Daily double pools on Sept. 4 (Races 2/3), Sept. 1 (Races 6/7) and Aug. 25 (Races 5/6) were subject to massive bets on combinations the manipulator(s) expected to lose. In each case, the bets were made in the final betting cycle when projected payouts for each combination are not updated until the race was underway.

TIF has drawn attention to such incidents, and the problems they create, at other U.S. tracks in the past. Most notably, Gulfstream Park eliminated its quinella pools after a significant manipulation event was detected in November 2022.

“These incidents at Prairie Meadows have all the hallmarks of pool manipulation based on TIF's multi-year focus and every time they occur, it calls into question the outcomes of the races involved,” said TIF executive director Patrick Cummings. “Integrity is paramount and when pools are manipulated like this, bettors are rightly confused and can lose confidence that races are run fairly and the betting pools are operated fairly.”

Click here for more on this story.

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Patrick Cummings, the moderator of the panel on CAWs, is the Executive Director of the Thoroughbred Idea Foundation, a racing-industry think tank. Cummings took the panel through a brief history of parimutuel wagering and the changes the industry has seen before landing at the crux of the subject matter: CAWs.

“The CAWs are individuals with well-resourced staffs, developing couture models assessing vast amounts of data,” said Cummings. “They deploy finely-honed algorithms to efficiently place bets, often at the last possible second, all while receiving significant rebates for their play.”

The rebates, he said, while sizeable, were only one of the challenges that CAWs present to racing. The other is their ability to bet large amounts of money at the last possible second before the race, which gives them an advantage over regular players.

Pat Cummings | Skip Dickstein

“In pari-mutuel wagering, betting late has always been beneficial,” Cummings said. “But, when all betting was done on-track, betting late came with the risk you might not get your bet down at all.

“That's not a concern now, especially for the CAWs, who've been given the ability to place batch bets, dumping vast amounts in the final cycle of betting. The impact of that is witnessed every day, in nearly every race and across almost every pool.”

That impact, he said, has led us to where we are now: CAWs have grown from 8% of total handle in 2003 to around 33% of handle today. At the same time, when adjusted for inflation, non-CAW wagering is down by nearly two-thirds over the same time period. That's a concern because the money returned to racing in the form of purses is much greater from normal bettors than from those receiving huge rebates. So while handle may be up, “the greatest source of growth has been a handful of high-frequency bettors,” who pay less back into the system.

“How the evolution of CAWs is managed and how we support the existing customers we still have might be key to the future of wagering on racing in today's tech-forward world–one with unfathomable processing power, machine-learning, AI and more,” Cummings said.

Cummings led a Q-and-A session with Joe Longo, the General Manager of Content Managing Solutions for NYRA, which owns an ownership stake in the Elite Turf Club, one of the largest computer syndicate operations; and Dr. Marshall Gramm, a horse owner and professor at Rhodes College.

Gramm said he had written models with partners based on statistical probabilities. He started receiving rebates in 2011, and said that doing so not only allowed him to turn a profit, but to increase his handle enormously, from $49,000 in 2010 to $25 million in 2015. He has gone on to be a major racehorse owner, with 116 horses he now owns alone or in partnerships.

Gramm said that some in the industry have come to believe that rebates are all negative, but that his churn had increased exponentially because of it.

Love it or hate it, though, CAWs are here to stay, said Gramm.

“There's no walking back from it,” he said. “The computers aren't going away. You can't step back in time.”

Neither panelist addressed the issue that Cummings talked about in his introduction and that was covered in Jerry Brown's TDN op/ed, Existential Crisis, that because in parimutuel markets, players are playing against one another, regular people are effectively paying more, and leaving the game.

Longo discussed how NYRA has become the only racing organization to ban CAW bettors in the win pool within two minutes to post in order to negate the late odds fluctuations which have become so frustrating to horseplayers. Longo said that while no other organization had followed that lead, he felt that others eventually would.

HISA Panel Discusses Adjustments to New Rules

Trainers Jena Antonucci and Ron Moquett served as panelists, along with Ben Mosier, Executive Director of the Horseracing Integrity and Welfare Unit (HIWU), and HISA's Lisa Lazarus on a Q-and-A panel moderated by Jim Gagliano, the President and COO of The Jockey Club, on how trainers were adjusting to the new HISA regulations.

Gagliano asked the two trainers how their life had changed under HISA.

Trainer Jena Antonucci | Skip Dickstein

Antonucci said that she was already running her business along the lines that HISA requires in terms of record-keeping, but acknowledged that that part of the business had been a learning curve for other horsemen. Moquett said that, “as a Thoroughbred trainer, there's a new set of rules to follow and we're going to adapt to those rules, but primarily, we keep the priority on the horse.”

Antonucci acknowledged that there were concerns and bumps in the road as the program has gotten underway, but urged people to come forward with those problems so that the solutions could be found. But the benefits, she said, were dramatic.

“I may be a minority in this thought,” she said, “but I find it has been the great equalizer. It isn't a secret that there is availability of different levels of pharmaceuticals on different levels. Really smart chemists, and people looking to gain an edge. So I feel the biggest benefit has been to probably the hardest hit of this industry, which is the middle and the smaller side, where it has allowed a level playing field and where that guy or gal who busts their butt 24/7 can walk into a race and not feel like they're going to watch another horse re-break at the top of the stretch. That their plied trade and their skill set will have an opportunity to shine, where that eight-percent trainer historically, where it looks like I can't train a racehorse? All of a sudden, he's winning more, or she's winning more, and it's not because we've done anything different in our practice. And you know what? What I do, I do darned well, and my horse–whether it's in the Grade I Belmont Stakes or a $12,500 maiden–is going to have the chance to march down that stretch and compete eye-to-eye with the horses next to them, and there's not a pharmaceutical in our way.”

The crowd gave her an ovation after the comment.

“There are a few parts of it that have been very challenging,” said Moquett. “You're dealing with a large group of people who are now just getting introduced to technology. I'm helping people who are sometimes my competitors try to understand and navigate the system.

“I wear a number of hats,” he said. “I train horses. I own horses. I'm a member of the HBPA, and I'm on the HISA Advisory Committee. I'm constantly a sounding board. People come to me and say this is unfair, and I come to [HISA]. It's new. There are going to be problems, and they're going to have to listen to horsemen. It doesn't matter how good [Lisa Lazarus] is at her job, we need the Bill Motts and the Steve Asmussens. My job is to say, `look, I understand what you're trying to do, but we need to do a better job of explaining to people what the differences are between accidental contamination, an overage of an allowed medication and someone trying to gain an edge.' I'm basically representing 4,500 people that have to go through every regulation that HISA believes is okay. So [Lazarus] and I will get together, we'll battle, and we'll come to a solution. I will say we don't always get along that great, but she has been very good about hearing me out.”

Lisa Lazarus said, “One of the things we heard a lot was that if the public hears that a trainer has a medication overage, they think that they're a cheater. That they don't understand the difference between true doping substances, and medications that are allowed, but just not on race day. And so, one of the things that the [AMDC] does is distinguish very clearly between allowed substances and banned substances.” Violations for each were very different, she explained. “We're there to protect the 99% of trainers who are competing cleanly, so that they get a fair race.”

Safety, and The Traceability of Thoroughbreds

Tracing what happens to a Thoroughbred when it leaves racing or breeding has long been a problem for the industry, an issue that Kristin Werner, the Senior Counsel for The Jockey Club, addressed in her report on Thoroughbred Safety.

“I am pleased to announce that the `Transferred as Retired from Racing' process has gone digital,” said Werner. “The permanent removal of a horse's eligibility to race is beneficial to the retiring racehorse, but the process requires thoughtfulness and transparency on the part of the seller and buyer to avoid contractual disputes or other disagreements. To that end, the previous process required a notarized signature and hard-copy form to retire a Thoroughbred from racing. With the assistance of digital signature verification, we are now able to confidently collect the required signatures through the Interactive Registration website, which will make the process easier for everyone involved.”

Kristin Werner | Skip Dickstein

Werner also reported that the ease of traceability is increasing due to the replacement of hard-copy certificates with digital ones starting with the foal crop of 2018. This, she said, “will allow The Jockey Club to follow up with the certificate manager to try to trace a Thoroughbred that has exited the racing or breeding population with an unknown outcome. When this system is in place in 2024, an automated prompt will be triggered when a horse has not been reported dead and has no racing activity, no breeding activity, and no Thoroughbred Incentive Program number for a specified time period. The communication will explain why the prompt was triggered and will ask the manager to indicate the horse's current status.”

For foals born in 2017 and prior that had made a start in the past 10 years, she said, The Jockey Club would be reaching out to the last connections to try to determine their status.

Werner also addressed racing's safety issues.

“In 2022, data analysis from the 14th year of reporting to the Equine Injury Database (EID) showed a decrease in the rate of fatal injury in 2022 to 1.25 fatalities per 1,000 starts,” said Werner. “This is the lowest cumulative fatality rate since the EID was launched in 2009, and is the fourth consecutive year that the rate has decreased. While 99.88% of Thoroughbred races were completed without a fatality last year, clusters like those that occurred in April and May of 2023, unfortunately, cast a shadow over the good news and bring equine fatalities back into the headlines of national media,” she said, referring to the fatalities during the week leading up to the Kentucky Derby.

Werner said that the advent of the EID had allowed them to identify 35% of the risk factors which put horses at increased risk for breakdown during the running of a race. Those factors include a horse's vet list history, the race distance, and the time a horse has spent with a trainer. Long races, and longer time with a horse's trainer make that horse statistically safer.

The Safety Committee is also calling for the dissemination of information regarding the consistency and maintenance of track surfaces. “The Thoroughbred Safety Committee today calls for that information to be frequently measured at periodic distances and made available to the public,” said Werner. “Working with other key industry stakeholders, especially the Horseracing Integrity and Safety Authority and the Racing Surfaces Testing Laboratory, The Jockey Club recommends exploring the best methods for providing the racing surface data to the horsemen and public, including through an app, website, or other electronic feed. As with all of its recommendations, The Jockey Club will help provide resources to ensure this recommendation is met.”

Analytics in Sport

Michael Lopez, the Director of Football Data and Analytics for the National Football League, is a Saratoga resident who used to teach at Skidmore College in town, and a long-time horse racing fan. He talked about how the NFL uses data to drive decision-making, and ways in which he felt horse racing could do the same.

Michael Lopez | Skip Dickstein

And while the sports are completely different, there were several interesting parallels.

Wearable technology has been an interesting new potential safety tool for horses, designed to measure things like their regular stride to detect any changes that might indicate a problem. The NFL is doing the same.

“Recently,” said Lopez, “all NFL players are now wearing RFID chips in their helmets, shoulder pads, and cleats, small enough so that the players don't feel them, but enough so that a signal is emitted each time they step onto the practice or game field. The burden is heavy–this data is messy and the tracking cumbersome–but the idea of a cleat specific to a running back on turf, or a helmet specific to a quarterback who likes to scramble–gives the league plenty to work on. And each practice, each club is required to wear tracking devices that give insight into a player's load, distance traveled, speed, etc., which enables sports scientists to evaluate performance, if players need to tone down, or injury recovery.”

Moreover, the NFL is timing the replay review process to ensure that a coach's challenge in a more prominent game is treated the same way that it would be in a less-prominent one. After the non-disqualification of Forte (Violence) in the July 29 GII Jim Dandy S. prompted much discussion over whether a less well-publicized event would have merited a DQ, the topic struck home. “The horse racing corollary is obvious,” said Lopez. “When, why, and how stewards decide for or against a disqualification, because a possible DQ at Del Mar should have the identical decision-making process to one at Saratoga.”

Engagement With Racing

Lindsay Czarniak | Skip Dickstein

Lindsay Czarniak was just a baby when her father Chet took the job as the first-ever horse racing reporter for USA Today in 1982. Today, she is a sports broadcaster who anchored SportsCenter for six years and who works as a Fox Sports sideline reporter. She is a studio host for NBC's summer and winter Olympics. She is also an influencer with America's Best Racing and a West Point Thoroughbreds partner who was one of the co-owners of Jace's Road (Quality Road) in this year's Kentucky Derby. “My goal was to give folks that pay attention to my content the VIP access,” said Czarniak. “I had so many people pulling for Jace's Road because they knew we were in the big race.”

Her advice for racing? Lean into storytelling and access; just because it feels normal to people within the industry doesn't mean that it is to fans. “There is a family aspect, a necessary aspect, a high-stakes aspect to this sport that your average sports fan would consume.”

She also advised racing to place itself where young people consume content, i.e., streaming platforms, digital and social media, etc., and to communicate the safety steps that have been taken.

Racing and Data

Kyle McDoniel was named the President and COO of Equibase on June 1, 2023, and comes from a sports and data background, having most recently served as vice president of U.S. Strategic Partnerships for SportRadar, a sports technology company.

McDoniel talked about the challenges inherent in GPS tracking of horse racing, and said that Equibase is now producing tracking at 28 tracks across the U.S. and Canada, representing over 75% of North American handle. In addition, he said the company was continuing to invest in graphical representations of past performances, including those that illustrate stride frequency and length averages, among other things.

Janney's Closing Remarks

Stuart S. Janney III | Skip Dickstein

In his closing remarks, Jockey Club Chairman Stuart Janney said that the advent of HISA had done a lot to secure racing's future.

“Four years ago, at this program, a great Australian breeder-owner, John Messara, speaking about the proposed federal legislation, said, `You've got everything to unleash your monster of economic rewards if you were to join the rest of the world in this harmonization in terms of the drug rules.' John was right and we are here today and it's now time to capture that future.”

To do so, said Janney, “I have two suggestions. First, we have to embrace the international aspect of the sport. Racing is global and thankfully, in many parts of the world, the sport is thriving.”

His second suggestion, he said, involved marketing. “We need to get past the concerns that we are constantly in turmoil, rocking from one crisis to the next. Another Round Table speaker from the past, David Fuscus, [who] discussed crisis management, said, `If we come together as an industry, negative perception can be turned. There is hope we can come through these dark days, but to do so, the public needs to understand what we're doing and believe we are on a path to success.'”

Entire Conference Available Online

To watch the entire Round Table conference, click here.

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“The Thoroughbred Idea Foundation's analysis of data from Del Mar between 2018 and 2022 showed on an inflation-adjusted basis, per-race (or per-opportunity basis for certain bet types) CAW betting, from what is believed to be 17 accounts, has grown tremendously in the last five years-up 46% in the superfecta pool, 49% in trifectas, 78% in pick fives, 128% in the show pool and a staggering 403% in the pick six pool,” reads the report, concluding, “The trend for all other customers is disturbing.”

This trend is problematic; the report concludes that major problems is that the increases in CAW betting, due to rebates, does not make up for the handle decline from other sources. That has a deleterious effect on purses, whose soul source of funding in California is through wagering.

The report, “Sharks & Minnows–Managing the Growing Imbalance in Racing Wagering Markets,” is available on the TIF website, racingthinktank.com.

CAW bettors receive rebates on the takeout because of the large volumes they bet, but they quote Del Mar president Josh Rubenstein as saying that those rebates will be limited at the Del Mar summer meet–at least in the win pool.

“We get that late odds fluctuation is frustrating to players,” Rubinstein said, referring to the fact that CAW players place their bets based on their perceived value in the odds close to post time, which creates major odds shifts–often after the horses have left the gate.

“Beginning with our upcoming summer meet, [we] will be implementing new protocols for CAW players that are designed to limit participation in the win pools at two minutes to post. Based on what we've monitored and analyzed from other tracks, we believe these protocols will reduce late odds changes.” TIF reported that the largest rebates will be given to bets made with more than three minutes to post, a smaller amount at two minutes, and the smallest rebate at under two minutes. Non-rebated customers pay 15.43%, the report says.

“Limiting CAW guardrails to merely a rebate change in the win pool, while potentially helpful in reducing some late odds changes, amounts to little more than window dressing for mainstream customers,” TIF concludes. “CAW betting in Del Mar's exotic pari-mutuel pools, particularly the trifecta, superfecta, pick three, four, five and six pools has been substantial. Play from Elite (Turf Club, a top CAW) and RGS (Racing and Gaming Services, another) customers exceeded 32% of total handle in each of those bet types last year and was 38% of pick five handle.

“CHRB data does not delineate how much is staked on the early pick five, with its friendly 14% takeout to mainstream bettors, and how much is on the high takeout late pick five, with a 23.68% takeout rate. It is reasonable to expect the percentage of CAW play reflects their enormous pricing advantage over the public on the late pick five. Total handle figures do not tell the most accurate story. In nearly every pool offered by Del Mar, all non-Elite and RGS handle is declining.”

To read the full report, click here.

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The entry portal closes at 11:00 a.m. E.T. this Saturday, May 6. Players should keep track of their answers as you will not be able to revisit the survey portal once you submit your entry. Should a horse named directly in a prop be scratched, all answers to that prop may be counted as correct.

Winners will be notified by email late on Saturday evening to identify how to direct charitable donations. The top finishers will get to direct $20,000 in donations to four racing charities, which are: Backside Learning Center at Churchill Downs, New Vocations, Permanently Disabled Jockeys Fund and Second Stride. Click here, for more information.

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Recent stories have continued to cite declines in total handle, wondering just what is at play. How that handle has been derived has changed dramatically, but that's not reflected in the overall numbers.

Over the last century, U.S. racetracks have reported total handle on their races and, for most of that time, it was one metric that accurately depicted the health of the business. But in our modern era of simulcasting, rebating and high-frequency betting from professionals, often called computer-assisted or robotic wagering (CAW/CRW), total handle figures actually deceive industry stakeholders more than anything.

Just over $12 billion was bet in 2022, which is roughly the same as in 2000. Adjusted for inflation, total wagering is down nearly 50% in the last 20 years. To compound the issue, research conducted by the Thoroughbred Idea Foundation (TIF) estimates that roughly $4 billion of total handle from 2022, around one-third of betting, was from the CAWs/CRWs. Others think the figure is probably higher.

Racing industry stakeholders should know how much is being wagered, through which channels, how much of those wagers are going towards purses and how that has changed and continues to change. But racetrack operators and executives in the betting space seem to have little interest in publicly discussing how their CAW/CRW business is thriving while their mainstream business appears to be floundering. That lack of transparency wasn't always the case.

Big Changes Over 20 Years

In 2004, an NTRA-commissioned study showed the burgeoning CAW/CRW space represented about 7-8% of total betting. Now, it seems headed towards 40%. This does not have to be the problem it has become. On its own, betting from CAW/CRW groups represents a modern, tech-based, intelligent and efficient form of betting. It should be something we can embrace and improves the overall business.

NASDAQ estimates that high frequency trading now represents half of all stock trading. But trading and investing from mainstream investors has never been cheaper or more accessible. Racing has not evolved similarly.

Racing's costs–through takeout–have grown for mainstream customers while rebates for high-frequency bettors are believed to be higher than ever. The amount the public actually loses, “effective takeout” also seems greater than ever. TIF research, led by Pat Cummings, has uncovered public data which shows mainstream ADW customers are losing far more than the traditional blended takeout rate at tracks in Florida. A figure that should be approximately 20% is often closer to 30%, and it typically gets worse on mandatory payout days.

While racing should be able to embrace a future with more tech-enabled betting, it cannot do so at the expense of mainstream customers. All of the evolution has focused on CAW/CRW bettors, making it easier to bet and at lower price points, while mainstream customers are still paying full-freight on a product that has not evolved for them…and they have fled the sport in droves. Total handle figures hide that shift. The higher the takeout, the more room there is to rebate the sport's biggest players. And they have responded! The segment that has actually grown is the segment with the lowest takeout!

Using inflation-adjusted figures from that NTRA study, published in 2004, CAW/CRW betting has likely tripled in the last 20 years. That means mainstream betting is probably down about two-thirds since then. This is an atrocious trajectory from racing's largest customer base–rank-and-file horseplayers–and has occurred during a period where racing had a veritable monopoly on legal, regulated betting via the Internet.

Now racing's inferior, expensive product for mainstream bettors has to compete with legal sports betting. Good luck.

Great Purses Should Not Buy Our Ignorance

Owners and breeders have enjoyed purse supplements through additional gaming revenue for over two decades now. Combined with poor reporting of actual wagering trends, these supplements have also succeeded in buying our general ignorance of the core product–betting on racing. That's incredibly problematic in the long term.

Horseplayers are some of our sport's greatest advocates, and many of our biggest owners were first introduced to racing as $2 bettors. Not only do we risk losing a generation of future owners if our sport is no longer relevant to mainstream bettors, but we are also squandering the business acumen of leading owners on industry boards by failing to give them an accurate picture of how wagering on the sport has evolved.

More than ever before, racetrack operators are owned, or controlled, by gaming companies. Combined with racing stakeholders' ambivalence towards wagering, gaming corporation ownership often does not seem to rate daily racing as a long-term priority. For many of them, owning and operating racetracks has been a not-so-subtle trojan horse for gaming machines.

Particularly in jurisdictions with heavily-supplemented purses, owners should be advocates for reduced takeout and a healthier evolution of the wagering product for all customers. This will drive future participation. It has gotten easy to ignore how the betting business has evolved when tracks run maiden races for over $100,000, when auction prices climb and the business of buying and selling horses is so lucrative. It defies logic that purses have grown considerably thanks to purse supplements but yet takeout remains high for our mainstream customers.

Industry stakeholders–specifically, owners and breeders–must be more attentive to the alarming trajectory of the wagering business, demanding both more transparent reporting and a product that can grow all customer bases–not just the high frequency bettors at the expense of rank-and-file horseplayers.

I'm all for technology. I'm not against CAW/CRW play. I want all customer segments to grow. I want a bigger pie for everyone. I'm FOR horse racing. We all enjoy bigger purses, but the realities of our core wagering business, which sustains the sport and keeps it in the public consciousness, is really alarming. Most owners and breeders don't see it because it has been, relatively, hidden behind antiquated methods of reporting handle.

I encourage owners, breeders' and horsemen's organizations to demand far greater transparency–both of operators and regulators–as it relates to racing's wagering business. We need to be stewards of our sport and not merely accept elevated purses while ignoring the economic fundamentals that impact our largest base of customers.

Craig Bernick  is President and Chief Executive Officer of Glen Hill Farm, a breeding and racing operation based in Ocala, Florida. He founded the Thoroughbred Idea Foundation.

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Senate Bill 2343 is similar to a measure introduced a year ago, also by Sen. Addabbo, but which was never advanced for a vote, TIF reports.

“There should be no doubt amongst racing stakeholders that our existing pari-mutuel offerings are not enough in today's competitive market,” said Thoroughbred Idea Foundation executive director Patrick Cummings.

“Fixed odds bets for racing won't replace pari-mutuel wagering, but rather complement our existing offerings, and meet modern customers with a modern product that they currently enjoy with widespread sports betting options.

“After adjusting for inflation, we estimate that mainstream handle on U.S. racing has declined by roughly two-thirds over the last 20 years. The pari-mutuel status quo with high takeout rates and the constant promotion of low-churn exotic bets have depleted our mass market customers. Fixed odds betting offers racing a chance to recapture those that drifted from the sport while introducing our product to new audiences.”

In a statement from the New York Racing Association published earlier this week by DRF, spokesman Patrick McKenna indicated the measure had NYRA's support and “presents an enormous opportunity for horse racing to share in the rapid growth and unrivaled success of New York State's mobile sports wagering marketplace.”

“Allowing mobile sports wagering platforms to offer premium horse racing content would generate untapped gaming revenue for New York State, attract new fans to horse racing, and deepen the sport's overall economic impact.”

TIF supported the expansion into complementary fixed odds options in its 2019 white paper, which can be reviewed here.

Last year was the first full season with fixed odds offerings for on-track customers at Monmouth Park in New Jersey, where the offering is managed by Australian firm BetMakers. Wider distribution to New Jersey customers, including ADW betting via fixed odds on Monmouth races and simulcasted races, is expected in 2023, the TIF reported.

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On Wednesday, Pat Cummings, the TIF's executive director, told an audience at the Global Symposium on Racing hosted by the University of Arizona Race Track Industry Program in Tucson that this incident was one of more than 60 purported pool manipulations he has documented at North American racetracks since the spring.

“The reason we wrote about that particular incident was because it was easily the biggest of more than five dozen incidents that we've tracked in the last six or seven months affecting, really, a significant number of racetracks, most of whom don't seem to know any of this is going on,” Cummings said.

And in the cases where regulators and racetrack operators do acknowledge that pool manipulation exists, Cummings said, they often believe the practice is victimless, without harm to the sport, or beyond their power to change.

All of those ideas are incorrect, Cummings said in a panel discussion titled “Illegal Betting's Threat to the Racing Industry.”

“I've approached regulators across America with this,” Cummings said. “And they say, 'Well, it is handle, right?' I mean, the tracks want this money…”

Cummings trailed off midsentence, giving the impression that industry bigwigs often shrug when faced with evidence of pool manipulation (Gulfstream, however, did discontinue quinella wagering days after becoming aware of the Nov. 11 pool irregularities).     A recent report titled “The State of Illegal Betting,” compiled earlier this year by the Asian Racing Federation, exposed the proliferation of unlicensed and unregulated online horse racing and sports wagering companies. The report found the global demand for online wagering is increasing faster than industry's ability to react. The suspicious betting patterns detected by the TIF in American pools may have a connection to non-pari-mutuel bookmaking.

Wednesday's panel, which also included global perspectives from Matt Fowler, the London-based director of integrity for the International Betting Integrity Association, and Martin Purbrick, the chairman of the Asian Racing Federation's Council on Anti-Illegal Betting and Related Financial Crime, outlined some major threats and discussed what actions could be taken going forward.

But it was the presentation by Cummings–who isn't even a regulator or investigator, but is more akin to an ombudsman for U.S. wagering–that hit closest to home for most stateside racing stakeholders.

Cummings said the first fundamental step is to recognize that pool manipulation is never going to be eradicated entirely. It's not even explicitly illegal. A good chunk of it, he said, occurs with the aid of the “vast” gray-market global bet-booking business whose handle is “far in excess of the legal market, and it has infiltrated American racing. There is absolutely no question.”

Cummings gave an overview of how a manipulator might work, using show pools as an example. (If you want to read a more in-depth TIF writeup on the process, click here.)

A manipulator might bet $2,000 to show on a horse or horses who look certain to finish in the money at a track where the fields are uncompetitive and/or short and the show pools are miniscule. But instead of betting that money in the pools, he instead spreads it across a number of different offshore bookmakers in smaller increments. These are bets he intends to win, and it's important to note that the offshore outlets don't often “lay off” this money into the mutuel pools.

In the same race, the manipulator then bets, say, $4,500 into the show pool on one of the longest shots on the board, and this money does go through the mutuels, making a horse who is unlikely to hit the board based on past performances the overwhelming favorite in that pool. This bet he intends to lose–it's a business cost whose sole function is to abnormally drive up the show prices on the more likely horse(s) to hit the board that he backed with the offshore bookies who pay the on-track prices.

If the race unfolds as the manipulator envisioned it will, the hapless heavy show favorite runs out of the money, while the more talented horse(s) he backed via bookmakers cruises home in the top three, triggering something like a $21.00 show payoff.

“So they sacrificed $4,500 to win maybe $21,000,” Cummings said. “The manipulator is spreading his or her risk, likely across multiple accounts, because the offshore operator may not pay them. That's just part of the risk.”

Cummings continued: “I don't see a lot of [bettors] talking about this or noticing it. And the reason is, if you bet an even-money shot to show thinking you were going to get $2.20, and [instead] got $21.20, who's complaining?”

That's an obvious example that should stand out, Cummings said. But this pattern occurs with more subtlety using smaller dollar amounts, he explained, like when a manipulator might be content not to make a single big score, but instead routinely inflate 1-to-5 shots in the show pool so they pay off like a 4-5 shot would.

And occasionally, the horse who was supposed to be a dud wins or hits the board, Cummings said. That's when bettors do speak up and complain about the pools not being on the level, because the big long shot they legitimately bet in the mutuels returns a vastly underlaid show payout.

That can lead to image and integrity problems, Cummings said.

“You do not want a bad name associated with your product. And every time someone manipulates your pool, if it's noticed, it's bad for your product,” Cummings said.

Beyond creating bad perceptions, Cummings said, rampant pool rigging could also encourage manipulators to get a bit bolder with their actions, perhaps by spending a bit extra to bribe participants to ensure desired outcomes in races.

“If someone's willing to bet $4,500 to show in a race where the winning jockey is earning $900, what's an extra $500 to make sure they don't run in the money?” Cummings said. “Or an extra $500 to the trainer to tell the jockey to maybe be a little slow out of the gate today.”

Cummings stressed that to his knowledge, there is no current evidence that pool manipulators are reaching out to arrange fixed races.

“That's a good thing–for now. But it's out there. And it happens. And there is no reason that others might not try to copy this,” Cummings said.

Cummings explained that he's a proponent of the “best defense is a good offense” strategy to try to keep pool manipulation at bay. The industry can do this, he said, by recognizing that our pari-mutuel system is ripe for being controlled in the manner he described, and by increasing stewards' awareness and oversight so there is a better focus on pool-watching.

A fixed-odds system might be a better long-term solution. But that style of betting is not completely immune from manipulation, either, Cummings said.

Reinventing our wagering menus could be an option, Cummings said, with an eye on pruning off the low-volume pools.

“Should a track that has offered win, place and show betting for the last 60 years continue to do so when the place and the show pools only average $1,200?” he postulated.

In that case, maybe the solution is to get rid of the place and/or show pools.

The proliferation of rolling horizontal wagers on practically every race card on the continent is also a hazard waiting to happen, Cummings said, because those bets, too, draw very little mutuels action and have low base-bet increments.

“We have to rethink the way we're doing this, because every small pool is a way to manipulate the outcome, to corrupt a participant, to help exact these sorts of outcomes,” Cummings said.

Cummings said he has spoken with various groups of officials and regulators over the past year about the problem of pool manipulation.

Their reactions?

“Interested, but [there was] very little they thought they could do about this,” Cummings said.

“This falls back on track operators. It falls back on horsemen's groups,” Cummings said, pointing out that the idea of looking the other way when pool manipulation occurs is not justifiable simply because it increases handle and thus fuels purses.

“If you don't recognize it, [or] if you bury your head and say, 'I don't want to hear about it–not interested,' it's going to keep happening,” Cummings said.

The post Sixty Incidents of Pool Manipulation. The Industry Shrugs appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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TIF was a vocal supporter and champion of the penny breakage provision, the first of its kind in North America as part of broader legislation designed to standardize pari-mutuel taxation.

“The total is even higher than $1.1 million, that is just in the Thoroughbred win, place and show pools” said TIF Executive Director Patrick Cummings. “The breaks from exotic pools and Kentucky's Standardbred races add even more to the total.”

According to the post, in previous times, if an unrounded $1 return for a bet was $5.0918, under the rules of dime breakage, an even $5 would be returned to gamblers. Under the new rules, a winning bettor receives $5.09.

“Based on observations across Kentucky's tracks and discussions with tellers, there has been a short acclimation period for everyone to get used to it,” Cummings added. “But now that customers receive a 'full' dividend, not only is there no going back, but we start looking elsewhere wondering why others are not as progressive as Kentucky.

“It's been seamless for ADW bettors and overall, the feedback TIF has received has been entirely positive.”

The penny breakage provision was included in Kentucky House Bill 607 and was passed by both legislative branches in March before being signed into law the following month.

“The legislative support to accomplish this cannot be understated, led by Representative Adam Koenig in the House and Majority Leader Damon Thayer in the Senate,” Cummings said. “They mustered the backing of a vast majority of their colleagues to be the first in America to right a multi-generational wrong.

“The penny breakage provision was a small part of a much bigger bill and it is paying back horseplayers that bet Kentucky races, enabling them to churn more across the sport.”

The Keeneland-hosted Breeders' Cup Nov. 4 and 5 will include the enhanced payouts for the first time, as will next year's Kentucky Derby and Kentucky Oaks.

“Other states and tracks should want the same, following Kentucky's lead. But until then, Kentucky pays you more,” said Cummings.

The post Better Than $1.1M Returned to Bettors Via Penny Breakage appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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In an unusual incident on Tuesday, Sept. 6, a horse reported to betting outlets as a scratch for 40 minutes prior to the start of a pick four sequence at Mountaineer Park was later unscratched after betting was closed and allowed to race.

Remarkably, all pick four bets placed were paid to the actual results.

“There are some similarities to the Modern Games (Ire) incident from last year's Breeders' Cup,” said TIF Executive Director Patrick Cummings, “and it proves that wagering rules are in desperate need of an update for the protection of customers.”

Click here to read the rest of this piece from the Thoroughbred Idea Foundation.

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This simple declaration was part of the National Thoroughbred Racing Association (NTRA)'s five-year strategic plan covering 2006 through 2010, and published in 2005.

Approaching two decades later, there has been little progress on the topic, and recent wagering incidents in the summer of 2022 highlight the long-term failure to address these problems.

If you think the stewards are always in charge of stopping wagering when the race begins, think again. A new revelation suggests that primary control of some bet types resided exclusively in the hands of a single, off-site tote company employee, potentially in violation of wagering rules in numerous states while also exposing a staggering vulnerability.

Click here to read the rest of this piece from the Thoroughbred Idea Foundation.

The post From the TIF: Cross Country Pick 5 Past Posting Exposes Tote Insecurities appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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