Automated Teller Machine Fraud Probed

Automated pari-mutuel tellers that accept bills have disappeared from several racetracks over the past few weeks because of fraud. In July, racetracks and tote companies discovered they were being ripped off by patrons who were “stringing” the automated betting machines. Stringing is a method of retrieving money out of a bill acceptor after the machine has read and recorded the denomination. Tote company and racetrack executives did not disclose how much money they lost.

“We have experienced some problems at our facilities,” said Karl Schmitt Jr., spokesman for Churchill Downs Inc. “There is an on-going investigation and, because of that, we cannot go into any detail.” The investigation was described as a comprehensive effort that may include city and state law enforcement agencies, and possibly the FBI.

The problems with stringing were reported at Churchill Downs-owned Hoosier Park and Sports Spectrum off-track betting parlor in Louisville, Ky., Keeneland, and Delaware Park.

Don Fuller, president of United Tote, said the fraud occurred with older machines that had older bill acceptors. He said the machines were changed immediately to accept only vouchers, and will be replaced by the end of August with state-of-art bill acceptors that do not allow stringing.

Ted Mudge, president of Amtote, said he was not aware of any particularly unusual cases of fraud. He said people regularly attempt to “beat” the automatic tellers, and that his company regularly works with bill acceptor manufacturers to stop different types of fraud.

“It is not an industry-wide problem, it is a countrywide problem,” Mudge said.