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Tuesday, December 17
Does Pick Six scandal have a silver lining?




The Breeders' Cup Pick Six scandal has been a badly needed wake-up call for an industry that is determined to correct all security lapses, expose whatever frauds may have taken place in the past and is finally ready to treat its customers with more respect and take care of their needs.

That opinion comes not from Tim Smith or some NTRA toady or flak, but from Jim Quinn, a horseplayer and handicapping author who, like many, was convinced the industry had a "drop dead" attitude toward its customers. The reason his thoughts are so pertinent is that he, better than anyone, understands all sides and every aspect of the integrity issues the racing industry has had to deal with since the fiasco rocked the sport. Quinn knows what the customers want. He's a professional player and a handicapping author. He sees what the industry is doing and where it is headed. He's a member of the Wagering Technology Working Group that was put together by the NTRA to delve into security and consumer confidence problems.

"I have been very impressed with the leadership and what Tim Smith has done and with the changes that have already been made," Quinn said. "This has been a positive experience for me, and by extention, the players. They have listened to my views and they have responded to them."

Quinn was happy to help when asked to join the industry task force, but the invitation didn't ease his skepticism. Cynicism and playing the horses go to together like salt and pepper; the bettors largely believe the industry doesn't care about them, and they haven't necessarily been wrong.

But there's nothing quite like a crisis to slap some sense into people. Consumer confidence became a vital issue the second it was revealed that Derrick Davis' Pick Six bets may have been bogus. If the customer lost faith in the wagering process then only fools and suckers would still play the game. The industry could have told everyone that things were fine, that the Breeders' Cup Pick Six was an isolated and fixable problem and then done nothing to ferret out any other cases of bet tampering. Quinn said they figured out very fast that wasn't the thing to do.

"They hired Powell Tate, which is a crisis management firm, and they got some good advice from them," Quinn said. "One of the basic principles of crisis management is to get all the information out. Tim Smith made it clear that that's the way it was going to be done and it's been happening that way."

The NTRA and member racetracks have put the wheels in motion to eliminate the security gaps that Autotote computer programmer Chris Harn admittedly took advantage of to rig the Pick Six wager. In the near future, tote companies will no longer be able to transmit Pick Six information after four or five of the races in the wager have already been run and no betting outlet will be allowed to accept touch tone telephone bets without have a recording device in place. It's also certain that the tote companies will keep far better tabs on their employees.

Having done that, it would have been easy to say that all the problems have been solved, but that wouldn't have been enough to calm consumer suspicions that people were routinely being scammed by rogues other than Harn and his accomplices. The NTRA intends to find out. According to Quinn, a comprehensive review of winning Pick Six wagers placed in 2002 is underway and it will cost the NTRA between $3 million and $4 million to take this much needed look back. Rudy Giuliani's group will do much of that work, but Quinn himself has already been busily studying stacks of tickets from players who had five of six winners on their Breeders' Cup Pick Six tickets.

"I am not so naive to believe that there have not been any other examples of fraud or efforts to manipulate the system," he said.

As Quinn sees it, these efforts are necessary, but not nearly enough. There are still dozens of issues beyond the Pick Six scandal that rankle horseplayers that need to be addressed. Apparently, someone is listening to him. And that's what has him particularly upbeat about the process.

"What I hope happens is that once we move beyond the security issues we will get into elements of fairness and get reforms on those aspects," Quinn said. "There is going to be a pari-mutuel wagering task force that will be formed and its charter will be to identify other concerns and irregularities that players want to see corrected."

With that in mind, Quinn was in contact with some 200 big bettors, seeking their opinions and concerns following the Pick Six scandal. What he found didn't surprise him. While people were outraged by the scandal they were reasonably confident the industry would fix the problems. But they were equally upset about other issues that never seem to get addressed.

According to Quinn, the Big Four, were:

  1. Customers hate the fact that they are automatically assigned the favorite in a Pick Four or Pick Six race where their selections have been scratched. "It is far too arbitrary to just assign someone the favorite," Quinn said.

  2. Players want to see prospective payoffs on some of the bets where that information is not now available. Want to know what a trifecta or a Pick Three might may? Good luck.

  3. Big bettors in particular are outraged that the IRS is allowed to withhold so much of their winnings when they cash a bets that pays off at odds in excess of 2,500-1, often the case with Pick Six and Pick Four wagers.

    "The withholding threshold is way too low," he said. "I talked to a guy who bets between $8 million and $10 million a year and he says that in a normal year the IRS withholds between $400,000 and $600,000 of his money. He's furious about that."

  4. Customer complaints about excessive takeouts have yet to be addressed by an industry that doesn't seem overly concerned that the high takeouts make winning in the long run nearly impossible.

Will these issues be addressed? Prior to the Breeders' Cup, there was no chance that they would have been. The sport will never be the same again and the industry will never take its customers for granted the way it once did. At least that's what Jim Quinn believes. Let's hope he is right.




 




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