Giuliani to Lead Industry's Review of Tote Security

By Victor Ryan

Former New York City Mayor Rudy Giuliani and his consulting firm Giuliani Partners has been hired by a coalition of racing industry stakeholders to begin a systematic review of wagers made over the past year. It is hoped the audit, which could last upwards of one year and will cost in the millions of dollars, will spawn a "state of the art" electronic wagering system that can ensure bettors of pari-mutuel wagering integrity.

Giuliani Partners will be assisted in the review by the security arm of Ernst & Young, hired shortly after the investigation into the Breeders' Cup Ultra Pick Six began, and the Thoroughbred Racing Protective Bureau. The study will examine pick four and pick six wagers that meet certain criteria, which were not identified during a National Thoroughbred Racing Association teleconference on Wednesday. Initially the study will focus only on paperless transactions.

Giuliani will serve as the point person in the review along with partners Bernard Kerik, former New York City police commissioner, and Mike Hess, former vice chairman of the New York City OTB and New York City general counsel during Giuliani's administration. The firm was formed shortly after Giuliani left the mayor's office and has previously provided information technology safety consultation for wireless communications company Nextel Communications.

"This is not unlike problems faced by other American businesses," Giuliani said of pari-mutuel security. "What we will do over the course of the next six months -- or it could take devise a system that builds in the highest level of security that is possible."

Giuliani promised "very high standards" would be put on the review in order to "produce a system that is foolproof as can be."

The format of the review will not be revealed at the request of state regulators, said Tim Smith, commissioner of the National Thoroughbred Racing Association. He added all "large" payoffs in the past year could be reviewed, while "smaller" payoffs may be reviewed on a random basis.

"We don't want to help people by telling them what is being studied," Smith said.

The project is being funded by the newly formed NTRA Wagering Integrity Alliance. Among the founding members of the alliance are the NTRA, Breeders' Cup Ltd., Churchill Downs Inc., Magna Entertainment Corp., The Jockey Club, Television Games Network, Fasig-Tipton and the Keeneland Association.

Among the "supporters" of the Alliance listed by the NTRA are the Thoroughbred Owners and Breeders Association, American Quarter Horse Association, Del Mar Turf Club, Anonymous, NTRA member racetracks, Autotote, AmTote, United Tote, and Winnercom.