Contact: Chip Tuttle (978) 804-3361
The NTRA Wagering Technology Working Group (WTWG) and Giuliani Partners LLC today outlined recommendations for improving the electronic security of the United States pari-mutuel wagering system. The recommendations were delivered during the 51st annual Jockey Club Round Table Conference on Matters Pertaining to Racing, held at the Gideon Putnam Hotel in Saratoga Springs, N.Y.
The WTWG Report recommends three key measures to improve security:
Create a National Office of Wagering Security
Establish uniform, minimum security standards for entities in the pari-mutuel wagering system
Enhance the technology infrastructure of the wagering system to enable incorporation of additional cyber-security measures.
“The Report finds that the steps taken in the aftermath of the attempted wagering fraud in connection with last year's Breeders' Cup were timely and effective,” said NTRA Commissioner Tim Smith. “In addition, a sustained effort is needed to ensure that any future attempts to compromise wagering security are detected and deterred. In this regard, we are no different than other industries that seek to compete and grow through electronic commerce.”
The Report concludes that a national office, headed by an individual with cyber-security expertise, will be responsible for maintaining security standards and for coordinating response to any incidents, including working with law enforcement officials and state racing commissions.
“The National Thoroughbred Racing Association and the entire horseracing community are committed to protecting one of America's most popular sports and entertainment activities,” said Rudolph W. Giuliani, chairman and chief executive officer of Giuliani Partners. “Horseracing fans can be confident that the actions outlined at today's conference will enhance the integrity of electronic wagering systems.”
The WTWG and a related funding organization, the Wagering Integrity Alliance, were formed in the wake of an attempted $3 million fraud involving the 2002 Breeders' Cup Ultra Pick Six by a now-former employee of one of the industry's totalisator (“tote”) companies. The former tote employee and his accomplices were apprehended, tried and imprisoned, with all monies from the Pick Six wagering pool subsequently paid, with interest, to bettors whose wagers were made legally.
Since the Pick Six incident, the pari-mutuel industry as a whole has implemented specific measures to ensure that the circumstances that led to the attempted fraud cannot be repeated, including:
Tightened physical security for areas housing tote systems
Immediate review and tightening of access rules for authenticated systems users
Industry-wide use of interactive voice response (IVR) recording equipment or similar technology to provide a back-up record of wagers made through the account wagering network
Developing and implementing “progressive scanning” software at all relevant U.S. wagering outlets. Progressive scanning software enables each outlet to detect in real time any attempted change to multi-leg wagering selections.
“These steps are vitally important for maintaining security standards,” added Giuliani. “They are a foundation for comprehensive, long-term improvement, and the industry is to be commended for moving so quickly and so substantively.”
The WTWG retained Giuliani Partners as its security consultant and also hired the Technology and Security Risk Services practice of Ernst & Young to assess the current wagering system.
The Working Group Report also recapped the WTWG's ongoing examination of other Pick Six and Pick Four wagers placed in 2002 to determine whether there was any evidence of more widespread fraud. After reviewing more than 1,100 Pick Four and Pick Six tickets that paid in excess of $10,000, the Working Group and Giuliani Partners have found no evidence of any further fraud beyond those incidents previously reported.
The Working Group's members are:
Paul Berube, president, Thoroughbred Racing Protective Bureau
Gary Carpenter, executive director of racing, American Quarter Horse Association
Dan Fick, executive director and executive vice president, The Jockey Club
Jim Gallagher, vice president of regulatory compliance, New York Racing Association
Ed Hannah, executive vice president, corporate development and general counsel, Magna Entertainment Corp.
Jay Hickey, president, American Horse Council
Frank Lamb, executive director, North American Pari-Mutuel Regulators Association
Alan Marzelli, president, The Jockey Club
Ron Nichol, director – program coordination and national standards, Canadian Pari-Mutuel Agency
Lonny Powell, president, Association of Racing Commissioners International
Jim Quinn, Thoroughbred racing fan ombudsman
Chris Scherf, executive vice president, Thoroughbred Racing Associations
Michael Shagan, pari-mutuel industry consultant
Tim Smith, NTRA Commissioner
David Sweazy, vice president of operations, Churchill Downs Incorporated
D.G. Van Clief, Jr., president, Breeders' Cup Limited
Supporters for the Wagering Integrity Alliance include:
Founding Members
National Thoroughbred Racing Association
Breeders' Cup Limited
Churchill Downs Incorporated
Magna Entertainment Corp.
New York Racing Association
Oak Tree Racing Association
The Jockey Club
TVG Network
Thoroughbred Auction Companies (Keeneland, Fasig-Tipton, etc.)
Supporters
American Association of Equine Practitioners
American Quarter Horse Association
Daily Racing Form
Del Mar Thoroughbred Club
Emerald Downs
Fairplex Park
Horsemen's Benevolent and Protective Association
Los Alamitos Racecourse
New Jersey Sports & Exposition Authority
Retama Park
Ruidoso Downs
Thoroughbred Horsemen's Association
Thoroughbred Owners and Breeders Association
Thoroughbred Owners of California
Winnercomm
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For the full report, click here.
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