One Year Later, Pick Six Security Questions Remain

Each and every morning, the bad guys will be waking up, thinking of ways to try and beat our systems.

Lonny Powell, Assn. of Racing Commissioners International

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Last May, two days before Churchill Downs was to run the 129th Kentucky Derby, a family pulled up to a minimum-security federal prison in Lexington, Ky., about 70 miles east of Louisville. Nobody in the car was thinking about the Derby.

The Federal Medical Center, as it is called, is surrounded by a barbed-wire fence. At one time, it had been a women’s prison.

Christopher Harn got out of the car and began walking to the entrance. This was where he would be for the next year.

“Put some grit in your craw,” his father called to Harn. “I’ll be here when you get out.”

“Oh ... oh ... OK, Dad,” Harn called back, his halting farewell the result of stark reality and the stutter he has had since childhood.

Chris Harn, now 30, was one of the bad guys. He was the ringleader of the bad guys, actually, the mastermind who with two accomplices almost broke the bank in the Breeders’ Cup pick-six bet last year at Arlington Park in suburban Chicago.

“It could have been the perfect crime,” said one of their lawyers. “But they got sloppy. It was very fortuitous for racing that they were caught.”

The three had been fraternity brothers at Drexel University in Philadelphia. Because Harn cooperated with prosecutors, he was given the lightest sentence -- a year and a day -- for federal fraud. He has told friends that he could serve less than that, and may be released in March.

Derrick Davis, who is in a federal facility in Cumberland, Md., was sentenced to 37 months for his part in the scheme. Glen DaSilva, who is in Coleman, Fla., got two years. Davis and DaSilva, who are receiving credit for attending a drug-rehabilitation program, might be freed early in 2005.

This was the classic inside job.

Harn, who worked as a computer programmer for Autotote, the company that processes most of the country’s horse racing bets, was able to create a pick-six ticket after the first four races were run. Then the $1,152 ticket -- actually, the same $192 ticket bet six times -- was completed by adding all the horses that had run in the last two races.

Total payoffs would have been more than $3 million, but the Breeders’ Cup and the National Thoroughbred Racing Assn., alerted to the strange betting patterns by a curious Bill Nader and other officials at Aqueduct Race Track in New York, acted quickly and froze the payoffs.

No other bettors picked all six winners -- Volponi, winner of the last race, was a 43-1 longshot -- and the legitimate tickets, held by players with five winners, eventually were worth almost $44,000 apiece.

Today at the Breeders’ Cup, after the first four legs of the pick six have been run, some fans are bound to turn to each other and joke, “About time to put in our pick-six ticket, isn’t it?”

It is no joke to Autotote, which services Santa Anita, or a racing industry whose existence is predicated on customer confidence. Security improvements have been made in the last year, but there are glitches in the system, and as one person close to the case said, “There will always be the danger of rogue employees. And a rogue employee like Harn can be a dangerous thing.”

In a race in September at Belmont Park, where Nader also works, bets were being taken at 26 off-track betting sites as the horses thundered down the stretch. There might have been bets made after the race was over.

“We lucked out,” Nader said. “Not a lot of money was bet at the sites that remained open. We’re looking for Autotote to make sure the system is totally secure. They really have to tie the system up.”

One of the bets, Nader said, was a trifecta -- picking the first three finishers in order -- at Freehold Raceway in New Jersey.

The payoff would have been $10,400, but all the bettor has received to date is a refund of his $30 bet. The bettor plans to sue the tote company.

“We’re dealing with 20-year-old technology here,” said Nader, sounding weary. “The explanation we get [from Autotote] is that the system still relies heavily on human intervention. But this isn’t just a problem with Autotote. It’s the same situation with all four of the tote companies.”

Brooks Pierce, president of Autotote, and Lorne Weil, chief executive of Scientific Games Corp., Autotote’s parent company, declined to be interviewed for this story.

Pierce said that on advice from his attorneys, he couldn’t comment because of a lawsuit that has been filed by Jimmy “The Hat” Allard, a California horseplayer, against Autotote. A suit against Autotote by another California bettor was dismissed.

“On grounds,” said Michael Brown, the bettor’s attorney, “that California courts cannot adjudicate gambling disputes.”

Said Allard’s attorney, Joseph Lisoni: “What Autotote and the industry have said since last year’s pick six is a total whitewash. The software isn’t any different. What happened last year could happen again.”

Lisoni said that Allard’s suit has been allowed to go forward in California because it is about product (tote-system) liability, not a gambling dispute.

Today’s pick six at Santa Anita will start with the Breeders’ Cup Mile and run through the Breeders’ Cup Classic. There is a guaranteed pool of $3 million, which means that successful bettors will divvy up at least that much, less the takeout for commissions due the state, the track, a horsemen’s purse fund and other recipients. Of the $116 million bet last year on the Breeders’ Cup, $4.5 million was on the pick six.

Roger Licht, chairman of the California Horse Racing Board, and Greg Avioli, deputy commissioner of the National Thoroughbred Racing Assn., say that the “progressive scan” of exotic bets like the pick six is the biggest safeguard that has been installed since Harn & Co. almost tipped the tables. Now, all U.S. wagering outlets, in real time, can detect any attempted change to multi-leg wagering selections.

“The progressive scan is a very good remedy,” said Jim Quinn, who has written nine books on handicapping and is the bettors’ ombudsman for the NTRA. “I don’t know of a bettor, myself included, who knew last year that pick-six tickets weren’t scanned until after the first four legs had been run, and that just added to the outrage.

“Now, with progressive scanning, I’d say the system is 98% secure. It would be very difficult, even for someone on the inside, to do anything like what happened a year ago.”

The Thoroughbred Racing Protective Bureau has added to its staff J. Curtis Linnell as a full-time wagering analyst. A national chief of betting security is expected to be hired by January.

“[Hub] betting is a nightmare,” said Paul Berube, president of the TRPB, as he outlined some of the problems at an international simulcasting conference in Burlingame last month. “Secondary parimutuel organizations may be operating outside the regulatory standards. How their wagering activity is being conducted is not always well known. Shame on the industry for doing business with people they know very little about.”

Two years before the Breeders’ Cup at Arlington Park, the racing industry had been advised, after a study by IBM Global Services, to upgrade its betting technology. Racing considered buying one of the three major tote companies, but backed off because the estimated cost of $200 million was prohibitive.

“Could this happen again?” said Steven A. Allen, Davis’ attorney and a regular race-goer in Baltimore. “It’s always possible. If these guys had bet an extra $1,000 or so, instead of singling the winning horses in the first four races, nobody would have noticed. They had a sure thing no matter what they did, and came awfully close to going all the way. Anytime you’re not 100% sure about one of your employees, you’re at risk.”