Thoroughbred Racing Protective Bureau | Horse Racing Free Tips

TRPB: More Than 35,000 Thoroughbreds Now Have Digital Tattoos

Less than three years after announcing a transition from the legacy lip tattoo system to a more efficient and accurate horse identification method, the Thoroughbred Racing Protective Bureau (TRPB) announced today that over 35,000 Thoroughbreds have now been Digitally Tattooed.

The Digital Tattoo is an electronic authentication confirming the identity of a horse by a trained TRPB technician.

“Every racing 2-year-old, every 3-year-old and a significant share of 4-year-olds have Digital Tattoos and by the end of 2021, we estimate that 75 percent of Thoroughbreds will enter the racetrack paddock with a Digital Tattoo,” said J. Curtis Linnell, executive vice president, TRPB. “We have 56 TRPB Technicians under contract throughout the United States and Canada and even with the COVID-19 pandemic, they have been able to inspect, document and authenticate the identity of Thoroughbreds before their first lifetime start.”

The Digital Tattoo process begins when the technician scans the horse's microchip and if correctly reported, the microchip number hyperlinks to The Jockey Club electronic registration information viewed on a tablet.

Using the foal pictures as a reference, each markings description is compared to the horse's physical markings. After the markings, color and sex of the horse are verified, the technician documents the horse by taking 12-14 digital photos. These pictures are uploaded to The Jockey Club's Registry database thus becoming part of the horse's digital record.

The TRPB technician then affixes a TRPB logo on the electronic certificate of registration. This seal indicates that the TRPB has verified the identity of the horse and certified that the Thoroughbred is digitally tattooed in the breed registry's database.

“The new system has been well received not only by horsemen but also by racing office personnel and regulatory officials,” Linnell said. “We were thrilled to see that this year's 14-race Travers Day card at Saratoga Race Course featured every horse on the card, with one lone exception, sporting a Digital Tattoo.”

Even with the success and widespread adoption of the new system to date, the TRPB is striving for improvement in two areas: increased awareness and deployment of the InCompass Solutions Digital Identifier mobile app for race day horse identification; and broader utilization by the entire horse racing industry of Digital Tattoo information.

The accuracy of the identification process starts with the breeder reporting the microchip number as part of the foal's registration.

“We can't overemphasize the importance of getting the microchip reported correctly,” said TRPB's manager of technician operations, Teena Appleby. “This is the only way our technician can start the process of authenticating the horse's identify. A microchip sitting in a desk drawer isn't helping anyone.”

“The use of the Digital Identifier mobile app is the only way to identify horses on race day,” according to Appleby.

With a username and password provided by InCompass, horse identifiers, race office personnel, barn area security and other racetrack officials may automatically access the digital tattoo file that includes the photo of the horse's face, photos of every marking, the name of the horse, the horse's color, and the certificate of foal registration from The Jockey Club.

“These individuals now have immediate access to the horse's picture ID, which is akin to a passport or driver's license and with more identification tools than they've ever had available previously,” Linnell said. “A Thoroughbred should never have to be scratched from a race because of an identification issue, or have an incorrect horse be permitted to start in a race.”

TRPB Agent Rachael Mant, based at TRPB Headquarters in Maryland, makes a weekly visit to the Fair Hill Training Center to digitally tattoo Thoroughbreds. Trainers there have embraced the new system.

“This system has been working out great,” said Mike Trombetta. “The days of lip tattoos are in the rear-view mirror.”

Trainer Keri Brion believes: “the digital ID system is way better because you can always see them. It's much easier and I much prefer it.”

Trainer Arnaud Delacour said: “Tattoos in older horses can be very hard to read and it's a big plus if we don't have to flip the lip before a race.”

Trainer Graham Motion says he wishes the Digital Tattoo system had been adopted 10 years ago.

“This system is much more up to date. It's a clearer version of identifying horses and keeping tabs on them. It's much more organized and much easier.”

Lori Wydick, paddock horse identifier for two Ohio race tracks, said: “I prefer to see the horse's identifiable markings in the photos of the horses in the Digital Identifier program. The program has current photos from their Digital Tattoos as well as the registration photos of the horses. Photos are undeniable forms of identification. Photos of cowlicks, night eyes, and any other identifiable marking is invaluable.”

The TRPB is an investigative agency formed in 1946 by the Thoroughbred Racing Associations of North America to protect the integrity of the sport.

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Heleringer: Will The Absolute Insurer Rule Save Racing … Again?

“Doped” horses. “Hopped” horses. “Drugged” horses. Cheating. Indictments. Scandals. Let the bettor beware.

Those terms don't describe the current conditions in horse racing, but the overarching problems that dogged the sport nearly 90 years ago when racing had basically no reliable security system in place to protect the betting public. As is the case today, horse racing in the United States had no national governing body that set uniform standards and rules to police the sport. (Thankfully, this will finally change on July 1, 2022, with the federally mandated Horseracing Integrity and Safety Authority.)

Until his death in 1924, August Belmont Jr. could unofficially govern the game by the sheer force of his name and prestige — he had created the concept of a racing commission in 1895 and then persuaded a New York legislature dominated by Republicans to enact it into law. (Belmont was a staunch Democrat.) But at his passing, there still was no effective means – no proven scientific process – to combat racing's biggest challenge: how to detect and thwart the cheaters, the unscrupulous horsemen who drugged horses to reap huge “scores” at the betting windows.

Joseph Widener, in an attempt to both reform a sport he loved and, less altruistically, protect the sizeable investment he was making in the total transformation of Hialeah Park in south Florida, dispatched Marshall Cassidy in 1934 to France to study the post-race drug-testing system of a horse's blood/saliva the French racing authorities had conceived to police their own game. Cassidy brought the system back to the United States and installed it for Widener at Hialeah (overcoming a brief but bitter strike of horsemen in the process).

That single act, with stout punishment for offenders, copied nationally by a burgeoning racing industry that couldn't build racetracks fast enough, may have single-handedly saved the sport of horse racing from itself. The fans that fueled this explosive growth could now push their money through the windows with some degree of confidence they were betting on an honestly-run sport.

The simple, uncomplicated standard that governed was called the “absolute insurer rule.” The person doing the “absolute” insuring was a horse's trainer of record. It didn't matter if that trainer was (theoretically) on a three-year shuttle to Mars, if he ran a horse during that time anywhere in America and was the listed trainer of record; he was totally and exclusively liable for the consequences of any failed post-race drug specimen – not the groom, the hotwalker, a veterinarian, or even the familiar “disgruntled former employee.” Confirmed “positives” meant, automatically, the DQ of the winner, loss of purse by the owner, and a fine/suspension or both for the trainer. But how would the reviewing courts interpret such a unique guilty-until-proven-innocent standard? The answers were not long in coming.

In a landmark case with a number of similarities to the current Bob Baffert imbroglio, in late 1945, prominent trainer Tom Smith, the man who had trained the immortal Seabiscuit, was suspended for an entire year by New York's racing board after one of his grooms had been observed in the paddock at Jamaica spraying a “substance,” later confirmed as ephedrine, into the nostrils of Smith's horse. (Smith wasn't even at the racetrack that day.) In a battle of experts sure to be reprised when the Baffert hearing begins, Smith's expert testified the ephedrine's effect on the horse was “negligible” while New York's chemist believed the drug “might [key word] affect a horse … by increasing its respiratory capacity.” The racing board's harsh penalty was upheld by New York's appellate court. (Smith was even ordered to pay the board's court costs of $50.)

But, at least initially, no other state was inclined to follow New York's lead. Perhaps as a consequence of the strong (but widely unpopular) sanction meted out to Tom Smith, Maryland's highest court – barely two months after the Smith decision was handed down – affirmed a lower court's decision declaring Maryland's own absolute insurer rule unconstitutional. Trainer J. Dallett “Dolly” Byers had a winning steeplechase horse at Pimlico test positive for “benzedrine,” a stimulant. Echoing Mr. Baffert's initial defense after Medina Spirit's positive for betamethasone, Mr. Byers testified at his hearing that he was totally innocent and had no idea how the prohibited drug got into his horse's system. Byers' defense, complete with character witnesses, was found unavailing and he received the same one-year suspension that Tom Smith had gotten. A reviewing trial court threw out the suspension and the law/regulation on which it was based, calling the rule's “conclusive presumption of guilt” a “great vice.” A unanimous Maryland court of appeals affirmed and went even further: “This irrebuttable presumption [of guilt under an absolute rule] destroyed the right of [Byers] to offer evidence to establish his innocence. If this is 'just,' then the term 'unjust' has no meaning.”

Florida's Supreme Court weighed in the following year (1947), striking down that state's own absolute standard in the Baldwin case, holding for the first time anywhere that a horseman's license was “a valuable property right” that could not be suspended without due process of law, i.e., without some finding of guilt based on evidence not a mere violation of an automatic rule.

But just when it looked like the absolute insurer rule was going to be ruled off, California's Supreme Court upheld the beleaguered standard in 1948. In a 5-2 decision that the two dissenting justices called “un-American,” the majority reinstated a six-month suspension of trainer W.L. Sandstrom's license after his winning horse at Del Mar, Cover Up, tested positive for a “caffeine-type alkaloid.” Sandstrom's sanction, said the high court, was not “unreasonable, arbitrary, or capricious” since the absolute rule upon which it was based “was designed to afford the wagering public a maximum of protection against race horses being stimulated or depressed” and was a “reasonable exercise of California's 'police powers.'”

Over time, the Sandstrom decision became the consensus view of nearly every court that considered constitutional challenges to racing's single most important rule. (Both the Byers and Baldwin cases were eventually overruled.)

With the hiring of Spencer J. Drayton in 1946, wooed away from the upper leadership of the FBI, and his national efforts to “clean up racing” with the Thoroughbred Racing Protective Bureau (TRPB) that included the agency's aggressive enforcement of absolute insurer rules, horse racing became a major recognized sport in the United States, as honestly-run and incorruptible as humanly possible. The game enjoyed its “golden age” thereafter up through the 1970s.

The question must be asked, in the crucible of the serial Bob Baffert “medication” controversies, which supplanted the serial Rick Dutrow “medication” controversies, can horse racing survive in this country without a drug-testing system that is NOT based on the strict enforcement of an absolute insurer rule that the betting public can rely upon with the utmost confidence?

While every horseman's constitutional right to due process of law must be protected, at the same time, does the sport's leadership seriously believe that the wagering public (or their elected representatives) will tolerate a drug-enforcement apparatus that, far from the zero tolerance standard it adopted barely a dozen years ago (and has obviously been discarded), permits a chaotic system that allows excuses, explanations, and prevarications for drug positives that are only limited by a licensee's imagination? Exactly how is the public interest served if horsemen can plead, not just in mitigation, but as an affirmative defense, “environmental contamination,” transferred lidocaine patches, innocent applications of ointment, and wide-open-to-varying-interpretations how many picograms of a “therapeutic” (but nevertheless prohibited during races) medication “affects” a horse's performance during a race that lasts perhaps a minute and a half?

Now that the abandonment of the former “absolute” standard is on full display in the aftermath of a positive drug screen of the winner of the world-renowned Kentucky Derby, with the attendant incalculable damage to horse racing's “brand,” is it time once again to resume the strict application of an absolute insurer rule to save an industry that employs tens of thousands and is enjoyed by millions?

Bob Heleringer is a Louisville, Ky., attorney, former racing official and author of the legal textbook Equine Regulatory Law, the second edition of which will be released later this year by the University Press of Kentucky.)

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Wagering Insecurity: Tote Systems Have Not Evolved To Address Fix Six Scandal

This is Part 3 of the Thoroughbred Idea Foundation's (TIF) series “Wagering Insecurity.”

Faced with remarkable competitive pressure from the rise of legal sports betting, horse racing is at a crossroads.

Confidence amongst horseplayers and horse owners is essential to the future sustainability of the sport. Efforts to improve the greater North American Thoroughbred industry will fall flat if its stakeholders fail to secure a foundation of integrity, along with increased transparency of the wagering business and its participants over time. Achieving this is growing increasingly difficult after the sport has neglected its core base – horseplayers – for decades.

“Wagering Insecurity” details some of that neglect, and the need to embrace serious reform. Fortunately, there are examples across the racing world to follow.

PART 3 – VOLPONI

The major North American tracks, which are now vertically integrated companies controlling most of the major ADWs, tote companies, other service providers and even some of the high-volume betting shops like Elite Turf Club, have had little incentive to upgrade the oversight of wagering on the more than 30,000 annual Thoroughbred races on the continent.

The one entity which does offer some wagering security apparatus – the Thoroughbred Racing Protective Bureau (TRPB) – is a wholly-owned subsidiary of the tracks themselves, through the Thoroughbred Racing Associations of North America (TRA), a consortium of racetracks.

Despite several attempts from TIF, the TRPB's Executive Vice President Curtis Linnell declined to answer questions for this series.

What was once a robust organization, even called horse racing's own “little FBI,” is now a shell of itself, focused primarily on the microchipping of horses.

The headline of a 1960 piece in Sports Illustrated may offer that generation's perspective of where racing stood relative to security and integrity measures:

“The Best-Policed Sport of All.”

Today, the TRPB does offer its member tracks a tool known as the Wagering Analysis and Security Platform (WASP).

According to its website, the TRPB says: “this platform currently provides each Thoroughbred Racing Associations' member track officials with a robust integrity toolset for distributed betting networks. A variety of reports and modules are included which assist users with timely examination of wagering detail.”

This description suggests the tracks are mostly responsible for monitoring WASP themselves.

When TIF questioned a TRPB official in mid-2020 about a curiously low superfecta payoff, it was affirmed that the organization does not respond to individual questions about incidents, but only those raised by member tracks. If we wanted more insight, we would have to contact the track directly. The burden of dealing with a customer inquiry is on the racetrack.

North American racing does not have independent oversight of betting or wagering systems. The lone protection comes from a small office wholly-owned by the tracks, which gives them tools to monitor their own races.

This was not the plan when many in and out of racing recognized the need for radically improved wagering oversight in the early 2000s.

FIX SIX GROUND ZERO FOR RESET

In the years before and since, tote security has been a looming concern for racing after the “Fix Six” scandal was exposed in the aftermath of the 2002 Breeders' Cup.

Natalie Voss, Editor-in-Chief of Paulick Report, offers a full review of the incident.

In brief, Autotote employee Christopher Harn, who had knowledge of the bet processing function of the pick six and access to the system, altered tickets to guarantee a win after the first four legs of the Breeders' Cup pick six, which had a pool of more than $4.5 million that year. Specific pick six ticket details were only transmitted to the host site after the first four legs of the bet to limit the burden of too much transaction information going through the tote system.

While processing power in many other technological uses has improved since 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 of the sequence, capped by Volponi's improbable 43-1 Classic win, helped expose the fraudulent play as the only winning ticket, played through a Catskill OTB outlet in New York and was entered as a lone, $12-base bet, the equivalent of six individual $2 tickets.

The winning combination had the four single winners of the first four races with all horses used in the last two legs. The delays in ticket data transmission enabled Harn to change the four singles to the winners of the first four races. It was later uncovered the $12 base play was a mistake. Before the perpetrators were caught, the total winnings would have exceeded $3.1 million – but Breeders' Cup officials froze the payouts after astute horseplayers cried foul.

It was later revealed Harn, along with conspirators and college buddies Glen DaSilva and Derrick Davis, executed the fraud just weeks before the Breeders' Cup to test their processes, landing a pick four at Balmoral Park for over $1,800 and then more than $105,000 in a pick six at Belmont Park a few days later.

Steven Crist, former New York Racing Association executive, as well as a former publisher of the Daily Racing Form, noted in the Fix Six aftermath that one long-time pari-mutuel operations expert recalled a spate of incidents similar to the Fix Six had been uncovered years earlier, but whatever the weaknesses that enabled them then had been addressed, though without much public awareness.

Crist wrote just after the incident:

“It sure seems that the loophole has been reopened, and now every customer is understandably nervous, too.”

FEIGNED CONCERN

Horseplayers' justifiable anger around the lack of security at the time was further stoked as OTB and tote executives originally defended the outcome, suggesting there had been no impropriety.

Crist wrote:

“Breeders' Cup and the National Thoroughbred Racing Association acted with commendable speed and clarity, freezing the payout and demanding an investigation by the New York State Racing and Wagering Board. Officials of Catskill OTB and the totalizator companies AmTote and Autotote immediately tried to make the story go away, defending the winning ticket as an authentic stroke of good fortune while insisting their systems are impenetrable.

“Their lack of even feigned concern about the situation or respect for a serious investigation only raised more flags. Then three days after Brooks Pierce, the president of Autotote, said that the winning ticket was legitimate and actually 'good for racing,' Autotote announced it had fired a 'rogue software engineer' who 'had the ability to alter the ticket.'”

Reached in March 2021, Crist reflected on the ridiculous reactions from those who originally were defending the results as legitimate.

“Once the longshots came in, you just knew the bet wasn't going to be hit. So, when the details of the winning tickets were released, anyone who knew anything about betting races knew something was off.

“Well, over the next 48 hours, the OTBs and tote companies were just lying, and eventually it was all exposed.

“It was such a perfect illustration of how wagering had just totally gotten past the racing establishment.”

Just weeks after the incident, a survey of 300 horseplayers conducted by Hollywood Park, reported at a November 2002 California Horse Racing Board meeting, showed 68% of the surveyed believe “it was likely that fraudulent bets could be made after the start of the race” while overall, 69% “express a lack of confidence in the tote system.”

It will be notable later in this series that in that same California meeting, commissioners asked Autotote president Brooks Pierce if he had “any evidence whatsoever in California or anywhere else that anybody is able to bet” after the start of a race.

Pierce confirmed he had none.

Harn was fired by Autotote days after the fraud was eventually discovered. A Washington Post article captured the remarks of Lorne Weil, then chairman and chief executive of Autotote's parent company Scientific Games, the same day of Harn's ousting.

“Weil…had praised his company's 'detection system.'…

'The good news, if there is any, is our detection system worked the way it should have,' Weil said in a conference call. 'No money was paid or changed hands.'”

“During the call, Weil said Autotote's detection system would have red flagged the alleged alterations to [the Fix Six] bet even if they had not raised suspicions.”

Weil's praise for Autotote's own monitoring, however, was premature.

His remarks came before it was known Harn and his conspirators had changed tickets in a similar fashion earlier the same month without detection at both Balmoral and Belmont, netting over $107,000.

Weil and Brooks Pierce are still working together through British-based Inspired Entertainment.

A PERIOD OF TRANSITION

Where was the TRPB? Was anyone monitoring the pools or these risks?

In 2002, the TRPB was in a period of transition.

The Baltimore Sun's Jon Morgan profiled then TRPB President Paul Berube less than two months after the Fix Six, who offered insight that the control over wagering security was not what it once was, a function of the growth of the internet and simulcasting.

“Berube, president of the Thoroughbred Racing Protective Bureau, has watched as the sport burst in a few decades from the confines of racetracks to the nearly ungovernable realm of cyberspace…

“Berube acknowledges the business has changed, making it harder to police. About 85 percent of the $14.5 billion in bets on thoroughbred races last year [2001] were made somewhere other than where the races were run…

“A major heist involving the computers that store and sort the wagers seemed, well, inevitable…

“That's one reason the protective bureau has been spending more time studying the industry's interlocking computer networks and the 'tote' companies that run them.

“The agency convened a meeting a few years ago to give the totes – who aren't members of the Thoroughbred Racing Associations – a list of 'points of vulnerability,' including the forgery of betting tickets, a time-honored scam also linked to the Breeders' Cup scandal.

“They all acknowledged the problem, but said it was too expensive to fix,' Berube said of the tote companies.

In 2021, Berube clarified to TIF that the “too expensive to fix” adjustment was:

“…centered on a flaw in outs book procedures [the process of clearing previously uncashed winning tickets after a period of time, normally months] that had been exploited by insiders to cash before those winning bets reverted to the state.”

The Fix Six scammers, led by Harn, were involved, along with others, in the uncashed tickets scheme too.

The tote companies had avoided stringent monitoring. This remains the norm. Most businesses prefer saving the cost of extra oversight. But that does not mean that businesses should dictate their own oversight requirements, or that what amounts to self-regulation is akin to an acceptable standard of regulation.

The industry was well-aware of the vulnerabilities which led to the Fix Six. Steve Crist's allusion to previous loopholes –insecurities – from well before the Fix Six were known to the TRPB.

The Morgan article continues:

“As recently as September [2002, a month before the Fix Six], Berube had a conversation with someone regarding the possibility of hackers altering bets after a race had been run – especially on bets that require the gambler to predict in advance the outcome of several races.

“The reason: Data on such bets are stored 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 of Morgan's 2002 story is noteworthy.

“My September 2002 meeting was at the TRA's annual simulcasting conference, and was with a well-placed tote company representative who was asked, by me, what it would take to 'create' winning pick six tickets after the entire sequence of races.”

The tote representative told Berube all it would take is a program and a programmer – less than two months before that actually happened on the sport's biggest stage.

But for years, the TRPB's functions were being trimmed back, with rising costs for placing TRPB agents at tracks cited as the reasoning. Morgan's article captured the transition:

“Tracks complained about the cost of the protective bureau, and in 1995 the Thoroughbred Racing Association restructured. Each member track was allowed to either pay to have [a TRPB] agent on site or to provide its own security in a cooperative arrangement…

“Many tracks opted out, and, as of the end of last year, the protective bureau had only nine full-time agents assigned to 13 thoroughbred tracks – though they help coordinate security with the other 30 member tracks.

“The role of the protective bureau has been 'minimized,' [now Thoroughbred Horsemen's Association chief executive Alan] Foreman said. 'The nature of the industry and business have changed and a number of tracks have found it more cost-effective to do that work themselves.”

Not surprisingly, cost savings did not equate to better protections.

Paul Berube affirmed the degradation of the role of the TRPB over these years in his 2021 conversation with TIF.

“It was an erosion, over time, and it came down to commitment and the perception of need.

“Changes in ownership of racetracks from privately-held [tracks] to corporate conglomerates brought about different thinking on security measures. Lost in the ownership changes was first-hand knowledge and appreciation of the TRPB's history. The expansion of simulcasting added to the changes that have occurred.

“Even though 90% of all wagering dollars come from off-track, that has not and will never change the fact that the races being wagered upon still occur at a hardscape facility and where essential participants are located. In short, racing still needs investigative eyeballs on the actual race event even though less money is being wagered at the live venue.

So how will racing integrity oversight exist going forward?

Berube notes that any effort must be a nationwide one.

“Today, there is no national unity, but in the heyday of the TRPB, that was our strength. So many investigations went across a wide span of states. Today, I don't know how you would do it without some uniform group.”

Around the time of the Fix Six scandal, Berube notes that the TRPB was looking to hire a knowledgeable resource for the TRPB in pari-mutuel operations and was recommended to consider Curtis Linnell, now Executive Vice President of the organization some 19 years later.

“Best hire I ever made,” Berube told TIF.

But as corporate control of American tracks concentrated even further, the TRPB's influence and its role as an agent of the TRA, a consortium of those same tracks, waned as it relates to wagering integrity. Incidents or suspicious findings are almost never publicized, if they were triggered at all.

In 2021, Steve Crist scoffed at the TRPB arrangements, both at the time of the Fix Six and now.

“The TRPB was like some warm blanket the industry would toss on these things in some attempt to reassure horseplayers that they were looking into it. But there was almost no sort of visibility or presence on any modern wagering incident.”

Massive improvements were needed in wagering security as racing became an increasingly off-track, online betting business. The Breeders' Cup Fix Six proved the need to just about everyone.

In its aftermath, the industry started talking, planning and spending – millions – to build a modern oversight arm. It was a total failure.

Coming Thursday, April 22: Part 4 – Confidence

Miss a previous installment? Click on the links to read more.

Part 1 – Expectations

Part 2 – Intertwined

Want to share your insights with TIF? Email us here.

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TIF Launching “Wagering Insecurity” Series Beginning April 13

Editor's Note: The following is an edited press release from the Thoroughbred Idea Foundation, which is beginning a 12-part series on wagering insecurity next week. The series will be released in two installments per week, and the TDN will carry summaries and links to the 12 articles.

The Thoroughbred Idea Foundation (TIF) will launch “Wagering Insecurity,” a multi-part series which will examine the current state of oversight of North American Thoroughbred racing and wagering, beginning Tuesday, Apr. 13.

In the aftermath of the infamous “Fix Six” at the 2002 Breeders' Cup, the American racing industry pledged millions of dollars to improve the monitoring of pari-mutuel betting and create a central office to oversee wagering security. While plenty was spent, the oversight never materialized. Vulnerabilities still exist, late odds changes impact many races and transparency is nowhere to be found.

TIF believes improved measures of integrity will boost customer confidence, which will lead to increased participation and put racing on a path to a more sustainable future, particularly in light of the rapid expansion of legal sports betting across the continent.

Customer confidence is crucial to any business, especially gambling, but North America's racing industry has done little to instill it over the last two decades.

“Automated bingo card devices in church basements have more independent monitoring than the tote systems,” said Kevin Mullally, Vice President of Government Relations and General Counsel for Gaming Laboratories International.

Track operators seem indifferent. As one 25-year U.S. state racing regulator told TIF for this series:

“Most tracks, confronted with a wagering integrity issue, would either bury the information or bury their heads in the sand and it would never see the light of day. That's not every track across America, but the majority would not want to make public any information that would question the integrity of wagering on their product.”

In 2005, when speaking of the racing industry's post-“Fix Six” efforts to upgrade wagering oversight which eventually failed, then Del Mar Thoroughbred Club President Craig Fravel acknowledged the track operators might fall short of the mark.

“We [track operators] are a little suspect because we are maybe overly confident at times. I think to allow customers to have sufficient levels of confidence in us, we have to not only demonstrate we are capable of reviewing things, but that there is a sufficiently independent and authoritative organization out there than can be the ultimate arbiter of those kind of decisions.”

Such a group still does not exist.

The TRPB

The Thoroughbred Racing Protective Bureau (TRPB) is North American racing's only provider of any wagering oversight, but the group has been defunded over years and is not independent. It is a wholly-owned subsidiary of a consortium of North American racetracks.

The TRPB provides member tracks a platform to monitor wagering on their own races and assist them when needed. The tracks essentially monitor themselves.

Given the consolidation which has taken place in horse racing over the last 20 years, tracks control most of the levers of the greater business. They own most of the online betting platforms which process the majority of bets on North American racing, known as ADWs. They own two of the three main tote companies which handle most betting activity. One conglomerate even owns at least part of a major off-shore rebate shop whose few customers account for an enormous amount of total handle.

Tracks fund the TRPB, which was once called horse racing's own “little FBI,” but has seen its policing functions largely reduced. Horse racing may have been once described as “the best policed sport of all,” but that has changed.

“It was an erosion, over time,” Paul Berube told TIF of the TRPB which he ran for nearly two decades after working as an investigator with the group for another two decades before that.

“Today, there is no national unity, but in the heyday of the TRPB, that was our strength.”

Despite several attempts from TIF, the TRPB's Executive Vice President Curtis Linnell declined the opportunity to answer questions for this series.

Suspicious Betting

While the TRPB has taken on an almost invisible profile to most bettors, there is an unexpected group which has started paying more attention to North American racing,

Unbeknownst to most American horseplayers, a large bookmaking market has emerged in Europe offering fixed-odds bets on North American racing. Total handle is believed to exceed $1 billion annually. Contracts enabling these relationships are often facilitated by XB-Net, a subsidiary of 1/ST, formerly The Stronach Group.

Bookmakers have their own monitoring group which examines wagering on all sports, investigates suspicious wagers and raises alerts to regulatory authorities with whom they have information-sharing arrangements. For the first time ever, they identified suspicious wagering on U.S. races in the fourth quarter of 2020.

According to Matt Fowler, Director of Integrity at the International Betting Integrity Association (IBIA), the recent alerts on U.S. races go “well beyond just an unusual betting pattern or unexpected price movements.”

European fixed-odds betting operators are identifying activity involving U.S. racing that should be concerning to all U.S. racing stakeholders. Where is the American oversight on American races?

At present, there is no reporting relationship between European bookmakers and any American counterparts, the TRPB, North American track operators or regulators. For now, the findings will inform bookmaking decisions but not the patrolling of American races, where pari-mutuel handle vastly exceeds bookmakers.

A world-wide market requires world-wide supervision. The TRPB is the closest thing North American racing has to self-regulation, which is fine…until it isn't.

What we have now is insufficient.

Racing on the continent in the 2020s is run with an integrity infrastructure better suited to the 1970s and a business model from the early 1990s. The oversight measures for the races themselves and their wagering systems have degraded over time. Racing's integrity infrastructure is falling farther behind that of the rest of the developed racing world, where more robust monitoring of all markets is far greater, transparent oversight is commonplace and customers are far better protected. Examples of these modern steps are plentiful throughout the series.

Opportunity

Improvements to racing's integrity infrastructure will improve customer confidence, increase participation in the sport and lead to a more sustainable future.

“Wagering Insecurity” provides several recommendations for North American racing to consider.

Notably, the new Horseracing Integrity & Safety Authority (HISA) must include elements of bet monitoring to its practices once launched.

Global sports and racing integrity expert Jack Anderson of the University of Melbourne, who was the keynote speaker at the University of Arizona's Global Symposium on Racing in 2018, highlights several key points throughout “Wagering Insecurity” which support this conclusion.

“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,” Anderson said.

“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.”

The role of HISA can and should go farther than its more commonly understood functions which have dominated early dialogue around it–namely its racetrack safety and anti-doping and medication control programs.

The legislation which established HISA empowers much more, declaring that HISA shall “exercise independent and exclusive national authority over the safety, welfare and integrity of covered horses, covered persons, and covered horseraces.” The definition of covered horseraces includes those with interstate wagering and ADW account betting.

TIF makes several other recommendations in the series related to adopting modern, transparent best practices, many of which are in place in other racing jurisdictions and sports. Significant upgrades are possible and, fortunately, the proverbial wheel does not require reinvention.

The opportunity for significant reform is real, lifting the standards of North American racing like never previously considered and importantly, rebuilding confidence in racing's voluntary participants–horseplayers and horse owners.

“TIF's advocacy has focused on improving the business for horseplayers and horse owners as their participation in racing fuels everything,” said Craig Bernick, President and Chief Executive Officer of Glen Hill Farm and founder of TIF. “We need confidence in both groups to sustain the industry, and as the various installments of the series will reveal, it is frightening just how far behind we are in protecting customers.

“Industry consolidation of track operators, technology companies and other service providers has not improved the sport,” Bernick added. “As we move forward over the next two decades, racing needs to compete for customers. Meaningful integrity controls and better pricing are needed to meet the expectations of modern bettors. Right now, we are falling woefully short and present an increasingly uncompetitive wagering offering.”

TIF's Board of Directors established the Wagering & Integrity Issues Steering Committee in July 2020, which was instrumental in the development of this series.

Patrick Cummings, TIF's Executive Director, said: “We are incredibly appreciative of the dozens of current and former racing and gaming industry executives as well as regulators from North America and abroad who provided so much insight, both on the record and for background in this series.”

“This project pulled together many pieces that have not been connected previously, and I believe readers will walk away with a much greater understanding of what has happened for the last 20 years, the extent of the threats facing the business and the tremendous opportunity to bring about changes through HISA. We look forward to sharing the various installments in the coming weeks.”

The “Wagering Insecurity” series will be published free at RacingThinkTank.com, released to industry press, via Twitter and emailed to those on TIF's mailing list. Register to receive notifications here.

The post TIF Launching “Wagering Insecurity” Series Beginning April 13 appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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