Tote Company Settles Quick Pick Fiasco

Scientific Games agreed to payments in a dispute with the CHRB over software glitch.

Tote company Scientific Games has agreed to make a voluntary payment of $150,000 to charities benefiting horseracing causes and pay the costs of a California Horse Racing Board investigation into the quick pick wagering fiasco uncovered following this year's Kentucky Derby Presented by Yum Brands (gr. I).

Kirk Breed, executive director of the CHRB, said July 10 the agency has made no request for a criminal probe into the actions of Scientific Games and would not do so. During the investigation, a paper trail showed the tote company had knowledge of the computer software glitch affecting quick pick wagers on its BetJet series terminals as far back as Oct. 30, 2007, but did not report it to California authorities.

"We found no evidence of wrongdoing on the part of anyone involved, or anything close to it," Breed said.

Breed said racing authorities elsewhere had been made aware of the problem but had not communicated that information to California. It was not until a bettor at Bay Meadows purchased 1,300 quick pick superfecta tickets on the May 3 Kentucky Derby and noticed the number 20 -- that of race winner Big Brown -- was not listed among any of the 5,200 possibilities that the glitch became known to the CHRB.

"If that guy hadn't bought all of those tickets, we still might not know," Breed said.

In its review, the CHRB found that the error was the result of a programming problem in the betting terminal software that caused the last number from any field to be eliminated from the random quick pick sequence. The CHRB released its findings in a July 10 statement after board members met in closed session to discuss terms of the agreement following its June 27 public meeting.

“Our primary focus has been to protect the integrity of racing and the wagering public,” CHRB chairman Richard Shapiro said in the statement. “We have received full cooperation from everyone involved. We have been assured by an independent third party that the problems relating to quick picks have been fixed. And Scientific Games has voluntarily agreed to make donations to worthwhile charities that benefit horse racing.”

Scientific Games contracts with all racetracks in California to provide totalizator equipment and services. As part of the agreement, Scientific Games' license renewal, which came up for consideration during the course of the investigation, was approved for a one-year period. Breed said the company is replacing the error-prone wagering terminals, which have also been the source of complaints from pari-mutuel clerks at California racetracks.

After discovery of the glitch, the CHRB suspended wagering on the quick pick option May 9 and the order remains in effect, according to the agency.

Besides the $150,000 donation, Scientific Games agreed to:

-- Reimburse the CHRB $50,000 for the costs of the investigation into the matter;

-- Pay refunds to people who placed quick pick bets at the BetJet terminals in California between July 1, 2007, and June 2, 2008, as long as the person can establish placement of the bet through legitimate proof, including but not limited to a ticket stub. The reimbursement period will extend until June 2, 2009;

-- Provide updates every six months to the CHRB on the status of the implementation of software enhancements that eventually could allow for the reintroduction of quick pick wagers;

-- Conduct a quality assurance review of its systems and continue to do so in the future. The company will report the results of these reviews to the CHRB.

The CHRB announced it will take no further administrative action against the tote company or its affiliated companies, directors, officers, or employees.

In a separate statement released by Scientific Games, the company said it would make equal payments to the California Retirement Management Account, the Permanently Disabled Jockeys Fund, and the California Thoroughbred Health Foundation to support backstretch workers' family health services.

"We are grateful to the CHRB for working with us to help bring this matter to a close, and we are confident in the integrity of our system," said Brooks Pierce, president of Scientific Games.