally members are now in their mid-20s. have confidence in the betting systems and “Gen Z is coming of age in a world of oversight of major sports for which wagering infinite choice, and this affects everything is accepted. from how they define themselves to how At the time of this publication, 26 states and they love and how they buy… the District of Columbia, accounting for more “If brands want consumers to be than 45% of America’s population, reside in a committed to them, brands need to state where sports betting is legal. Nearly all be committed to consumers. What of those states are currently accepting bets at brands say and do should demonstrate present while others will launch soon. this dedication — showing that the While American horse racing is a laggard, satisfaction and happiness of their others in the racing world are staying relevant customers is of utmost importance. and accomplishing this far better. Trust is also paramount in relationships, and brand relationships are no exception. Authenticity, transparency and two-way dialogue with consumers are essential.” The topic has been raised in racing COMPREHENSIVE too. Dr. Jennifer Durenberger, Jockey Club Steward at the New York Racing REVIEWS LED TO Association, has served as both a regulator and regulatory veterinarian, among many other roles across racing. UPGRADES In a 2019 presentation at the University of North America is an outlier when it comes Arizona’s Global Symposium on Racing, to monitoring wagering and uncovering she highlighted the growing interest malfeasance. consumers are showing in the values of

36 TIF REPORTS: WAGERING INSECURITY Two other major racing jurisdictions “…lead a process of consultation with – Australia and Great Britain – have racing industry Controlling Bodies and aggressively promoted racing and stakeholders, with the objective of identifying wagering integrity during the same two options to ensure that integrity assurance decades (2002-present) while America has within the industry is of the highest standard.” floundered on such issues. “For the purposes of this Review, “integrity The British Horseracing Authority (BHA) services and systems” were deemed to has been a leader in monitoring wagering include: overall stewardship and associated as a key component of its integrity services. investigations, race-day operations, betting Australia, which operates a state-by-state compliance and regulation, veterinary regulatory system similar in basic structure services, drug control, licensing and to America, has created independent registration.” statutory authorities to enhance integrity The finished product, known as theLewis across all facets of racing. Report, can be read in its entirety here. The British racing industry studied the American racing has not seen anything matter across 2002-2003, published the similar to the Neville Review, the Brickell Neville Review in 2008 which, among other Review the Lewis Report, or a 2018 things, “assessed the role and procedures Australian update, the Wood Review. racing and sports governing bodies should That is part of the problem, according adopt when dealing with matters that may to global sport and racing integrity expert, involve breaches of the criminal law as well Professor Jack Anderson: as its own rules in relation to corruption “Thoroughbred racing in the U.S. urgently connected to betting.” In 2016, it followed- needs the equivalent of a Lewis Report and up with the Brickell Review. one that would follow a similar methodology In the foreword of the Brickell Review, to the integrity reviews undertaken [by both then BHA chief executive Nick Rust outlined the BHA and Victoria].” quite clearly the importance of the topic to Anderson says that such reviews offer the sport’s regulators. an opportunity to reset expectations and “It should come as no surprise that one prepare the industry for a major boost to of my priorities is to continually improve integrity that is most needed. For him, two our integrity work to make sure we have the key principles emerged from these reports: confidence of participants and the racing “The greatest threat to the integrity of and betting public.” racing in the U.S. and elsewhere (be it race Confidence is good for business. rigging for gambling purposes, doping, Australia’s focus is similar, but animal welfare) often comes from poor but approaches it differently. engrained practices and culture within the Victoria is Australia’s second largest sport itself and not external threats. state and its capital, Melbourne, is home to “The first, and most prominent one of the great racing festivals, headlined recommendation in the Brickell Report, is by the Melbourne Cup. related to engagement with participants In 2007, Victoria’s Minister for Racing in the industry and the need to consult commissioned Judge G.D. Lewis to: continuously with the sport’s stakeholders

37 TIF REPORTS: WAGERING INSECURITY to better ensure ‘buy-in’ from the sport for “Radical, comprehensive and, likely, integrity initiatives. federally mandated statutory reform is “Rewarding good behavior in the industry, needed to better promote the integrity of consulting them on education initiatives and thoroughbred racing in the U.S.” better communication between regulators While it is unlikely that the Horseracing and the industry’s participants perpetuates Integrity and Safety Authority (HISA) will long term trust and confidence in the take-up wagering systems integrity, bet integrity of the industry as a whole.” monitoring and understanding wagering’s “Second, and similar to the Lewis report’s role in rules violations and potential criminal recommendations in Australia, it is unlikely infractions is a basic practice around that any review of the thoroughbred industry the world. Communication around such in the United States would recommend incidents is routine. either that the status quo in, or piecemeal Measures of transparency from reform to, current integrity services in the international racing regulators far exceed sport nationwide would be the way forward. America’s standards at present. Part eight Damage Just because American racing offers only pari-mutuel wagering on racing does not suggest it is less vulnerable to corruption. History demonstrates otherwise. But compared with international counterparts, North American racetrack operators and regulators do far less to watch guard on their own sport. Australia, Great Britain and Hong Kong serve as examples with greater controls on the oversight of wagering, no matter the channel. While in Hong Kong the only legal market is pari-mutuel and operated by the Hong Kong Jockey Club, Australia and Great Britain have incredibly diverse wagering markets. The Hong Kong Jockey Club (HKJC) is the only licensed operator for betting in Hong Kong, has total handle exceeding US$15 billion annually from more than 800 races across 88 race days. That total dwarfs U.S. handle while conducting about 3% of the number of races. One difference, racing information is incredibly detailed and free, provided by the HKJC. Another, they take the policing of racing seriously.

38 TIF REPORTS: WAGERING INSECURITY Challenges maintaining integrity are algorithms which have been developed to ever-present, as described by the recent detect suspicious betting on Hong Kong handbook published by the Asian Racing racing; these alerts are graded based upon Federation’s Council on Anti-Illegal Betting: the degree of irregularity, and are updated as “The HKJC has a dedicated racing the betting market evolves… integrity betting analysis team which “In 2018, betting alerts raised concerns operates sophisticated monitoring systems of suspicious betting on a leading jockey and processes to detect irregular and who, after an investigation, was banned suspicious betting activity on both the legal for 15 months for betting offenses at a and illegal markets… subsequent inquiry...” “The bespoke HKJC monitoring The reference is to the suspension of capabilities use technology designed and jockey Nash Rawiller (pictured next page), built in-house specifically for the integrity which is covered in this article from the threats to HKJC racing… South China Morning Post. “Betting alerts are based on unique betting Monitoring in Hong Kong goes several

39 TIF REPORTS: WAGERING INSECURITY extra steps too, as the ARFCAIB Handbook integrity team both in advance of racing explains. and working with officials during the race “The principles behind bet monitoring have day. There is little comparable at North expanded to include integrity profiles on all American racetracks. licensed persons. Alerts are run on a wide “Throughout the day… BHA betting range of performance outcomes and are analysts monitor the markets for any based upon the structure of the betting alerts. signs of unusual activity. This takes place “For example, if a jockey has an irregular across all the modern betting platforms, trend for being slow to leave the starting and analysts can also call upon bespoke stalls, a graded alert will be triggered.” monitoring software to drill down and Great Britain and Australia both have understand the emerging picture… wagering alternatives which may have “As well as the betting markets, the BHA’s contributed to their implementation of analysts also study the races themselves, expanded oversight measures. On its using speed maps and a database provided website, the BHA describes the role of its by an industry-leading software company

Photo: Alex Evers

Jockey Nash Rawiller and Mr Stunning

40 TIF REPORTS: WAGERING INSECURITY to establish the likely shape of races, both from a performance perspective and a BET MONITORING betting angle. “Before racing, the BHA’s Integrity team will update the professional Stipendiary IN PRACTICE Stewards at each racetrack with betting information, and highlight to them any Just like the races themselves, there are potentially unusual activity or horses to regional intricacies when it comes to the be wary of or vigilant about, based on the monitoring of wagering. emerging intelligence and profiling work. According to details in the ARFCAIB “Post-race, the Integrity team can advise Handbook, the BHA successfully prosecuted the Stewards on any issues about runners 82 individuals, including 12 jockeys, following and/or rides that concern them, and on betting corruption investigations in the ten occasion can request action before a years from 2009 to 2018. Bet monitoring and race, when betting patterns are especially systems to flag suspicious bets, developed unusual. On rare occasions, a pre-race by the betting companies themselves, have Stewards’ enquiry is held, which can disrupt featured in many of them. a potentially corrupt event by letting those In one example, jockey Darren Egan was involved know the BHA is aware of what is suspended for 12 years in 2015 for incidents going on.” where Egan did not ride horses on their The Australian state of Victoria is full merit, in conspiracy with bettor Philip similar. Racing Victoria also has betting Langford, who paid Egan to stop the horses analysts working as part of their overall from winning. The details of Langford’s integrity team, in regular contact with betting around the incidents were damning. stewards at racecourses, providing Betting operators shared information information that could be helpful in with the BHA crucial to the investigation. policing the sport. Betfair suspended Langford’s account after The ARFCAIB highlights that there are he risked more than the equivalent of $1.1 strong common characteristics linking million with profits of approximately $75,000. these entities. Each jurisdiction has: The full BHA report is here. • Dedicated betting analysis teams, More recently, the Irish case of trainer • Human assessment supported by Charles Byrnes combined a series of automated systems, nefarious actions which fleeced bettors, • Real-time monitoring and endangered other horses and jockeys and assessment, brought another cloud over the sport. But • Licensed betting operators in the case itself was made because of the well-regulated environments which collaborative relationship between regulators provide useful data. and betting operators. If these elements are present in North As the Irish Horse Racing Board (IHRB) American racing, no one sees or feels Tribunal report outlines, Byrnes was their impact. suspended six months for being “seriously

41 TIF REPORTS: WAGERING INSECURITY negligent” after an investigation revealed the neglect of the trainer. The damage was Viking Hoard, a horse he trained, was doped financial in the case of affected punters, with a sedative while unaccompanied in the and reputational in the case of the racing pre-race stables at Tramore Racecourse on industry. This case illustrates the specific October 18, 2018. and additional challenges and dangers to the Furthermore, information sharing integrity of racing posed by the widespread between betting operators and regulators ability to back horses to lose races for confirmed unusual wagering activity on significant returns.” Viking Hoard to lose. Global sport and racing While lay betting features prominently integrity expert Jack Anderson summarizes in many of these cases, that option is not the situation: available to customers in North America “The IHRB received alerts from the British through legal operators. Horseracing Authority (BHA) based on Regardless, racing regulators and information received internationally from stakeholders across the sport must commercial betting exchanges. be attentive to the threats posed from “This information indicated that there ANY wagering market on its races. U.S. was a substantial lay bet on the Tramore customers might not be able to enter lay race, with a potential liability of €34,889 bets or fixed odds bets on its races at if the gelding won. The sum risked to win present, but the rest of the world is firing was €3,200. This represented 50% of away and it is naïve to think some are not the relevant exchange market. The IHRB looking to capitalize on any opportunity. Tribunal was satisfied that this risk/reward ratio demonstrated substantial confidence on the part of the layer, and evidence was also given of similar patterns in the horse’s previous two starts. “Further evidence suggested three of these lay bets had been traced through the Betfair exchange to the same account number and that the lay bets were initially placed with a limited liability company, which placed them in turn with Betfair. The Tribunal was also informed that the controlling person behind the company was an individual based in a third jurisdiction and was said to be associated with match fixing and associated betting in connection with other sports.” The IHRB report noted that while there was no connection between Byrnes and the betting patterns, the impact was clear: “Significant actual damage flowed from

42 TIF REPORTS: WAGERING INSECURITY Part Nine Alerts

Foreign bookmakers accepting bets on American races. American racing have recently identified The IBIA told TIF that five races from suspicious betting on U.S. races themselves. one American track were the source of According to the International Betting the alerts, all of which had one consistent Integrity Association (IBIA), a consortium of characteristic among them. As for the mostly European-based bookmakers, 270 specific details, no more information suspicious alerts were generated across all could be shared due to data protection sports by their monitoring platform in 2020. requirements. Five of the IBIA’s alerts were generated The suspicious activity originated with on U.S. racing, all in the fourth quarter of customers outside of America whose 2020, the first time the group has identified bets were regulated by a well-respected, any suspicious betting activity on North international gambling regulator. The suspicious activity was reported to this regulator at the time of the relevant races. However, the IBIA does not have information-sharing relationships with any North American racing jurisdictions, and up until now, their betting operators had not generated any alerts on U.S. racing. IBIA Director of Integrity Matt Fowler offers more detail. “If there were agreements, or memoranda of understanding between IBIA and American state racing regulators in place, we definitely would be reporting it directly to them. We do have relationships with other American sports authorities, so it would not be unusual for us to reach out to an American entity and provide information.” There is no reason to wait until the recommendation phase of this series – such agreements or MOUs should be

43 TIF REPORTS: WAGERING INSECURITY struck as soon as possible. 70 North American tracks at fixed odds to Prior to publishing this series, TIF foreign customers. It sells North American connected one major state regulatory track signals to international sites, along agency to IBIA and has learned other groups with a variety of services to bookmakers, have reached out since the summary of including data. “Wagering Insecurity” was published with Under the radar, American racing is these details. doing big business with mostly European The IBIA’s 2020 annual report showed 12 customers to enable fixed odds betting. suspicious betting alerts were generated A representative of one major European from American tennis matches, up from bookmaker told TIF that the annual market eight in 2019 and 3 in 2018. Prior to 2020, for U.S. racing at fixed odds to only European tennis had been the only sport to generate customers, almost exclusively enabled by suspicious alerts from American events the XB-Net sale of signals, is more than available for betting across the IBIA’s $1.4 billion, or the equivalent of nearly 13 membership. percent of all pari-mutuel wagering on U.S. The IBIA noted that unusual betting races in 2020. patterns alone do not generate suspicious Another bookmaker told TIF that at the betting alerts. Fowler continued: height of the pandemic-related shutdowns, “There are many factors that go into European bookmakers were handling the declaring a suspicious alert. This goes well equivalent of between $690,000 and $1.38 beyond just an unusual betting pattern or million per race at Will Rogers Downs in unexpected price movement. There is a Oklahoma, far outpacing the pari-mutuel process in place to getting to the 270 alerts totals recorded from America’s own we issued in 2020, which is much less domestic customers on those races in than the total number of incidents which what was, undoubtedly, an unusual period. were reviewed. We take very seriously the But over the long term, the foreign business of declaring an alert.” fixed-odds business on American racing continues to grow. One track executive, who requested anonymity, told TIF that his track had BOOMING experienced a 500% increase in revenue from these international fixed odds agreements over the last six years. BUSINESS Lay betting on American racing – that is betting on a horse to lose – is also available International customers are legally via exchanges like Betfair. betting North American racing at fixed odds Across races three through five at through licensed bookmakers. Aqueduct on Thursday, February 25, They are betting a lot of money. 2021, the pari-mutuel win pools totaled XB-Net, owned by 1/ST (formerly The a combined $343,344. But those with Stronach Group), “is the exclusive provider access to the European-based Betfair of international wagering” on more than exchange were trading the race too, with

44 TIF REPORTS: WAGERING INSECURITY more than a combined $70,000 matched, illegal, in Hong Kong and around the world, roughly 20% of the pari-mutuel win pool and we have a dedicated team that does on the races. that. We can use the data we find to be As referenced in previous installments, more specific in investigations and we the monitoring of wagering in foreign identified this as a significant case. The jurisdictions has traditionally identified analysis we do of markets, both legal suspicious activity on such exchanges. If and those overseas, helped us identify a North America is doing this, they are doing pattern. We had sufficient evidence we so without any public acknowledgement. could start the investigation.” In contrast to Hong Kong, American racing lacks proper oversight of its wagering systems and has little MONITORING transparency on incidents involving the integrity of racing through wagering. How can American regulators police ALL WAGERING illegal markets if it has negligible control over the legal market? MARKETS The enormity of the challenge should not render it unconquerable. Americans are betting through In Hong Kong, although its own unregulated operators beyond its shores. business is exclusively pari-mutuel, the While some of these platforms may be choice is clear: it needs to monitor all licensed by some jurisdiction, they are not betting markets where its racing is offered. legal for Americans to transfer and receive Measures to monitor legal, gray and illegal funds and they do not share information markets were key in their 2018 actions with regulators about incidents which against jockey Nash Rawiller, leading to may threaten the integrity of racing. a 15-month ban and his expulsion from These sites exist not only because riding there. they enrich those who run them, but in The South China Morning Post captured some cases, for more nefarious reasons. the insight of HKJC Chief Executive Regardless, they offer customers Officer Winfried Engelbrecht-Bresges in opportunities to wager in relative the aftermath of the Rawiller ban. anonymity beyond the reach of regulators. “The Jockey Club has developed Several prominent American horse technology to gather data for illegal owners have boasted about their play gambling sites and employs a stipendiary through such channels. Another illicit steward whose job is to watch for betting platform is using familiar, suspicious betting patterns. People should credentialed racing writers to create know we have an extremely vigorous unique content in the hopes of attracting system and that we can uncover things more Americans to wager. that perhaps others can’t… At one point in time, there was hope “We monitor markets, both legal and that America could learn more about

45 TIF REPORTS: WAGERING INSECURITY international markets which were betting role of illicit betting operators, while on U.S. racing, some through legal also interacting with law enforcement to arrangements and others illicitly. pursue avenues to curtail U.S. citizens In the National Thoroughbred Racing betting on U.S. races outside the legal Association’s 2005 publication of its markets. Establishing relationships with strategic plan of work for the next five licensed operators to share information years (2006-2010), it detailed the need for was a goal. the NTRA to work with the international After much research, TIF concludes racing community to understand the this never materialized. Part Ten Grey Jim “Mattress Mack” McIngvale made it Financial Crime (ARFCAIB): clear how important it was, for him and the • [Legal] market: Companies licensed to overall racing industry, to place his massive operate in the jurisdiction where their Kentucky Derby bet on-track at Churchill customers are located. Downs. He told the Thoroughbred Daily News: • Grey market: Companies licensed in “It’s crazy that some people in the horse some jurisdictions, but which take bets racing business bet with a bookie or go from consumers in jurisdictions where offshore to a place like Costa Rica. They’re not they are not licensed. supporting racing.” • [Illegal] market: Operators who have no While there are plenty of legal arrangements license from any jurisdiction. for betting on U.S. racing, be it through any No matter how robust your legal market ADW account, at the track, an OTB outlet, regulation and monitoring may be, racing or even for those abroad betting through operators worldwide must be attentive to licensed bookmakers who have agreements the issues created by grey and illegal betting in place with U.S. tracks, there are many illicit sites. operators which seek to skirt the law and For this report, we speak most about “grey share no revenue with horsemen or track market operators” – or GMOs. Their presence operators. can impact legal pari-mutuel markets, Betting markets can be classified in three degrade customer confidence and threaten categories, defined below in the recent the integrity of the sport. That impact was felt Handbook from the Asian Racing Federation’s on at least three occasions in the last month Council on Anti-Illegal Betting and Related at one U.S. track.

46 TIF REPORTS: WAGERING INSECURITY combinations likely to lose, inflating the actual tote returns on more favored horses. The goal of such manipulation is to dramatically change the odds on the pari- mutuel outcomes and win far more by betting through a non-parimutuel operator (like a GMO) which pays at track prices and at generous limits. While the manipulated bets on the legal, pari-mutuel pools are Click to read the ARFCAIB Handbook (PDF) expected to be losing ones and inflate the returns for other successful customers, the manipulator aims to make a far larger RECENT score through their other plays. There were instances of such manipulation through the mid-1990s at Nevada racebooks before MANIPULATION most books stopped booking racing bets and adopted pari-mutuel wagering on racing. In April 2021, at least three instances of The quinella pool at Will Rogers typically tote pool manipulation occurred in quinella handled between a few hundred dollars pools at Will Rogers Downs in Oklahoma. to less than $2,000 per race. In the most Extremely large wagers, relative to the egregious example of manipulation, which size of the overall pool, were placed on occurred in Race 2 on April 27, the quinella

47 TIF REPORTS: WAGERING INSECURITY pool totaled $7,469 for this Oklahoma-bred There were variations on these claiming event. manipulations earlier, on April 7 and April The winning quinella (first two horses in 20. The acts of manipulation are not in any order) featured the two favorites in a violation of law or even existing betting five-horse field and returned an astounding rules but could trigger a blow to customer $51.30 for every $1 bet. The exacta with confidence and lead to legitimate the same horses returned $6.20 while the questions about the integrity of race trifecta with the third choice in betting results, depending on the circumstances running third paid $9.60. of each race. Vigilance from stewards and What seemed like a gift for favorite backers regulators is absolutely necessary. could have been a nightmare for those who Will Rogers Downs, much to their credit, legitimately backed the two longest-priced stopped offering quinella wagers after their runners in the small field if that result had April 28 races. materialized. The quinella probable payouts featuring those two horses, who closed at 6-1 and 9-1 in the win pool, would have returned $1.05 for every $1 bet. GMOS While wanting to raise awareness to the issues the GMOs create, TIF has no interest in promoting a troublesome betting option. For that reason, we use generic titles below to describe the actions of three GMOs. Grey Market Operator 1 (GMO1) is based in Asia and is reportedly the world’s largest unregulated betting exchange. It shares no information and allegedly handles as much on Hong Kong racing as the Hong Kong Jockey Club (HKJC) itself. Michael Cox’s 2015 profile is well worth Thoroughbred Idea Foundation Graphic reading, providing additional insight on GMOs and a connection to U.S. racing. A review of the quinella probables in the In February 2021, three men were final moments of betting showed that the arrested, and more than US$1 million in cash eventual winning combination was paying seized, at Hong Kong’s Sha Tin Racecourse $3.90 in the next-to-last update of the where the men were allegedly laying horses probables, while the longshot combination, which were slow into stride, using sites like which would tumble to $1.05, was paying those run by GMO1 and taking advantage $18.30 at that time. of the lag between live viewing of the races What was being treated as the least likely and the ability of sites to shut betting. outcome in the win and exacta pool would Attendance at Sha Tin was severely close as a 1-20 favorite in the quinella pool. limited due to the COVID-19 pandemic and

48 TIF REPORTS: WAGERING INSECURITY those arrested were guests of, at the least, banking transfers. Hong Kong horse owners. According to the ARFCAIB Handbook, As cited previously in this series, this evolution in funding methods presents Hong Kong’s betting monitoring includes more challenges to concern racing. profiles on jockeys and alerts are triggered “Many cryptocurrency betting operators if “irregular trends” for slow starts are accept bets that allow the customer identified. complete anonymity… Grey Market Operator 2 (GMO2) is perhaps “To support integrity operations, sports the most aggressive operator seeking to and gambling regulators rely on information- attract racing wagering from Americans. sharing agreements with betting operators… GMO2 operates a marketing arm which “Account opening procedures can be produces legitimate, original racing-related limited to user name, password and e-mail content from established and even award- address, while some operators do not even winning American racing writers and media require these for a customer to place a bet.” members. They created an annual award On Saturday, January 30, 2021, GMO3 series, tagging various trainers, jockeys and took betting across every Thoroughbred other racing fans through social media in and Standardbred race in America. the hopes of engaging them to spread their One year earlier, in January 2020, a tweet message and promote their illicit platforms. from an American owner whose horses You won’t find a more striking example of accumulated earnings approaching $9 the degradation of American racing journalism million from more than 1,000 starts over and its lack of independent media coverage the last five years as of April 2021, boasted on it than seeing recognized journalists and about winning thousands from GMO3 and publicists accepting work for a GMO. posted screenshots (since deleted, though GMO2 prefers that its customers use retained by TIF) of the successful bets. cryptocurrency to fund accounts and receive winnings while guaranteeing a Photo: Alex Evers daily rebate on all play. One executive with a legal American ADW, who asked not to be identified, told TIF that GMO2 has “an incredibly effective search engine optimization strategy which almost certainly is helping them grow their business.” Grey Market Operator 3 (GMO3) offers 17 different methods to fund accounts to bet on any number of sports or racing offerings. Eight of the funding methods are cryptocurrencies, headlined by Bitcoin, but includes Ethereum and several smaller cryptocurrencies. GMOs seem to have a growing affinity for cryptocurrency because of the difficulties with legitimate Hong Kong’s Sha Tin Racecourse - 2018

49 TIF REPORTS: WAGERING INSECURITY A second horse owner whose family market where there are healthy, established history in the sport includes a win in a reporting channels when there is a large Breeders’ Cup race, posted images of illegal market, with insufficient know-your- successful GMO bets on racing via social customer [policies] and almost non-existent media in February 2021. He indicated ADWs reporting channels to racing authorities?” were not legal in his U.S. state, and thus he Betting sites in the grey or illegal markets had no choice but to use such an option. are not operating solely out of pure profit Betting with GMOs is the least sustainable motives either, but also as a conduit method of wagering on American racing. for money laundering of other criminal No revenue from these bets is returned – to proceeds. horsemen to fund purses or tracks to fund The ARFCAIB Handbook outlines the operations. specifics: They are free riders on racing’s own “Illegal betting is also a key means of product. money laundering by transnational organized crime. It has been estimated that US$140 billion, or 10% of global crime proceeds, is laundered through sports betting every year… RACE FIXING “Sports betting websites are essentially analogous to financial institutions as they are involved in deposits and withdrawal AND WORSE… of money, which can be huge amounts. Yet, illegal operators are subject to none Speaking at the 2020 Asian Racing of the [anti-money laundering] oversight of Conference, Tom Chignell, the HKJC’s financial institutions or indeed legal betting Executive Manager, Racing Integrity and operators. Betting Analysis, a member of the ARFCAIB, “Exacerbating this is the fact that many and a former betting investigator with the illegal operators are deliberately run poorly in British Horseracing Authority (BHA), offered a this regard – they are set up by transnational sobering assessment of the overall situation: organized crime specifically to make the “The greatest betting integrity threat proceeds of crime appear to be the profits to racing are jockeys or trainers stopping from licensed betting operations. horses from winning and then betting them “For example, in 2015, police seized EUR2 to lose on the illegal markets.” billion [approximately $2.5 billion] of assets Chignell makes it clear that the sport’s from the ‘Ndrangheta, the Italian organized attention to bet monitoring must come not crime group behind most of Europe’s only on the legal markets on which racing cocaine trade. These assets included 82 regulators have some oversight, but also gambling websites licensed in the betting an awareness of other, less-visible markets haven of Malta, through which huge sums which can also lead to corruption of the sport. were laundered.” “You have to be looking at the illegal The ARFCAIB does not currently have market. If you are looking to race-fix or a member from North America within match-fix, why would you bet with the legal its ranks, which includes racing industry

50 TIF REPORTS: WAGERING INSECURITY representatives from Australia, Great co-operate with law enforcement or sports Britain, Hong Kong, New Zealand, South governing bodies. Illegal betting operators Korea and organizational representation ignore race-and match-fixing, and may from the United Nations Office on Drugs actively participate. and Crime, INTERPOL and the Australia “Race-and match-fixing has a huge social Criminal Intelligence Commission. and economic impact, and if not stopped The more direct connection between the leads to a vicious cycle of corruption which role of racing and that of grey and illegal can destroy the public’s faith in the sport. markets becomes clearer, as the ARFCAIB Once lost, it is extremely difficult if not Handbook continues: impossible to win back this trust. “The globalization of sport and betting “For horse racing, this is of even greater has been a perfect combination for the concern, since the sport depends on public corruption of racing and other sport. Match- confidence in racing integrity, without which fixers can arrange a fix safe in the knowledge there is no betting appeal.” that leading Asian illegal bookmakers often While a majority of developed racing accept large bets on even obscure sporting jurisdictions are managing their racing events. and betting operations cognizant of these “Unlike legal operators, illegal betting threats, North America is falling short of operators do not share information about much of the rest of the racing world, at suspicious betting patterns or otherwise least for now. Part Eleven RECOMMENDATIONS North American racing has been here the lodestar of American racing, all well- before…and failed. intentioned stakeholders will benefit. In the aftermath of the Breeders’ Cup The establishment of the Horseracing Fix Six in 2002, the opportunity to improve Integrity & Safety Authority (HISA) customer confidence was within the presents an extraordinary opportunity industry’s grasp. Nothing materialized. to blaze a new path for the industry, As this series has outlined, the presenting a sport where all participants challenges in 2021 and beyond are can be far more confident in its outcomes different. Should we meet the challenge than they are now. and make wagering and racing integrity

51 TIF REPORTS: WAGERING INSECURITY RECOMMENDATION ONE The mechanism of federal authority to permit HISA’s creation IS wagering on horse racing: HISA MUST LEAD ON “The term ‘covered horserace’ means MATTERS PERTAINING TO any horserace involving covered horses that has a substantial relation to interstate WAGERING OVERSIGHT commerce, including any Thoroughbred horserace that is subject of interstate off- Most involved in the American racing track or advance deposit wagers…the term industry correctly believe HISA will involve ‘interstate off-track wager’ has the meaning track safety and anti-doping control given such term in section 3 of the Interstate programs. Those views are correct. Horseracing Act of 1978.” But HISA’s role should be more than just HISA has been endowed with the establishing such important programs. power to raise standards and protect According to Section 1205 (a) (2) of the wagering customers. This new authority final legislation passed and signed into should become a horseplayer’s best friend law, HISA shall “…exercise independent and while bolstering the confidence of all exclusive national authority over the safety, stakeholders. welfare, and integrity of covered horses, HISA will operate under the aegis of the covered persons, and covered horseraces…” Federal Trade Commission (FTC) whose

52 TIF REPORTS: WAGERING INSECURITY mission is: “Protecting consumers and competition A) ALL TESTING RESULTS by preventing anticompetitive, deceptive, and unfair business practices through law SHOULD BE PUBLICIZED enforcement, advocacy, and education without unduly burdening legitimate AND MODERN METHODS business activity.” HISA will provide the mechanism to EMBRACED improve the policing of racing. Monitoring Doping control and wagering integrity wagering can be a big step towards that. go hand-in-hand. The insight of Professor HISA has the power to lift the standards of Jack Anderson, cited earlier in this series, racing in America and protect its wagering is clear: customers. “Doping in a sport such as racing is often It should do so. intertwined with gambling interests.” Every pre-race, post-race or out-of- competition sample should be reported RECOMMENDATION Two publicly, soon after it is processed. The results should be reported regardless of the finding – most will be negative. ADOPT MODERN, Positive findings should be identified publicly as soon as possible after results TRANSPARENT BEST are received and the connections receive notice, followed by an explanation of PRACTICES ACROSS THE steps going forward with relevant updates provided. An initial report should include SPORT the substance(s) involved, particularly if it involves a legitimate medication. One key observation is necessary before This is standard practice in many highlighting four modern, transparent best other racing jurisdictions and benefits all practices below, all of which should be participants. The appendix at the end of adopted in North American racing: these are this installment includes a re-publishing of not the only measures to add, but should be the entirety of the press releases from the a starting point. Hong Kong Jockey Club stewards on the It will take a long time for North American case, from a winner at Happy Valley in June standards to be lifted to join the ranks of the 2017. Here is a link to the first public release rest of the developed racing world. That’s OK. of news on the finding. These efforts cannot bring us from a The absence of confirmed details from hypothetical “0 to 100” overnight. Start slow, the Kentucky Horse Racing Commission build capabilities, engage stakeholders and about Kentucky Derby winner Medina Spirit’s show progress. positive post-race test and the failure to Customer confidence is good for explain clearly the steps in the process after business.

53 TIF REPORTS: WAGERING INSECURITY a positive test exemplifies the weakness of the current system, not just in Kentucky, but every jurisdiction in North America. USADA

The United States Anti-Doping Agency (USADA) will replace the current “patchwork quilt” of state-by-state approaches as the enforcement agent of the HISA anti-doping program. USADA’s Chief Executive Officer Travis Tygart, in a February 2021 interview with Photo: USADA the Thoroughbred Daily News, assessed Travis Tygart the woeful state of racing’s overall testing uniformity, and lack of transparency. USADA publishes a history of athlete “I really started looking at the policies tests to provide full transparency, to the around anti-doping and medication control public and also fellow competitors. Its within the [racing] industry and they were website explains the approach: just completely antiquated…they were years “By publishing our Athlete Testing History, behind what the human world, as well as any athlete or member of the public can see the equine and Thoroughbred horse racing how many tests USADA has conducted for industries around the world had done as far specific U.S. athletes, and in different sports, as uniform policies. over the course of a specific time period. “Other places don’t have 38 different Instead of wondering if their competitors racing jurisdictions run by the states, or role models are being tested, people can with frequently conflicted people that track testing data and see how USADA is have an interest in the outcome without working to uphold clean sport.” transparency, without good quality testing, The USADA portal is searchable by year, without laboratory accreditation that is quarter, sport and name, showing the total uniform. It actually reminded me of, and I tests administered, while maintaining a drew the comparison to, what the Olympic separate ledger of all sanctioned athletes world looked like prior to us coming into with full details of the investigations. existence. The greater use of active investigations “So, having a uniform policy, where you to supplement testing will boost confidence. can have confidence that when a horse runs Adopting intelligence-based investigations in California, it’s going to be running under would do the same. the same rules and allowances and free of TIF pondered the possibilities just days drugs as in Kentucky and in New York too, is after the indictments of Jason Servis and going to be a game changer I think, right out Jorge Navarro were revealed. of the gate.” This discussion was front and center

54 TIF REPORTS: WAGERING INSECURITY a month prior to that at the 2020 Asian unaddressed conjecture. Racing Conference when Brett Clothier, One incident from a race at Gulfstream Head of the Athletics Integrity Unit, outlined Park on March 27, 2021 drew thousands that organization’s efforts in world track of views from frustrated horseplayers in and field, where algorithms are used to search of an explanation that was not “analyze unusual performance trajectories forthcoming. The incident was highlighted or spikes in performance…to enable better later on a national broadcast when the horse targeting of athletes” for testing (video of returned in its next start too, though without his remarks). any formal explanations from officials. Clothier added: Stewards should review races from a “It’s very hard to catch determined, well- central location, close to ground-level, with resourced cheats with testing processes easy, face-to-face access to jockeys and that are essentially random.” trainers (or their representatives, assistants, Adopting modern methods, combined etc), to enable direct questioning before with transparency which has become and after races regarding any number of standard in other areas of human incidents, publishing easy-to-find post-race athletics and a growing number of racing reports to explain findings for the day. jurisdictions, will bring American racing A Spanish-language interpreter should be forward, building confidence. used to facilitate the process when needed. While many stewards around the world view races from an elevated position, they B) DETAILED STEWARDS’ return to a more accessible location and nearly all meet face-to-face to question REPORTS SHOULD BE jockeys and trainers throughout the race day. Findings are published at the end of the day. MANDATED These reports should include key details provided to the stewards from The world offers many compelling regulatory veterinarians. Observations of models of stewards’ reports to emulate, bleeding, lameness, thrown shoes, reasons as we outlined in our August 2019 paper. for scratches and voided claims must Stewards’ reports in most North American be published. Strange or unexplainable jurisdictions fall far short of what is needed performances should get attention from and many don’t bother at all. the stewards and be shared with the public. The goal of such reporting is simple – American racing cannot jump to the instill confidence in racing’s participants, future and join the rest of the world with especially horseplayers. Lasix-free racing without the adoption of When bettors are left bewildered by rides other key global standards of reporting or horse performances, and no explanations which are commonplace. are ever provided by those whose job it It may be hay, oats and water before a is to oversee the races – the stewards – race, but after a race, the public must be confidence is shattered, conspiracy theories made aware of key observations from run amok and the business is tainted by regulatory veterinarians whose roles

55 TIF REPORTS: WAGERING INSECURITY are crucial for both equine welfare AND protection of the wagering public. This level of transparency is standard Lingfield Park, Great Britain in other major racing jurisdictions. North – March 6, 2021 America should be no different. Anyone Race 4 - 1:25pm. suggesting otherwise should be asked why. THE BETWAY HANDICAP STAKES The following examples, one from the (CLASS 2) British Horseracing Authority and one from the National Horseracing Authority of Following the race, Ben Curtis reported Southern Africa (South Africa) reflect the that MARNIE JAMES, unplaced, was reports published from separate races in never travelling and the Veterinary 2021, with details from regulatory veterinary Officer reported that a post-race officials. examination of the gelding failed to reveal any abnormalities. Greyville Racecourse, Race 5 - 2:00pm. THE GET YOUR LADBROKES DAILY South Africa ODDS BOOST SPRING CUP STAKES May 5, 2021 – Race 4 (CLASS 1) (Listed Race) (All-Weather Championships Fast-Track Qualifier) a) VOICE NOTES raced with a tongue tie (advised 01.05.21/10h19). Permission was given for MEGALLAN b) ASHFORD CASTLE raced to wear a red hood to post. without a tongue tie (advised 04.06.21/09h46) Martin Harley, the rider of the winner, c) MIND SET raced with alumites, APOLLO ONE, was suspended for 2 and an alumite bar shoe right front days for using his whip above the (advised 30.04.21/08h31). permitted level from 1 1/2 furlongs out. THE VETERINARY SURGEON Race 6 - 2:36pm. REPORTED: THE BETWAY NOVICE STAKES a) DI MAZZIO (AUS): Bi-lateral (CLASS epistaxis – confirmed 60-day suspension. Nothing to report b) WINTER WAVE: Returned post- race having cast the left front shoe. Race 7 - 3:11pm. c) SIR POM: Lame left front. Vet THE BETWAY CASINO HANDICAP certificate required prior to re-entry. STAKES (CLASS 6) d) BEDAZZLED JOKER: Couging. Following the race, the Veterinary SCRATCHINGS: Offifer reported that FIRST VOYAGE a) MAGIC SAILOR: Injured right front (IRE), unplaced, had bled from the (Trainer – 03.05.21/09h00). Rule nost and that GIBRALTARIAN (IRE), 53.5 applies. unplaced, had lost its right fore shoe.

56 TIF REPORTS: WAGERING INSECURITY Just a few hours after Breezy Gust’s BREEZY GUST unexplained performance, Golden Mission was sent postward as the 2-1 favorite in A race at Pimlico on the 2021 Preakness the first race at Sha Tin in Hong Kong. Stakes undercard highlights the failings of Under leading jockey Joao Moreira, the the present system. gelding was under pressure early in the Breezy Gust was the 5-1 third choice in race and faded substantially to finish 11th that day’s Grade 3 Maryland Sprint Stakes, of 12, beaten nearly 15 lengths Click to his first start in graded stakes company. view the replay. Claimed for $25,000 in October 2020, The stewards sought to inform the Breezy Gust had about three months off public about the performance. The post- before returning for new trainer Daniel race report included just about everything Velazquez to win three consecutive races a horseplayer, or any other interested party, by a combined 18.25 lengths with a might want to know about Golden Mission’s monumental improvement in his Beyer disappointing run. Speed Figures and practically every other “Despite being ridden along for some measure used to assess performance. distance in the early stages, GOLDEN The gelding has a propensity to lead his MISSION (J Moreira) was slow to muster races early, or at least be forwardly placed. speed and travelled wide and without cover Those tactics were executed in each of his until approaching the 600 Metres and in the four starts for Velazquez, whose horses Straight gave ground. were winning at a 24% clip in 2021 to that “After the race, J Moreira stated that point. GOLDEN MISSION did not travel strongly Breezy Gust was judged the best turned at any stage of the race and felt “flat”. A out in the paddock prior to his race. That veterinary inspection of GOLDEN MISSION would be the only recognition he received. immediately following the race including The chart comment from the Maryland an endoscopic examination showed a Sprint Stakes notes the following. substantial amount of blood in the horse’s “BREEZY GUST, pinched back leaving the trachea. starting gate, was pulled up near the half “The performance of GOLDEN MISSION, mile pole and walked off.” favourite for today’s race and which finished A view of various replays of the race towards the rear of the field, was considered (replay) showed a slight brush at the start, unacceptable. Before being allowed to race but Breezy Gust was seemingly uninterested again, GOLDEN MISSION will be required to in running – the exact opposite of what he perform to the satisfaction of the Stewards has shown in recent races, exhibiting no in a barrier trial and be subjected to an official early speed. veterinary examination. No official record of the state A post-race sample was also collected veterinarian’s findings, or an explanation from Golden Mission. By the next race day, provided to the stewards by the jockey, the stewards reported the sample showed were provided to the public after the race. no adverse findings. Other jurisdictions do it differently. North American jurisdictions may never

57 TIF REPORTS: WAGERING INSECURITY rise to the level of Great Britain, South Africa provide expert witness statements forming or Hong Kong. But they need to try. “Pulled part of the evidence in sports disciplinary up and walked off” does not cut it. hearings (i.e. against a jockey charged with corruption offenses). The betting analysis can make up a key part of the evidence in C) INTEGRITY PLATFORMS sports disciplinary hearings and therefore expert evidence is often required to explain AND BET MONITORING findings.” As outlined in Part 10 of this series, an CAPABILITIES SHOULD awareness of the grey and illegal markets where betting occurs is also needed. BE CREATED. Worldwide wagering on your races requires worldwide awareness of the threats racing The Asian Racing Federation’s Council faces. on Anti-Illegal Betting and Related Financial Fixed odds betting on U.S. racing for Crime (ARFCAIB) identifies several “good domestic customers, should it occur, practices” in monitoring betting, all of will introduce a different mix of betting which should be adopted. businesses to the sport. Commercial “Critical components of a dedicated bookmakers need to uncover betting betting integrity team are a structured malfeasance. There is no benefit to burying approach and a specialized central it. monitoring team, made up of experienced In December 2020, Australian firm The industry professionals who proactively BetMakers purchased the global tote assess and analyze betting information. business of Sportech, one of three tote These teams should comprise personnel companies providing services for North with specialist skills such as form experts, American racing. The BetMakers already race readers and statisticians, all with provides integrity services for Racing extensive betting knowledge and expertise Victoria, the regulators of racing in that and an understanding of the intelligence Australian state, through their Racing process. Victoria Integrity Platform (RVIP). “Direct communication between the RVIP is in use across Victoria’s sport and the betting industry supports the more than 500 annual race meetings, flow of relevant information to the analysts. monitoring betting and serving as a portal In-house betting expertise strengthens for centralized reports for use by racing the productivity of these relationships and integrity officials. avoids the misinterpretation of betting information. Regular communication According to this press release in 2019, between analysts and betting operators RVIP capabilities include: strengthens trust and understanding, • Real-time tracking of data, such as which increases the flow of information to price movements and associated the sport. betting patterns, “Betting experts may be required to • A host engine that ingests ratings

58 TIF REPORTS: WAGERING INSECURITY and performance indicators regarding officiating of games in a world created by the racing authority and where legal wagering is driving additional BetMakers, and matches these with revenue streams. Leagues provide access actual performances, to game officials for media members, • An alerts system to flag publish head-office reviews of in-game inconsistencies, incidents and their officiating, and have • Database and library functionality even admitted mistakes in past rules that stores and recalls any integrity applications. The use of replay to adjust comments associated with key officiating decisions, yielding more individual horses, trainers, jockeys, correct outcomes, has greatly increased. owners and wagering movements, In March, the National Hockey League • Video analysis and management (NHL) fired a long-time referee after a portal for tracking past microphone caught him admitting he performances, and felt the need to, essentially, fabricate a • Links to betting patterns and penalty on one team. The Athletic’s Sean comments for recording and recall Gentille called on the NHL to adopt a capabilities. more transparent approach to officiating North American racing needs this kind like the NBA. of platform. “If they want an example, they can look As a new service provider in the at the NBA. Shielding refs – coddling refs, American space, The BetMakers may in fact – only creates space for conspiracy have a significant role to play. Their first theories. Which, as we’ve learned, are foray into American racing has been in sometimes true. Come up with an NHL partnership with Monmouth Park to bring version of the [NBA’s final] two-minute fixed odds betting on racing to New Jersey report. Make officials explain themselves customers. when the situation calls for it. Hold them accountable in a real, public way. If you’re trying to fix anything, say so. Virtually D) INTEGRITY every other big-time sport does this… “The elephant in the room…is gambling.” IMPROVEMENTS FROM Some professional leagues, pro teams, collegiate conferences, universities, OTHER PROFESSIONAL regulators, betting operators and technology providers are working with SPORTS SHOULD BE private integrity assurance firms, like U.S. Integrity, to provide services to monitor ADAPTED TO RACING everything from betting markets to social media and irregular officiating. Professional sports leagues, including As for American racing? Well, no, but the National Basketball Association (NBA) it isn’t because groups like U.S. Integrity and National Football League (NFL) have weren’t trying. been expanding their public interactions The growing firm met with one major

59 TIF REPORTS: WAGERING INSECURITY American racing operator in 2017. U.S. than what has been done with a woefully- Integrity’s Chief Executive Officer Matthew inadequate state-by-state approach. Holt shared the experience with TIF. Racing in America in the 2020s has a “They told us better integrity does regulatory structure more akin to the not help us bring in more customers and sport as it was in the 1970s. their main focus right now is on growing That has to change and HISA enables the customer base. There was no desire such change. to connect pari-mutuel systems to any Change, of course, frightens many sort of integrity provider.” long-time racing participants. There will Holt made it clear if the racing industry be increased costs, new procedures and has interest, U.S. Integrity remains added scrutiny. Communication will be available. key. In Australia, sports and racing actually It is easy to fret over how much work together in developing a modern transparency is enough, but North approach to bet monitoring. American racing desperately needs it In 2018, Racing Victoria and the while upgrading our provision of racing Australian Football League (AFL) formed oversight in every facet. A delicate balance a joint venture – Sports Wagering is required to satisfy integrity assurance Integrity Monitoring Ltd (SWIM) – to and boost public confidence while not introduce transaction-level bet monitoring jeopardizing ongoing investigations or platforms across the sporting landscape. revealing specific trade practices. The launch of SWIM was a response to As former U.S. Supreme Court Justice the Wood Review, a nationwide study Potter Stewart famously expressed in (a full copy can be reviewed here) of a 1964 opinion related to a case about Australia’s sports integrity arrangements obscene material: “I know it when I see it.” commissioned by then Prime Minister What exists in North American racing Malcolm Turnbull. at present is not only not “it,” but is far The goal, of course, is to ensure a level from the standards of transparency that playing field, both during the game or race are needed to operate a professional for participants and in the betting markets sport to meet the expectations of on such events, maintaining confidence modern betting customers in 2021. The of all internal (teams, coaches, players, recommendations offered in this series owners, management) and external would yield substantial, desperately (bettors and fans) stakeholders. needed changes to the operation of American racing, but they are hardly ground-breaking - almost all of them are STEWART’S RULE in place in major international racing jurisdictions. No group of well-intentioned racing With practical examples from abroad stakeholders should be against any of the for the North American racing industry recommendations offered. HISA provides to follow, change may be within a more an opportunity to accomplish far more reasonable reach than many might realize.

60 TIF REPORTS: WAGERING INSECURITY NOTE

On March 15, 2021, the National On April 26, 2021, the states of Horsemen’s Benevolent and Oklahoma and West Virginia, Protective Association and 11 of their racing commissions, three its smaller state affiliates sued Oklahoma racetracks, United members of the nominating States Trotting Association and committee of HISA and the others, filed a separate suit. Commissioners of the Federal Both suits are pending as of Trade Commission (FTC) in an July 2021. attempt to stop HISA’s launch. Part TWELVE PRAVDA In this final installment of “Wagering Insecurity,” we make four observations which have become clear. These are the product of input from many individuals, both named and anonymous, whose support throughout this series and whose assistance made it possible. The Thoroughbred Idea Foundation supports the growth of the North American Thoroughbred racing industry. We want more horseplayers and more horse owners. That sort of future is impossible without beginning the process of adopting the recommendations offered previously and considering the Photo: Thoroughbred Idea Foundation observations below. “Man Controlling Trade” - FTC Headquarters, Washington, D.C.

61 TIF REPORTS: WAGERING INSECURITY In one corner, one-trillionth of a gram can OBSERVATION #1 be measured. Penalties may be assessed because of that microscopic finding. In Medication use has dominated public another corner, jockeys and trainers go discourse on North American racing unquestioned about in-race decisions or integrity over the last three decades. The tactics, state veterinarians are not required history is long and contentious. to report publicly any episodes of bleeding For context, the 2021 Kentucky Derby or lameness noticed after a race or provide was the first run since 1985 where the reasons for scratches and voided claims, entire field ran without Lasix. Five years thrown shoes, or other measures which are after that, the topic was front and center standard across the rest of the racing world. on Derby Day as exemplified inthis video of That gap needs to be closed. the 1990 Kentucky Derby broadcast, where Al Michaels and Dave Johnson spoke of a Jockey Club study about the potential impact of Lasix use. OBSERVATION #2 Michaels said it would be a story to follow throughout that summer. Regardless North American stewards fall short of of the study’s specifics, it took more than those in the rest of the developed racing three decades for action. world. The blame resides with the regulators Anti-doping control programs are a and track operators (yes, sometimes necessary component of a broader suite of stewards are hired directly by the tracks) integrity measures. But balance is needed; who have allowed these roles to degrade progress must be shown in other areas of over time. the integrity arena, too. They have less training, are paid less There are many factors which have and have not been given responsibilities contributed to North American racing’s commensurate with the worldwide issues with doping, including a weak expectations for such positions. As many regulatory structure, a laissez-faire culture veterans of the stewards’ stand and other about drugs and a general failure to be officials have retired, their replacements are active overseers of the sport, protecting the often even less prepared. betting public. A positive development in this space One area where racing has gotten it right came in August 2019 when the Jockey Club is in constantly improving thresholds of and Racing Officials Accreditation Program testing. A wealth of well-educated experts announced the launch of a global exchange has ensured that as science and testing program which would give North American improve, racing’s approach to testing stewards the opportunity to learn and evolves as well. practice in other countries. The pandemic But the contrast with other forms of delayed implementation, but the program racing’s integrity infrastructure should not should be embraced as the world reopens. be lost. The Horseracing Integrity & Safety

62 TIF REPORTS: WAGERING INSECURITY Authority (HISA) presents a vehicle for media in North America. uplifting these standards. While racing has several influential TIF founder Craig Bernick is hopeful trade publications and broadcasts with HISA evolves to tackle these issues, and the some very talented, knowledgable staff opportunities raised in Part 11 of this series. which contribute significantly to the sport, “This time, it actually feels different. HISA mainstream, independent coverage is offers racing a unique opportunity because practically non-existent. it has superseding power over existing Steve Crist, former publisher of the Daily industry organizations. Racing Form, lamented the state of racing “Past efforts to reform our sport have coverage in March 2021 remarks to TIF for failed because of two main reasons – either this series. the groups or organizations involved were “Anyone from the outside who has seen not empowered to effect change or those the evolution of coverage of the sport can involved were too focused on their own say that the kind of journalism which existed, bottom line or retaining some semblance of even 10 years ago, is just not being done. control.” “This is a huge issue. It’s nearly impossible While many horse and racetrack owners to hold anyone accountable for anything.” may have enjoyed slot-supplemented Crist recalled a time when he was a young revenues and purses over more than reporter for the New York Times in the early the last two decades, additional funding 1980s, covering the ongoing hearings and has not found its way to racing’s integrity legal wranglings around race-fixing from infrastructure and the neglect shows. the 1970s. The coverage was endless, Crist Several stewards and racing officials recalls. consulted during TIF’s research for the “I was working for the Times and there “Wagering Insecurity” series, who all were three other racing beat reporters requested anonymity to speak forthrightly, from each of the tabloids doing the same. shared examples of poor working Everyone wanted to be first.” conditions, obsolete technology and His work included eye-popping ledes, like general concerns over their ability to do the following from a 1981 piece: their job well at present. “A former New York-based trainer has Uplifting standards will not be cheap, identified Jacinto Vasquez, a leading rider but the cost of not improving will be far who has twice won the Kentucky Derby, as greater for everyone who makes their living the man who offered the jockey Mike Hole a in racing. $5,000 bribe to hold back a horse at Saratoga in 1974, according to a deposition given to the State Racing and Wagering Board.” Adjusting for inflation, a $5,000 bribe in OBSERVATION #3 1974 would be about $26,000 today, the equivalent jockey’s cut for winning a race A troublesome factor which belies all with a purse of more than $400,000. of the detail shared in this series is the Most public racing coverage is restrained absence of a robust, independent racing because advertising dollars come from

63 TIF REPORTS: WAGERING INSECURITY within the industry itself. Mainstream the freedom to hold the business to a higher coverage, when it happens, is often fleeting. standard than at present. Crist thinks this is dangerous for a sport In the long run, the truth benefits the whose foundation is grounded in wagering. greatest number of stakeholders. “A media outlet in racing should not be compared to a propaganda machine like Pravda from the old Soviet Union, but in at least one case, that’s what we now have.” OBSERVATION #4 The line between journalism and publicity has been increasingly blurred. The overall wagering space is changing Industry publications are hard-pressed rapidly. Fixed odds betting for racing in to hold tracks, tote companies, ADWs and North America is a necessity for one key other-related organizations accountable reason – all new betting customers expect for the degradation of the sport’s integrity to know what price they are getting on infrastructure when those same entities their bets. While pari-mutuel betting still are their primary source of income through has a future, particularly in exotic wagers, advertising. Years ago when he was with the the tote monopoly which has existed for New York Times, Crist and his mainstream generations on U.S. racing is coming to an media colleagues were in those roles. end, as it should. Today, coverage is mostly limited to the The tote protocol in use now, relying trades. on a decades-old approach known in the Several racing writers and broadcasters industry as ITSP, is likely on its way out. questioned by TIF acknowledged these Global commingling is more important issues are ever-present in their daily work. than ever and TIF has learned from They all asked to remain anonymous several major players in the pari-mutuel because of a fear of reprisal from their wagering technology space that a much- employers and contacts within the revised modern system of bet processing industry. Staffing within industry media and information sharing will be needed. has contracted substantially in recent Support for antiquated tote technology is years, reducing the opportunity for deep fading fast. coverage. Those in place are doing the best Customers must still be protected in the they can with what they have, but it is a interim, and whatever new systems are delicate balance. One said the situation has developed should have proper oversight devolved to such a degree that they know measures at its core. instinctively what topics are off-limits. Criticism about the industry’s integrity failings and other myriad issues could come at significant cost to racing media. OPPORTUNITY Those with substantial investments in The “Wagering Insecurity” series is unlike horses, farms, associated agribusiness and anything we have researched and published other economic drivers of the sport should at the Thoroughbred Idea Foundation. We recognize that racing media must be given

64 TIF REPORTS: WAGERING INSECURITY hope lessons can be learned from it. Racing must be operated more “TIF was created to improve the prospects sustainably than it is now and we need to of horse owners and horseplayers, whose adopt the measures recommended here, participation fuels racing’s sustainability,” and others, to bring the industry forward. said Bernick. The path to better securing racing’s “We have focused on issues related to wagering business is challenging and pricing, transparency, technology and access getting there will require exposing some to data. Racing has huge obligations too – long-standing failings. now more than ever: aftercare, backstretch For sports and racing integrity expert programs, jockey health and equine research. Jack Anderson, there is no choice. The best way to meet these obligations and “In the immediate, U.S. racing needs to look sustain the business is to grow revenue within. It needs to consult and review its own through wagering. Doing so will be impossible stakeholders and undertake a clear-eyed, hard- without the greater industry accepting the headed analysis of the state of the sport. serious issues raised and recommendations “That process may be a painful one. It provided by this series.” may shock the racing public. It may, in the Ensuring integrity in horse racing takes short term, undermine the reputation of the a team effort. It’s hard work. And it requires sport even amongst the most sympathetic drive and support from horse owners, of its supporters in the wider American breeders, racing fans and most especially, sporting public.” the customers who need the most These improvements are needed to significant protection – the horseplayers. make North American racing better, to It will take significant capital from the sustain the interest of bettors and secure greater industry, investing in the appropriate the substantial investments of owners and resources to build an acceptable standard breeders, as well as the reach of racing’s of integrity oversight. That does not go economic impact. unnoticed. Under no circumstances should The role of the Horseracing Integrity the costs for such programs come from & Safety Authority offers a tremendous increasing takeout – the cost of betting. opportunity for ALL parties in the sport going There would be no more counterproductive forward and should be leveraged in every effort than that. capacity to yield much-needed, uniform The long-term costs to racing and its control over the integrity of U.S. racing. As stakeholders’ investments, if we do not previously outlined, HISA is required to report upgrade racing’s integrity infrastructure, to the Federal Trade Commission. will be far more substantial than the short- Outside the FTC’s Washington D.C. term costs of filling those needs. headquarters are a pair of sculptures We must restore and build confidence created by Michael Lantz in 1942 entitled in existing horseplayers and horse owners, “Man Controlling Trade.” Each sculpture which will help us attract future customers. depicts a man holding a horse. Little that racing in North America is doing Our collective opportunity for improvement now will accomplish that, particularly given is real. There are countless examples for our general embrace of opaque practices. North American racing to follow.

65 TIF REPORTS: WAGERING INSECURITY Appendix

NASHASHUK (V143) – Race 3 (745) 21 June 2017 Happy Valley Racemeeting 03/07/2017 12:04 In accordance with the usual practice of The Hong Kong Jockey Club, urine and blood samples were obtained from all winning horses at the Happy Valley racemeeting on Wednesday, 21 June 2017, including NASHASHUK, which was successful in the Ninepin Group Handicap. The Stewards have today received a test report issued by the Head of Racing Laboratory, Dr T S M Wan, advising that the post-race urine sample taken from NASHASHUK on analysis has shown the presence of etofenamate and flufenamic acid. Mr J Size, trainer of NASHASHUK, has been advised of the analyst’s findings. A preliminary investigation conducted to ascertain the circumstances that may have resulted in the finding has established that etofenamate and flufenamic acid are not contained in any registered veterinary products in Hong Kong, but that etofenamate is a constituent of a number of registered human preparations. The initial investigation also revealed that a stable assistant, who was attending to NASHASHUK at the relevant time, reported using a registered human preparation containing etofenamate, which is known in a number of species to be metabolised to flufenamic acid. The relevant medication has been surrendered to the Stewards as part of the investigative process. The investigation is ongoing and no confirmation as to the source of the finding has been determined at this time. A further release will be issued at the appropriate time.

NASHASHUK (V143) - Race 3 (745) - 21 June 2017 Happy Valley Racemeeting 13/07/2017 17:36 Further to the press release which was issued on 3 July 2017, Laboratoire des Courses Hippiques has been selected as the official racing laboratory to perform confirmatory analysis of the referee (B) urine sample obtained from NASHASHUK after being successful in the aforementioned race. Depending on the findings of the selected official racing laboratory in respect of the referee (B) urine sample, an inquiry into this matter will then be conducted. This would take place after the commencement of the 2017/2018 racing season to ensure the availability of the connections of NASHASHUK and other persons who may be called to give evidence at the inquiry. Accordingly, this matter remains adjourned until a date to be fixed.

NASHASHUK (V143) - Race 3 (745) – 21 June 2017 Happy Valley Racemeeting 28/08/2017 17:45 Further to the press release which was issued on 13 July 2017, the Stewards have been advised that the confirmatory analysis of the referee (B) urine sample obtained from NASHASHUK after being successful in the aforementioned race has been found to contain

66 TIF REPORTS: WAGERING INSECURITY etofenamate and flufenamic acid. Mr J Size, trainer of NASHASHUK, has been informed of the referee laboratory’s findings. The inquiry into this matter remains adjourned to a date to be fixed. A further release will be issued at the appropriate time.

Adjourned Inquiry - NASHASHUK 15/09/2017 16:38 The inquiry into the analyst’s report in respect of the post-race urine sample taken from NASHASHUK after that horse was successful in the Ninepin Group Handicap conducted at Happy Valley Racecourse on Wednesday, 21 June 2017 which was found to contain etofenamate and flufenamic acid will be held at the Happy Valley Inquiry Room on Tuesday, 19 September 2017 at 10:30 am.

“NASHASHUK” INQUIRY 19/09/2017 17:20 The Stewards today concluded their inquiry into the analyst’s findings in respect of the post- race urine sample taken from NASHASHUK after that horse was successful in the Ninepin Group Handicap at Happy Valley Racecourse on Wednesday, 21 June 2017. Evidence was today taken from Mr J Size, the Trainer of NASHASHUK and who represented the interests of the Owners of NASHASHUK, Dr T S M Wan, Head of Racing Laboratory, and Dr P Curl, Executive Manager, Veterinary Regulation. Evidence was also taken from a Stables Assistant allocated to Mr Size’s stable and who attended to NASHASHUK on the day on which it raced. Dr Wan had previously advised that the pre-race urine sample taken from NASHASHUK on the morning of the race in question did not contain etofenamate and flufenamic acid, however, the post-race urine sample taken from the horse was found to contain both substances. Dr Curl provided evidence to the inquiry that etofenamate and its metabolite flufenamic acid are capable of acting on a number of systems of a horse and as such are prohibited substances in accordance with the Rules of Racing of The Hong Kong Jockey Club. Mr Size accepted that etofenamate and its metabolite flufenamic acid are prohibited substances in accordance with the Rules of Racing and that the urine sample taken from NASHASHUK after the race in question showed the presence of those substances and that established protocols had been observed in respect of the taking of the sample. Rule of Racing 138 (1) and (2) provides that any horse shall be free of any prohibited substance on the day on which it has been declared to race (i.e. race day), until such time as the Stewards release such horse after it has raced and that in the event of a sample taken from any horse during this period being reported as positive to a prohibited substance such horse shall, in the case of a post-race sample, be disqualified for such race. Accordingly, NASHASHUK was disqualified from the Ninepin Group Handicap and the placings amended to No. 8 FOX SUNTER, 1st; No. 5 PHANTOM FALCON, 2nd; No. 2 TRAVEL SUCCESSOR, 3rd; No. 9, GOLDEN DEER, 4th; and No. 7 LEOWL, 5th. Mr Size was advised of the owners’ right of appeal against the decision to disqualify NASHASHUK from this race.

67 TIF REPORTS: WAGERING INSECURITY When undertaking a preliminary investigation into this matter following the Stewards initially having been made aware of the analyst’s findings, it was established that etofenamate and flufenamic acid are not contained in any registered veterinary products in Hong Kong but that etofenamate is a constituent of a number of registered human preparations. The investigation found that the Stables Assistant, who was attending to NASHASHUK at the relevant time, used a registered human preparation which contained etofenamate, such substance being known to be metabolized to flufenamic acid. Analysis of a sample of the human preparation by the Club’s Racing Laboratory confirmed that the preparation contained etofenamate. The Stables Assistant informed the inquiry that he had applied the relevant medication in the days prior to NASHASHUK competing in its race so as to treat an ongoing soreness condition. The Stables Assistant subsequently agreed to provide a sample of his urine for the purposes of analysis to establish whether the sample contained etofenamate and flufenamic acid. It was subsequently confirmed by the Club’s Racing Laboratory that the urine sample did contain etofenamate and flufenamic acid. Having considered all the evidence before them, the Stewards formed the opinion that the findings of etofenamate and flufenamic acid in the post-race urine sample taken from NASHASHUK on 21 June 2017 were as a result of inadvertent contamination caused by the Stables Assistant who attended to the horse on that day. A report will be forwarded to the Club’s Stables Management Department regarding the Stables Assistant’s role in the findings of etofenamate and flufenamic acid in the urine sample taken from NASHASHUK and which ultimately led to the horse’s disqualification from the stated race. Rule of Racing 140 (2) provides that in the event of a sample taken from a horse during the specified period being found positive to any prohibited substance, the trainer of such horse bears the onus of proving that he did not administer or cause to be administered the prohibited substance detected, and that he had taken all proper precautions to prevent the administration of the prohibited substance. Mr Size was advised that as the Stewards had formed the opinion that the findings of etofenamate and flufenamic acid in the urine sample taken from NASHASHUK on 21 June 2017 were as a result of inadvertent contamination caused by the Stables Assistant who attended the horse at the relevant time, they were satisfied that he did not administer or cause to be administered etofenamate and flufenamic acid to NASHASHUK. Having regard to the evidence provided to the inquiry by Club Officials who conducted the preliminary investigation that there was signage informing of steps to be taken to prevent inadvertent contamination in two common areas of Mr Size’s stable at the relevant time and the ongoing education of stables staff in respect of measures to be taken to avoid cross-contamination between humans and horses, the Stewards were of the opinion that the findings of etofenamate and flufenamic acid in the urine sample taken from NASHASHUK had not resulted from any failure, omission or neglect on Mr Size’s part and therefore, in the circumstances of this case, the Stewards were satisfied that Mr Size had discharged his responsibility under the Rules of Racing in respect of the analyst’s findings. Accordingly, no further action was taken against Mr Size in respect of this matter.

68 TIF REPORTS: WAGERING INSECURITY