November, 2022 | Horse Racing Free Tips

TIF: ‘Races With Smaller Pools And Uncompetitive Entrants Invite Manipulation’

Since the Thoroughbred Idea Foundation published its piece on pool manipulation at Gulfstream Park, TIF has received a plethora of questions and comments about it. We have summarized them into eight questions below and, hopefully, provided some additional insight and context with your answers.

If you have more, don't hesitate to contact TIF using this form.

1. How often has pool manipulation occurred?

TIF has recorded dozens of manipulation incidents in recent months. Another incident occurred Saturday, November 19th, after the publishing of our story, in the second race at Laurel.

It appears about $5,000 was bet to show on a 17-1 longshot who finished last in a field of five, and all in the 30 seconds before the race. The total pool ended up at $9,248, the longshot finished last and the show payouts were likely twice the anticipated return.

Races with smaller pools and uncompetitive entrants invite manipulation.

2. Why do you hate the quinella? I loved betting it and now it's gone. Thanks a lot.

TIF does not hate quinellas.

The horse racing public simply does not embrace them.

On November 11, Gulfstream's exacta pools averaged $93,000. The quinella pools for the eight unmanipulated races that day averaged just over $4,000.

Small pools are ripe for manipulation. TIF's call to eliminate the quinella at Del Mar and NYRA is all about pool size and not some aversion to the quinella. These are not popular bets at American horse tracks no matter how long they have been around.

3. I understand something strange happened, but can you explain it simpler? Give us a step-by-step of what the bettor who did this was doing?

Here is a generic re-creation of what may have happened.

Step 1: One or more bettors place a series of quinella bets across various offshore sites covering a range of logical outcomes. The eventual winning 2-6 quinella combination would have been one that was covered since these two horses were first and second-favorite.

The offshore sites take these bets and book them, that is, the bets do not go into the parimutuel pools. Instead, the offshore site(s) accept the risk if the bet is successful and keep the proceeds if the bets lose. These sites share no revenue with racetracks or horsemen.

Given their risk, the sites often limit the amount a customer can win from any one bet. As a result, to maximize the value of the manipulation, one would want to place bets across many different accounts.

Step 2: Once the offshore bets are placed, one or more bettors then prepare to place the bets that will manipulate the pools. These are bets intended to lose and are placed on one or more combinations involving overmatched horses.

In this case, the bettor/s chose to focus on eventual 43-1 longshot Miss Grand Slam, placing a series of bets using Miss Grand Slam with every other horse in the race. These bets are usually placed through an ADW account. In TIF's series “Wagering Insecurity,” we wrote about multiple incidents of quinella pools at Will Rogers Downs being manipulated in the spring of 2021. An investigation by the Oklahoma Horse Racing Commission found that the manipulating bets originated at both TVG and Xpressbet.

4. Is this illegal?

Mostly not.

Customers participating in the legal, regulated pari-mutuel pools can bet as they see fit. ADWs often monitor accounts for unusual or suspicious activity and retain the right to close accounts for any reason, per their terms and conditions.

For an American, transmitting funds to an offshore entity for the purpose of betting is likely illegal. Most laws governing this are seldom enforced, but of course, could be.

However, for residents of some jurisdictions around the world, the entire act is legal, including the bet with an offshore site booking bets and paying based on the pari-mutuel outcomes.

5. How does it get stopped?

Offshore or unregulated betting will almost never be stopped, but it can be slowed. The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) helped that by making it difficult for the offshore sites to send money to customers.

A robust, attractive legal market is the best option for combatting this behavior.

TIF believes the best path forward for racing is to ensure legalization of ADW betting in as many states as possible, and for track operators to only offer bet types with pools large enough to discourage manipulation.

That ADW betting is not a legal option for residents of Georgia and Texas, amongst others, remains a failure and encourages residents of those states to use offshore options.

6. So, who was harmed? The 2-6 quinella paid far more than anyone would have expected.

The situation seems almost victimless, except for the offshore sites that may have had to pay winners. But these wagers' success relies on a horse losing, not winning. This may well give participants incentives to co-opt participants in the race to help ensure that outcome.

Manipulated pools undermine confidence in the integrity of the betting product.

Each additional “successful” incident serves as an advertisement for more manipulation in the future. That's bad for racing.

7. What happened with the final pool update? Why did the prices change so late?

According to officials with 1/ST Racing and Gaming, there is no evidence the pools closed late for this race.

They attributed the delay in posting prices to a “communications network issue that started before this race that caused multiple guest hubs, foreign and domestic, to be delayed by as much as 81.37 seconds to receive final pools.”

This happens on occasion, and while such a delay is not past-posting, the appearance is terrible.

American racing bettors are accustomed to late changes normally given the proliferation of computerized robotic wagering (CRW) – that is, algorithms used by professional betting syndicates which place massive batch bets in the final seconds of betting. Most often, those bets do not get reflected publicly until the after the start of the race.

What was unusual about this incident was the combination of the manipulation with a delay in reporting the final prices. It appears that among the last cycle of bets included a legitimate 2-6 quinella, which dropped the overall payout from $81 to $42. This bet likely came from a CRW-entity.

8. If pool manipulation has been on the rise lately, what do you think is really driving that?

One of the places you can reliably spend cryptocurrency is an offshore, unregulated betting site. Many of them incentivize customers to use cryptocurrencies to make deposits and take withdrawals.

Dr. Nicholas Weaver, a researcher at Cal-Berkeley's International Computer Science Institute and expert on cryptocurrency, does a fabulous job of explaining cryptocurrency in a February 2022 lecture:

“Cryptocurrencies don't work as a currency unless you are a criminal. The entire space is a self-assembled Ponzi scheme.”

A Q&A with Weaver from Current Affairs offers more insight.

As it relates to wagering, a May 2021 report from the Asian Racing Federation's Council on Anti-Illegal Betting & Related Financial Crime (ARF Council) noted the rise in such funding methods to facilitate betting.

“As a measure of the growth of cryptocurrency in betting, Bitcoin is now accepted on at least 127 offshore sports betting websites and 284 online casinos, which is a seven- and 13-fold increase respectively since 2018…In addition to Bitcoin, at least 780 offshore websites accept one or more of the five largest cryptocurrencies.”

Tutorials explaining how to open crypto accounts and use them on the offshore interfaces simplify the process.

“All of these features are attractive to bettors and operators in jurisdictions where online betting is illegal and/or restricted,” wrote the ARF Council.

“Regulators in many jurisdictions have also been slow to keep up with the growth of blockchain, creating loopholes exploited by organized crime. International law enforcement and anti-money laundering bodies have highlighted that blockchain and cryptocurrencies facilitate illicit activities including illegal betting and money laundering.”

The post TIF: ‘Races With Smaller Pools And Uncompetitive Entrants Invite Manipulation’ appeared first on Horse Racing News | Paulick Report.

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Ask Your Veterinarian Presented By Kentucky Performance Products: Dr. Larry Bramlage On Bisphosphonates In Young Horses – Where Are We Now?

Veterinarians at Rood and Riddle Equine Hospital answer your questions about sales and healthcare of Thoroughbred auction yearlings, weanlings, 2-year-olds and breeding stock.

Question: You first raised the alarm about the potential drawbacks of bisphosphonate use in young racehorses several years ago now. Where are we with these drugs now?

Dr. Larry Bramlage, Rood and Riddle Equine Hospital: In 2016, we began talking to our clients about a phenomenon that we were seeing more and more frequently in young racehorses. The problem was being seen in all common bone injuries that we encounter in the racehorse from dorsal cortical stress fractures to condylar fractures to the very common subchondral bone inflammation/bruising of the distal cannon bones. In some horses, orthopedic injuries were not healing or healing very slowly compared to what we expected. Clinical experience, retrospective studies of success rates, and published papers has given us pretty solid evidence of what to expect as the healing time with the treatment of the commonly encountered racehorse conditions. But suddenly some horses were taking three or four times the time expected to heal and a few never fully healed. The number of these slow healing injuries continued to grow during 2015.

As we began assessing the histories of horses where the aberrant healing was occurring, many had a history of bisphosphonate use as yearlings to improve the radiographs for sale or as a racehorse during a bout of lameness. So, we began discussing the findings and informing veterinarians, trainers, and owners of the possible detrimental side effect of bisphosphonate use. Veterinarians in many locations were making the same observations of disturbed healing and possible increased injury rates in young training horses of several breeds.

Bisphosphonates were approved in 2014. In 2015 we began to see storms of slow healing fractures and slow healing distal cannon bone subchondral bone inflammation/bruising. That led to the suspicion that bisphosphonates may be the reason.

Bone healing is a two-phase process. The bone bridges the fracture gap with new, poorly-organized bone that can be formed very quickly. Then it remodels the stabilized fracture back to the bone's pre-fracture architecture. Once the fracture gap is filled, the bone damaged by the fracture and the newly-deposited bone are removed and replaced with the appropriate trabecular or cortical bone, depending on the structure involved. This process involves two cell types — osteoclasts which remove bone and osteoblasts which make bone. As the osteoclasts remove the weak bone, the osteoblasts follow immediately behind to reconstruct the normal bone. The anatomy varies depending on which bone is injured and where it is injured, but bone is one of the few tissues capable of perfectly replacing itself when injured.

Bisphosphonates kill osteoclasts. It bonds to the surface of bone and when the osteoclasts try to remove the bone that needs to be replaced, they die after ingesting the bisphosphonate. This arrests the remodeling process and stalls bone healing by stopping the remodeling phase of healing. This is true for macro injuries such as fractures and for micro injuries which result from routine training. The injured bone can make new bone but it can't be remodeled without osteoclasts to clear the way for the osteoblasts.

Osphos, one of two bisphosphonates FDA-approved for use in horses four years old and up

So what good are bisphosphonates and why were they developed? Bisphosphonates were developed to arrest the hormone-driven bone remodeling which is common in post-menopausal women who get too little exercise. The hormonal driven remodeling removes an inappropriately large amount of bone and weakens the skeleton, especially the vertebrae, which when weakened can result in the “dowager's hump” spinal deformity. The bisphosphonates were given to prevent the removal of the bone by killing the osteoclasts.

But bisphosphonates also have another effect. They cause non-specific pain relief, analgesia, in bone. This led to their use to manage pain in bone tumors in people, especially in cancer of the spine. The mechanism is still unclear, but the analgesia is significant and non-specific so if you give it systemically it will help manage the pain no matter where the tumor is located. This analgesia led to the use of bisphosphonates to manage lameness in horses. The proposed mechanism is that it stops excessive bone remodeling in sites of lameness by arresting bone removal. Whether blocking bone re-absorption or a primary analgesia is the mechanism of action is still debated. The blocking of bone re-absorption led to use to try and increase the density in the skeleton by stopping bone loss to the remodeling process. So, bisphosphonates gained popularity to try to increase the density of bone in bone remodeling sites such as sesamoids and navicular bones. And, they became popular as the perfect lameness treatment; it is effective if the lameness originates in the bone, and you don't even have to know the site of origin.

But there is a price to be paid. Killing the osteoclasts prevented the normal bone remodeling necessary to maintain a developing skeleton (e.g., the young training racehorse). This retards adaptation to training, potentially increasing the susceptibility to injury, and it nearly arrests the remodeling process that is the second phase of bone healing in a fracture or in trauma to the bone.

The difficulty is if a horse is given bisphosphonates it binds to the interior surfaces of bone and can persist two years or more. So many horsemen weren't even aware, when a horse arrived for training, that there was a history of bisphosphonate use.

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To their credit, most horsemen and veterinarians quickly understood the risks of bisphosphonate use and the use rapidly declined over the next two years in young training horses. The drug still has a place in certain conditions in older horses, but it does not in the young training athlete. It can be dangerous to the horse's career and their resistance to injury. It is approved by the FDA for horses with navicular disease who are four years old or older.

So, where are we now? Sales companies and racing jurisdictions have stepped in and outlawed the use of bisphosphonates in most venues. Currently we still see an occasional horse with a fracture that shows disturbed healing but there is nowhere near the incidence of the problem that was occurring in 2015 and 2016. Veterinarians, owners, farm managers and trainers appear to have mitigated the use of bisphosphonates and should be credited with their response to protect the health and welfare of the horses. Sales companies and regulatory agencies have done their part and the current situation appears to be generally free from bisphosphonate use in the young growing and training horses. A horse that we suspect is showing signs of bisphosphonate treatment in the past still presents occasionally, but not regularly any longer. I suspect bisphosphonates are still intermittently used when a horse does not respond to common treatments.

To all of our credit, this has been a positive response to an initially unknown complication of treatment that was detrimental to the racehorse. For all of the things we wring our hands about that we have trouble changing, this is one we could, and did, circumvent for our good and for the good of our athletes.

Larry Bramlage is a 1975 graduate of the Kansas State University College of Veterinary Medicine (DVM) and received a Master of Science degree from Ohio State (MS) in 1978. He holds a Diploma of the American College of Veterinary Surgery (Diplomate ACVS).

Bramlage is an internationally recognized equine orthopedic surgeon, and is a senior surgeon at Rood and Riddle Equine Hospital in Lexington, Kentucky. He is a past President of the American Association of Equine Practitioners, and of the American College of Veterinary Surgeons.

In recognition of his dedication and contribution to Thoroughbred racing, Bramlage was awarded the 1994 Jockey Club Gold Medal for contributions to Thoroughbred Racing in the United States. He is also a past chairman of the Research Advisory Committee of the Grayson-Jockey Club Research Foundation and serves on the Board of Directors for that organization. His additional honors include the 1997 Tierlink Hochmoor Prize for his work regarding the internal fixation of fractures, the 1998 distinguished alumnus award from The Ohio State University, Alumni Fellow Award from Kansas State University, a British Equine Veterinary Association's Special Award of Merit, and the American College of Veterinary Surgeons Legends award for the development of the fetlock arthrodesis procedure for horses in 2009, and the Thoroughbred Club Testimonial Award in 2014. He has received the American Association of Equine Practitioners Distinguished Service Award twice. He was elected to membership in the Jockey Club in 2002 and to Distinguished Lifetime Membership in the American Association of Equine Practitioners in 2010.

The post Ask Your Veterinarian Presented By Kentucky Performance Products: Dr. Larry Bramlage On Bisphosphonates In Young Horses – Where Are We Now? appeared first on Horse Racing News | Paulick Report.

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Letters to the Editor: Ed Martin, President, Association of Racing Commissioners International

For well over a year, we have been told that the HISA Act was legally bulletproof and within the parameters of the US Constitution. According to a unanimous decision of a three judge panel from both political parties issued last week, such assertions may not be so.

The ARCI has not taken sides in this legal dispute, although some of our member agencies have as there are serious issues involving States rights, taxation without representation and commandeering that are at stake. The final outcome of the legal process may not be known for quite some time, creating an uncertainty for everyone involved with thoroughbred horseracing.

Conflicting legal opinions will determine what happens next in the individual States.

Some States, like California, will honor a written agreement they have executed with HISA to enforce their racetrack safety rules. Other States, upon the advice of counsel or Attorney General, will revert to state rules that remain on the books, not wanting to jeopardize the outcome of a court challenge to any enforcement action.

Not all states have written agreements. Many have sent letters informing HISA as to what they will or will not do. Those can be withdrawn or modified at any point if a State believes it's a roll of the dice as to whether enforcement actions will hold should the current ruling stand.

Last Friday, most US racing commissions participated in an emergency meeting convened by the ARCI. The commissions have and continue to work with HISA and HIWU representatives in a cooperative effort. While that will not change it should not be assumed that there are no concerns or limitations as to what an individual commission may or may not do.

What happens next is unknown and there currently is a storm cloud hanging over regulatory actions taken by HISA. It is not unreasonable to expect that those sanctioned for HISA crop rule violations will go to court as there now is reason to question the legality of the HISA Act itself.

We are but a few weeks away from when HISA plans to take over the anti-doping and medication control enforcement. That's huge and state regulators are concerned about whether a HISA drug violation levied after January 1, 2023 is valid if HISA itself is not legal.

Most State Racing Commissions believe the HISA Act is in need of modification to restore the financial, operational and rulemaking transparency and accountability this industry has now lost with the private entity. In addressing this Congress can eliminate the legal problems as well as mitigate the enormous cost about to be levied on the thoroughbred racetracks, owners, and horsemen. I was on a panel in August with Lisa Lazarus and proposed that HISA and its proponents get “everyone” in a room and reach an agreement in order to make this work to avoid the mess we are now in.

We should all be working together to salvage the many good things that can come out of this. But that might require an amendment to the HISA Act or short-term delay. Some people refuse to even consider that.

There are many who believe the current animosity of the US political divide is killing the country. We should not let that happen to this great sport.

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ARCI’s Martin: ‘Storm Cloud Hanging Over Regulatory Actions Taken By HISA’

The following statement was issued by Ed Martin, President, Association of Racing Commissioners International:

For well over a year we have been told that the HISA Act was legally bulletproof and within the parameters of the US Constitution. According to a unanimous decision of a three judge panel from both political parties issued last week, such assertions may not be so.

Conflicting legal opinions will determine what happens next in the individual States.

There are many who believe the current animosity of the US political divide is killing the country. We should not let that happen to this great sport.

The post ARCI’s Martin: ‘Storm Cloud Hanging Over Regulatory Actions Taken By HISA’ appeared first on Horse Racing News | Paulick Report.

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