Wednesday, May 21, 2008

In a Pickle over the Quick Pick

Scientific Games Corp., whose disgraced employee was at the heart of the Breeders' Cup's pick-six betting scandal in 2002, is in trouble again. The chairman of the California Horse Racing Board, Richard Shapiro, has suggested that the New York-based tote company knew about a computer glitch more than three months ago, but didn't withdraw the problematic exotic bets until after Kentucky Derby day, when a Northern California bettor wagered $1,300 but was left without the winner, Big Brown, on any of his tickets.

The bettor, a horse owner who has not been identified, made 1,300 quick-pick superfecta bets, each worth $1, on the Derby. To cash a superfecta, bettors must correctly tab the first four finishers, in order, and by using the quick-pick method they allow the tote system to randomly give them selections. A $1 superfecta bet on the Big Brown-Eight Belles-Denis of Cork-Tale of Ekati finish in the Derby was worth $29,368.90.


The $1,300 bettor, who made his quick picks at Bay Meadows, examined his tickets after the Derby and found that Big Brown, No. 20, was not on any of them. He mentioned this incongruity to the trainer of his horses, who brought the matter to the Bay Meadows stewards. "The guy has accepted restitution," said a Bay Meadows official, who was willing to comment only under an assurance of anonymity. It is unclear how much the bettor was paid and who made the payment.

Apparently left in the lurch, however, are other quick-pick bettors who didn't save their tickets. The quick-pick bet has been suspended in California. A Scientific Games spokesman, Tom Hodgkins, said in an interview last Saturday that he could not estimate how much money was in the pool. Hodgkins, who was traveling, was unavailable for comment Tuesday night.

Leland Yee, a California state senator whose district includes San Francisco and San Mateo, where Bay Meadows is located, has asked for an investigation by the state auditor's office, and the California Horse Racing Board has already launched an investigation. Yee, in a statement issued Tuesday, said that it would be impossible to make 1,300 bets, totaling 5,200 combinations of horses, and not have Big Brown's number on any of the tickets.

"Certainly hundreds and potentially thousands of California consumers may have been defrauded," Yee said. "We have no idea who knew what and when."

Yee also questioned whether Scientific Games, which has a contract with the California State Lottery, may have had problems with quick-pick tickets in that area. In the lottery, Yee said, "millions of quick-pick tickets are purchased every year."

A spokesman for Scientific Games, Edward Furey, said Wednesday that the company is contracted in California only for instant lottery tickets. The quick-pick lottery tickets, Furey said, are handled by another vendor.

In an e-mail on May 15, 12 days after the Derby, to Ed Martin, president of the Association of Racing Commissioners International, Shapiro said that Scientific Games "apparently became aware of the problem in February, but they failed to disclose it to customers or certainly to us in California."

The problem apparently was not just for the Derby. The system, a Bay Meadows official said, was dropping all bottom horses from quick-pick bets. In other words, a bettor could not have been given the No. 10 horse in a 10-horse field, and so on. Regular exotic bets were not affected.

Shapiro said that the glitch also affected pick-three, pick-five and pick-six bets, and may also have contaminated other bets. Shapiro has not responded to a phone call and e-mails pertaining to the controversy.

"I expect if our initial findings are confirmed, an accusation will be filed against Sci Games," Shapiro said in his e-mail to Martin. "I find this extremely upsetting as I believe that this is a fraud that was perpetrated on the public choosing to wager in this manner. It is egregious that this was known to Sci Games, and not disclosed to us or other parties accepting wagers in this manner. This is a breach of the public trust."

In 2002, Chris Harn, who worked for Autotote, a Scientific Games subsidiary, and two former fraternity brothers from Drexel University conspired to rig the pick six in the Breeders' Cup at Arlington Park. Holding the six winning tickets, they stood to collect more than $3 million, but Breeders' Cup officials, alerted to the plot the day after the races, withheld the payoffs. Harn and his accomplices all pleaded guilty to fraud.

That scam might have worked had legitimate bettors also hit the pick six, but when Volponi, at 43-1, won the final leg, the Breeders' Cup Classic, the only winning tickets were in the pockets of the perpetrators. So, too, Scientific Games' latest gaffe might have escaped scrutiny but for one bettor: A guy who took a wild, $1,300 stab instead of handicapping the Derby.

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