NY Mandates Independent Betting Monitor

New York will mandate independent monitoring of pari-mutuel wagering.

The New York State Racing and Wagering Board approved a regulation April 28 requiring tote companies to provide for independent monitoring of all pari-mutuel pools effective Jan. 1, 2009. Roughly $3 billion—one-fifth of total handle in the United States—will fall under the new monitoring system.

NYSRWB officials said the rule has been under consideration for years. It is similar to a model rule adopted by the Association of Racing Commissioners International, which advocates the independent monitoring of pools and created RCI Integrity Services to develop such a system.

New York is the first major racing state to implement a rule mandating an independent monitor, RCI president Ed Martin said. Florida uses the audit function of the rule, while Colorado has a rule on the books but has not yet enforced it.

“I am optimistic that other jurisdictions will follow to not only protect the integrity of their domestic track pools, but eliminate a competitive advantage New York tracks will have starting Jan. 1, 2009, when they can legitimately claim to the betting public, particularly large bettors, that their pools are more secure because of the real-time independent monitoring precautions that are in effect,” Martin said. “All RCI-member jurisdictions have endorsed the real-time independent monitoring of pari-mutuel pools by passing a model rule requiring such. Some states are seeking state funds for monitoring, while others are moving to impose a mandate on licensees.”

Racing regulators in Kentucky and Minnesota are attempting to get state funding, Martin said, but that’s a challenge given tight budgets. As for passage of the monitoring rule, Indiana, New Jersey, and Virginia have discussed it, Martin said.

“We’re making progress,” Martin said. “I think passage of the New York rule hopefully will spur a discussion between the regulatory community and the industry on how to make this ubiquitous sooner rather than later.”

It remains to be seen what system or systems New York will employ for independent monitoring, which through the new rule is an "unfunded mandate." The NYSRWB will require licensure.

Real-time monitoring of pari-mutuel wagering was a major topic during the RCI annual convention in Austin, Texas, in late March. Despite growing scrutiny from the federal government, pari-mutuel wagering is believed to be the only legal form of gambling that’s not independently monitored.

Thoroughbred Racing Associations-member tracks employ the Thoroughbred Racing Protective Bureau to monitor pools and irregularities. Some believe a combination of the RCI real-time system and TRPB protocol is an option for the industry.