Scherf on Wagering Security 'Mission'

The head of Thoroughbred Racing Associations discusses topic at conference.

By Aleta Walther

Chris Scherf, executive vice president of the Thoroughbred Racing Associations, is on a “mission from God.”

Scherf outlined his spiritual calling during a joint conference of the TRA and Harness Tracks of America at the Hyatt Grand Champions Resort in Indian Wells, Calif. The conference began March 9 and runs through March 11.

“I am on a mission…from God,” Scherf said during his March 10 morning presentation, “Wagering Security: Fact or Fiction.”

“I am tired of hearing that somehow we have a tote system that is full of holes, that hackers can get into (the system) on a whim, that everybody is betting after the bell, and nobody is watching the store,” Scherf said.

While the Kentucky Derby Presented by Yum! Brands (gr. I), Breeders’ Cup World Championships, and a few other high-profile races were the only events showcased via simulcasting in the 1990s, today the public can bet on any race, from anywhere, at anytime.

“As low a technology industry as racing was in the 1990s, we have come a long way,” Scherf said. “We have delivered a tremendous innovation (in simulcasting)…however, there have been some unforeseen consequences; specifically we have lots of late money now. Most of our pools come in the last two minutes of betting.”

Scherf described a number of reasons for the late betting, including: less time between wagering opportunities; shorter mutuel lines at tracks; account wagering that allows people to bet at the last second; and computer-based wagering teams that make hundreds of bets just seconds before a race starts.

”We are getting more efficient at processing bets, allowing for late wagering which is causing the late odds shifts,” he said. “It is not someone hacking into the system and betting after the bell rings. There are backup plans and redundancies to enforce the stop-betting command throughout the simulcast network. We have to educate the public on how our betting protocols work and the safeguards that are in place.”

Given the complexities of modern technology, Scherf observed that past-posters cannot be locked out 100% of the time, but they will be locked out “99.999% of the time.” Of the 120,000 or so races run over the last two years, there have been less than a dozen such incidents, he said.

None of the incidents appeared to be “hackers,” just ordinary human or technical failures allowing bets in after the bell rang--these incidents arose from human error, such as unintentional delays by the stewards, tote room, or mutuel department to send out the stop betting command, he said.

Scherf maintained that two common proposals were “non-solutions.” First, monitoring each (tote) transaction “just doesn’t work,” particularly because remote sites typically send their betting data into the host-track pools in summary form; monitoring each transaction would impose tremendous costs with no real benefit. Second, shutting off betting “at post” would not prevent late odds changes, it would simply change the time at which they would occur, he said.

“We simply have to do a better job of educating the public as to the way the process works and all the safeguards we have,” Scherf said.