A rogue computer software engineer, not an ingenious computer hacker, appears to be responsible for allegedly alternating a Breeders' Cup Pick 6 ticket worth $3.1 million, according to the tote company that handled the wager.
Lorne Weil, chairman and chief executive officer of Scientific Games, the parent company of Autotote Systems, said Thursday he fired an employee who had the necessary passwords to enter the intricacies of the tote system and the capability to alter the information it stores.
"Our data indicates this individual would have had the opportunity to alter the ticket," Weil said during conference call with analysts.
The software engineer, who has not been identified, allegedly worked with Derrick Davis, 29, of Baltimore who bet a $12 pick six ticket worth $1,152 though a Catskill Off-Tracking Betting telephone account. Catskill OTB's headquarters is in Pomona, NY, about 35 miles north of New York City.
Weil said the engineer apparently exploited a flaw in the way pick six wagers are handled. When a pick six pool is closed, the wagering information is immediately transmitted to the host racetrack. The information regarding the wagers, however, is not transmitted until after the fifth race in the series and then only the live tickets are transmitted. The wager is handled this way before of the volume of information that has to be transmitted along already congested communication lines.
"On any other kind of bet the information is transmitted immediately and nothing remains in limbo at the satellite location, as in the case of the pick six," Weil said.
Davis told the New York Post
earlier in the week that he did nothing wrong.
"If they got proof that I did something wrong, then show it to me," Davis told the newspaper. "If not, give me my money."
On Monday, the day Breeders' Cup froze the pick six pool, Weil and others associated with the country's three major tote companies--Autotote, AmTote, and United Tote--had said it was inconceivable that someone could hack into their extraordinarily complicated systems.
"Fortunately, our detection system worked the way it should," Weil said. "We were able fairly quickly to gather the information and pinpoint the individual."
Davis' wager attracted immediate attention because it was the only winning ticket and because of the way he made his bet. He selected one horse in the first four legs of the pick six then selected the entire field for the final two races. He made the $2 wager on this selection six times.
"Every big player in the country knows that was not a normal bet and that something happened here," said Ted Mudge, former president of AmTote, who now works for Magna Entertainment. "People who bet pick sixes make a primary bet and then make variations on that primary bet."
If Davis was not holding the only winning ticket or the ticket had not been worth so much money, Mudge said the incident may have passed unnoticed.
"Instead of holding six of 30 tickets and disappearing into the woodwork, Volponi came rolling in and left him naked," he said. Volponi won the Breeders' Cup Classic at odds of 44-1, the highest price in the 12-horse field.
Weil defended Autotote's auditing procedures and said any fraud, if committed, would have been detected regardless of the number of winning tickets.
"It would not have happened as quickly," Weil admitted.
At this point, Autotote does not appear to be financially liable for anything because no winning tickets, including the 5-of-6 consolation, have been paid. Davis also holds 108 of 186 wining consolation tickets. The consolation payoff was $4,606.20. If Davis' bets are voided, each of the 78 other holders of those tickets should collect an additional $35,699.
"This is a blessing in disguise because it exposed a weakness in the system that can now be dealt with in a way that no one will be harmed," Weil said.
Weil said he did speak with Thoroughbred racing industry leaders and plans are in the works to form a task force. He is confident that group will immediate tackle how pick six wagering information is handled and ways to allow the information to be processed immediately after the pool is closed.
Correctly the problem should not be that costly, according to Weil.
"The standard we have now goes back to a time when communication cost and communications efficiency was a fraction of what it is now," he said. "Because of the marginal cost of communication capacity and computing capacity, the cost of these changes should be relatively minor."
Who should bear those costs remains to be discussed.
A National Thoroughbred Racing Association and Breeders' Cup press conference addressing the pick six and the latest developments will be held today at 3 p.m.