Illinois Racing Board officials said Thursday the computer security loopholes that are believed to have allowed an East Coast bettor to win $3 million on the Breeders’ Cup are a serious problem for the horse racing industry.
“We’d like to make it go away, but it won’t,” said Marc Laino, the board’s deputy director. “I guarantee this is a lot more serious problem than just the Breeders’ Cup Pick Six.”
Investigators are examining how a Baltimore man named Derrick Davis picked the winners of six consecutive races during the Breeders’ Cup on Oct. 26 at Arlington Park, using an off-track service based in New York. According to records, Davis used an unorthodox and highly illogical series of bets to win the $3 million against huge odds.
Autotote Systems Inc., the company that develops software for off-track betting parlors across the country, subsequently fired one of its software engineers, Chris Harn, saying he had the expertise needed to revise a Pick Six ticket after it had been purchased.
Autotote then alerted New York state police and racing officials, who opened their investigation.
Harn and Davis, who owns a computer services firm, were fraternity brothers at Drexel University in Philadelphia.
Investigators said this week that a third former fraternity member, Glen DaSilva, placed a similar Pick Four bet for the Oct. 3 races at Balmoral Park in Crete, using the same off-track betting service in New York that Davis used to place his Breeders’ Cup bets.
Officials say that bet at Balmoral may have been a test run for the Breeders’ Cup, to see if the plan could work using an Illinois track.
None of the three men has been charged, though Autotote officials said their internal investigation had “uncovered evidence of potential employee wrongdoing.” In an Oct. 30 interview with the New York Post, Davis denied misconduct, saying he picked a few horses and “got lucky.”
But Laino said the emerging scenario described by New York investigators points up a larger problem.
“You’ve got people who write software and who create firewalls,” he said. “And those are the people who know how to beat the software and get around the firewalls. If one of them is a bad apple, we’ve got a big problem.”
Illinois Racing Board member Bill Jackson called on Autotote and the two other companies that provide the hardware and software for parimutuel betting to improve their security systems.
Jackson, a former Illinois State Police trooper and mutuel clerk, said he was “not at all surprised” by the allegations.
“We’re in a technological age,” he said. “Technology has developed so quickly. . . . And people who have studied computers can do just about anything they want to do with these new machines.”
Suspicions were aroused not only by the odds surrounding the Breeders’ Cup Pick Six–two long shots were among the winners that day–but the manner in which Davis allegedly placed the bets.
Less than a half-hour before the races began, Davis phoned Catskill Off-Track Betting in upstate New York. Using a telephone account, he placed his bets using touch-tone prompts.
In an unusual move, Davis picked only one horse to win in each of the first four races and then picked every horse in the last two. His six winning tickets were each worth $428,392, and he also held 108 tickets with five of the winners, each worth $4,606.20. His total winnings: $3.068 million.
Using the same betting service and similar tactics, investigators said, DaSilva won about $2,000 on the Pick Four at Balmoral, and about $105,000 on a Pick Six at New York’s Belmont Park on Oct. 5.
Unlike most outlets that take phone bets, Catskill OTB doesn’t have a device that monitors touch-tone transactions and keeps an audio record.
Officials said Harn had a password that would have allowed him to access the computer records of all wagers from Catskill OTB being processed by Autotote. If he knew the serial numbers of the bets Davis and DaSilva made, he could have altered their selections.
“I think the fox was guarding the chicken coop,” said Billy Johnston, chief executive officer at Balmoral and Maywood Park. “This is the Autotote company and the Catskill OTB in New York that are at fault, not the Illinois racetracks and OTBs. The other states is where the apparent collusion happened.”
Johnston argued that Illinois’ system of requiring bettors to hold paper tickets is an important safeguard.
“To collect, you’ve got to show that ticket,” he said. “But in New York they’re taking bets on the phone and guys are sneaking in the back door.”
Although some Illinois horseplayers have telephone accounts in other states, the Illinois attorney general has issued a written opinion that it is illegal to make a bet over the phone.
Earlier this week, Johnston met with his sons, Balmoral President John Johnston and Maywood President Duke Johnston; the tracks’ mutuel manager, Bill Mudro; simulcasting director Jim Hannon, and wagering analyst Michael Antoniades to analyze parimutuel security.
“What would you think if somebody hits the lottery in New York and it was the same gas station where they sold them and the same guy bought all six?” Johnston asked. “Basically, that’s what happened. . . .
“What we’re looking for is something irregular and illogical–a payoff that doesn’t make sense–and the Pick Six at Arlington registered on all of them.”
The tracks are not directly impacted financially by illegal betting but have a stake in preserving the sport’s integrity.
If the investigations determine there was illegal manipulation, bettors who made legal wagers would get increased payoffs.
Anatomy of a betting coup
Tribune staff reporter Neil Milbert outlines the pattern investigators believe three 29-year-old computer experts followed in making a $3,067,821.60 hit in last month’s Breeders’ Cup Pick Six at Arlington Park.
Scene 1: Balmoral Park, Oct. 3
Glen DaSilva makes a phone bet with Catskill OTB in New York on Balmoral’s Pick Four, covering races 7, 8, 9 and 10. He picks single horses in races 7 and 8 and all of the horses in races 9 and 10. Before the ninth race, the details of the Catskill OTB wagers are sent to the Balmoral computer via Autotote, a tote company that employs Chris Harn.
Kim Hankins wins the seventh at 3.10-1 odds, followed by Farm Boy at 18.50-1, Star Siren at 5.10-1 and el Gees Mr. Q. at 2.20-1. The payoff for DaSilva’s winning ticket is $1,851.20.
Scene 2: Belmont Park, Oct. 5
DaSilva makes phone bets with Catskill OTB on Belmont’s Pick Six, covering races 3, 4, 5, 6, 7 and 8. He picks single horses in races 3, 4, 5 and 6 and all horses in races 7 and 8. Before the seventh race, the details of the Catskill OTB wagers are sent to the Belmont computer via Autotote.
Provincetown wins the third at 2.90-1 odds, followed by Strive at 1.35-1, Gritty Sandie at 5-1, Storm Flag Flying at 3-5, Green Fee at 9.40-1 and Imperial Gesture at 9-5.
Each of DaSilva’s eight winning bets is worth $13,070. He also has 12 consolation payoffs with five of six winners, each worth $113.
DaSilva collects $105,916.
Scene 3: Arlington Park, Oct. 26
1:14 p.m.–Derrick Davis makes phone bets with Catskill OTB on the Pick Six at Arlington, covering the last six Breeders’ Cup races–the Mile, Sprint, Filly and Mare Turf, Juvenile, Turf and Classic.
1:37 p.m.–Pick Six betting ends.
1:38 p.m.-3:25 p.m.–Domedriver wins the Mile at odds of 26-1; Orientate wins the Sprint at 2.70-1; Starine wins the Filly and Mare Turf at 13.20-1 and Vindication wins the Juvenile at 4.10-1. Harn knows the results. Davis has single horses in the Mile, Sprint, Filly and Mare Turf and Juvenile and all horses in the Turf and Mile. Did Harn open an Autotote computer and change Davis’ single horse bets to match the results and guarantee that he would hit the Pick Six?
4:01 p.m.–Post time for the Turf. Before the race details of the Catskill OTB wagers are sent to Arlington via Autotote. High Chaparral wins the Turf at odds of 9-10. Volponi wins the Classic at odds of 43.50-1.
4:44 p.m.–The Pick Six payoff of $428,392 is posted. Davis has all six winning tickets, plus 108 consolation tickets with five of six winners, each worth $4,606.20. The total return on his $1,152 investment is $3,067,821.60.
