Breeder's Cup Scandal - Just a Little Too Lucky

Just a Little Too Lucky
By BILL SAPORITO
Time, Nov. 25, 2002

If this tale had a racing pedigree, it would be by The Producers out of Guys and Dolls. Goes like this: three wiseguys--old college frat rats, now computer wonks--hatch a scheme to rig electronic bets on the horses. A scheme so good, they can't lose. They don't lose. They win big. Real big. Lotto big.

Too big, perhaps, which is why Chris Harn, Derrick Davis and Glen DaSilva, all 29, are facing federal fraud and conspiracy charges in White Plains, N.Y. Had a few more railbirds or telebettors got as lucky at the Breeders' Cup races on Oct. 26, track officials in Arlington Heights, Ill., might not have noticed a curious wagering pattern--part of a day of gambling that made one solitary punter $3.1 million richer. But when a 44-to-1 shot named Volponi blew away the field in the final race, he left behind thousands of Ultra Pick 6 losers and only one winner: Davis, who held all six winning tickets. What were the odds of that happening legit? Next to zero, say track officials, who withheld payment and started investigating. U.S. Attorney James Comey says the three frat brothers exploited a gap in horse racing's data network that allowed them to change their wagers after races had already been run. Harn allegedly used his job as a senior programmer at Autotote, which processes wagering for many U.S. tracks, to alter Ultra Pick 6 bets that Davis phoned in to the Catskill OTB (off-track betting) site in Pomona, N.Y. In what investigators believe was a kind of dry run for the Breeders' Cup, DaSilva placed similar bets in the weeks before, collecting more than $100,000. The three say they are innocent of any wrongdoing.

The men became friends while attending Philadelphia's Drexel University, known for its computer-science offerings. There they joined the Tau Kappa Epsilon fraternity, where they defied the wonk stereotype by adding club hopping to their considerable computer skills. After leaving Drexel, all three pursued work in information technology.

In Pick 6, players have to call the winners in six different races. With so many possible outcomes, even the best handicappers typically bet on more than one horse to win each race. Davis, on the contrary, "singled" the first four races, picking only one horse, in each case the winner.

When the long shot Volponi took the Breeders' final race, the winner's payout from the $3.4 million pari-mutuel pool was enormous and immediately suspect. "If the payoff had been $70,000 [per ticket] instead of $400,000, we might not have known," says Bill Nader, senior vice president of the New York Racing Association. "To that end, we were very fortunate."

What the Drexel three knew, say prosecutors, is that Pick 6 bets collected at off-site locations such as Catskill OTB aren't transmitted to the host track until the fifth race. Reason: the computer matrix that handles wagers nationwide was not designed to collect such exotic bets in real time. That time warp would give someone with access to the system a chance to change bets on the first four races after the results were in. Harn showed up unexpectedly for work at Autotote's Newark, Del., offices on Oct. 26 and logged on to the Catskill OTB site. He was fired a few days later. There's no direct evidence of tampering, say officials, because Harn knew that the Catskill OTB site is one of the few that doesn't record the telephone touch tones used in making a bet. Investigators eventually connected Harn with Davis.

That is what they call circumstantial evidence, but the feds like their odds. In the meantime, track and tote operators say they are closing any potential security gaps, scouring their records for previous big payoffs and praying they don't find any more funny business as they try to assure U.S. horse bettors--not exactly a trusting lot--that the $14.5 billion they plunk down every year isn't being taken for an electronic ride.

Improving Security In The United States Pari-Mutuel Wagering System: Status Report And Recommendations (pdf)

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