TIF: Pool Manipulation At Gulfstream Prompts Swift Action; Questions Remain - Horse Racing News | Paulick Report
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TIF: Pool Manipulation At Gulfstream Prompts Swift Action; Questions Remain

On Friday, November 11th, in the first race at Gulfstream Park, someone seemingly sacrificed approximately $18,000 in a brazen manipulation of the quinella pool. Additionally, some of the odds displayed during the race changed after the race had been run leaving bettors wondering just what was going on.

“We have been tracking pool manipulation across American racing for months and this race rates as the most significant incident to date,” said Patrick Cummings, Executive Director of the Thoroughbred Idea Foundation (TIF).

“Prior to this incident, track operators have shown little awareness or interest in what has been occurring in their pools.”

Gulfstream's quinella pool is usually its smallest pool. Across the next eight races on the 11/11 card, the quinella pool averaged just more than $4,100.

The first race quinella pool held $24,280. Of that, more than $18,000 was staked on combinations using 43-1 chance #5 Miss Grand Slam.

TIF wrote extensively on many of these same concerns in its April 2021 series, “Wagering Insecurity.”

“This incident has highlighted a few clear needs,” Cummings said. “Obviously, betting menus need to be updated and wagering technology needs a wholesale modernization. But besides all of that, customers must both be protected and feel protected, and it seems the industry is falling short of that at present.”

SO WHAT ACTUALLY HAPPENED?

By every other wagering metric, and a review of the past performances from the race, Miss Grand Slam deserved to be a longshot in the seven-horse field.

A juvenile filly owned by Marc Haisfield's Palm Beach Racing Partnership, Miss Grand Slam, was sent off at 43-1 in the win pool having not recorded a top-three placing in six starts entering the race. She was beaten a combined 109 lengths across two races at Gulfstream, when trained by Carlos David, and four races at Colonial and Charles Town, with current conditioner Angel Rodriguez.

Miss Grand Slam finished fourth, beaten 10 ¾ lengths.

The big quinella bets using her were all losers.

The race was won by 11-10 favorite Glass Star, owned by Roberto Andres Stipa's Reveron Racing for trainer Rodolfo Garcia. Second choice Too Much Vino, racing for trainer Rory Miller's Flying Finish Farm, completed the quinella. Click here for the Equibase chart of the race. A total of $19,000 was available in prize money to connections.

Shortly after the race, several horseplayers took to social media to discuss the oddity they found in the quinella pool. While not a social media user, business owner and daily horseplayer Frank Mustari was puzzled.

“I play Gulfstream every day, and I was surprised the winner went off as short of a price as she did,” Mustari recounted.

“So, I went back to my ADW and was looking at the pools and payouts and saw this huge amount in the quinella pool. It just jumped off the page. I don't normally play quinellas because the pool is so small.”

With the favorite winning over the second-choice, the $2 exacta returned $18.60. But the $2 quinella, which covers either outcome in the first two spots, returned $42.40.

“I saw the quinella paid more than double the exacta and it just generated all of these questions in my head, immediately.

“Was the outcome legitimate? Was the winner's performance enhanced in some way? Did the jockey hold the horse that got all the quinella money to make sure she didn't run second? Was anyone else involved in ensuring this outcome? As soon as I saw the strange betting, everything else came into question.”

In many circumstances, the quinella pays less than the exacta because it covers the first two horses in either position. One would have to box an exacta, making a second bet, to obtain the same sort of coverage.

The size of the pool, and the reality that most of the money was bet on a longshot, was suggestive of some sort of pool manipulation.

WHAT IS POOL MANIPULATION?

Pool manipulation was highlighted in Part 10 of the TIF's series, “Wagering Insecurity.” The topic has been addressed most recently by the Asian Racing Federation's Council on Anti-Illegal Betting and Related Financial Crime.

Legal, on-shore pari-mutuel pools can be manipulated while offshore, loosely or entirely unregulated and potentially illegal betting sites serve as a vehicle for bettors to profit from the manipulation.

Council member Thomas Chignell, executive manager racing integrity and betting analysis with the Hong Kong Jockey Club, explained the basics of pool manipulation in a May 2022 bulletin from the Council, a portion of which is reproduced below:

“Opportunities to profit from manipulating local horseracing tote dividends has    increased due to growth of illegal betting on horseracing. Illegal market operators settle bets at local tote dividends. The illegal operators keep the bets themselves rather than commingle the bets into the local tote pool meaning the final tote dividends are not truly reflective of the total weight of money on each selection.

“This creates an opportunity where the local tote pool can be manipulated to increase the dividend (and profits) on large bets placed with illegal market operators…

“The bets placed into the tote are placed upon selections which are highly likely to lose and not on the most likely winning selection. The bets are large relative to the tote pool size and significantly shorten the odds on those selections, and in doing so, inflate the final dividend of the most likely winning selection which is subject to much larger bets with illegal betting operators.

“For the manipulation to be successful the bets have to enter the local pool as close to the start of the race as possible to prevent other gamblers placing bets due to the odds change. On some occasions the bets have been placed so late into the pool that the odds have not changed before the race started and therefore removing the opportunity for other customers to place bets at the inflated odds.”

THE GULFSTREAM INCIDENT…STEP BY STEP

For the purposes of explaining this particular incident of manipulation, approximated times will be used based on the data reviewed by TIF and the clock on Gulfstream's own broadcast of the race. Gulfstream Park's own video coverage of the race shows the race beginning at 12:28.44 P.M., though it is likely this clock and the one tied to betting cycles are not synced.

Around 12:26.53 P.M., a total of $900 was invested in the quinella pool, of which just $62 was staked on combinations involving Miss Grand Slam, who was 22-1 in the win pool at the time.

Had the race been run at that point, and Miss Grand Slam finished in the first two positions, the quinella would have returned anywhere between $111 and $369, depending on the other horse in the combination. This would have been a reasonable expectation given how little Miss Grand Slam was bet in other pools.

The first bets signaling the manipulation were recorded around 12:27.05 P.M., about 100 seconds before the race began.

The quinella pool jumped from $900 invested to $2,099, with nearly all of the new bets placed in that cycle invested in combinations involving Miss Grand Slam. The total of bets using Miss Grand Slam went from $62 to $1,152, a rise of $1,090 in about 12 seconds, and accounting for over 55% of all quinella bets to that point.

The next two betting cycles for the quinella, which covered a period of just more than 30 seconds, saw a total of $234 in new money, with just $13 on combinations with Miss Grand Slam, or 6% of the new money bet.

About 20 seconds later, the quinella pool rose by $3,012, of which $2,652 was staked on quinellas involving Miss Grand Slam, whose price was rising in the win pool, up to 36-1 at that point.

Given all of the betting on Miss Grand Slam, the probable payouts in the quinella pool were plummeting. A $2 quinella bet using Miss Grand Slam and any other horse in the race would return you just $13 if she ran in the first two places.

Meanwhile, the same bet on Miss Grand Slam to win the race would have returned you over $70, and that number was rising as the start of the race loomed.

Another 13 seconds later, the quinella pool received $645 in new money, and just $6, less than 1% of the total bet, included Miss Grand Slam.

The next update of the quinella pool came around 12:28.35, potentially about 10 seconds before the race began, and included a total bump in the pool size from $5,990 to $8,844. Of this $2,854 in new wagers, some $2,652 was invested on combinations using Miss Grand Slam, bringing the total staked in the pool using this longshot to $6,475 of the $8,844 wagered.

Despite being so close to the start of the race, and with every other pool on offer reflecting Miss Grand Slam's chances as incredibly slim, the money kept coming in the quinellas.

In what appears to be the second-to-last pool update, at approximately 12:28.45, the quinella pool jumped from $8,844 to $19,492, a rise of $10,648. Incredibly, the wagering data viewed by TIF shows that $10,610 of that, some 99.6% of the money bet in that short span, was on every combination with Miss Grand Slam, what amounts to a $1,768 bet of Miss Grand Slam with every other horse in the race.

If the clock used on Gulfstream's video feed of the race and the timestamps of wagering data reviewed by TIF were similar, then the race had likely started just around the same time that update was received.

At this point, If Miss Grand Slam ran first or second, a $2 quinella was going to return about $11.

The eventual winning outcome, connecting favorite #2 Glass Star and second-choice #6 Too Much Vino, was projected to pay $81 as of this cycle.

However, the final cycle of betting is not reflected until approximately 12:30.13 P.M., about 88 seconds later. The race lasted just 66 seconds.

In that final update, the quinella pool grew from $19,492 to $24,280, a rise of $4,788, and an overall increase of about 25% from the previous pool update.

Among the bets during that period was another $1,088 in bets connecting Miss Grand Slam and the field. The total staked on combinations involving the now 43-1 outsider, who ran fourth, was an astounding $18,173, or 75% of the quinella pool.

Of additional note, however, is that the amount bet on the actual winning combination, #2 and #6, more than tripled during the apparent lag of 88 seconds from the time of the second-last cycle update and the final. The payout on the winning quinella combination dropped from $81 to $42.

“There are several really concerning elements associated with the betting on this race,” said Cummings, “and horseplayers, other track operators and regulators really deserve answers to understand the state of pool manipulation, the rising role of unregulated and illegal betting operators, the security of the betting pools, the increasing influence of CRWs and more.”

LATE CYCLE UPDATE ADDS TO CONFUSION

There is no reasonable explanation for Miss Grand Slam to get that sort of play in the quinella pool. While the quinella pools treated her as a heavy favorite, the filly accounted for between 2% and 3% of the win, place and show pools.

“This incident has many of the hallmarks of pool manipulation,” said Cummings.

“As pool manipulation was described by Asian Racing Federation Council member Tom Chignell, this incident offered dramatic, unexplained market movement on an unlikely outcome which has inflated the more logical outcome the race produced.

“Somewhere we don't see, the same customer or customers that facilitated the legal, manipulated bets likely engaged offshore operators, which share no revenue with tracks or horsemen, but pay track prices.

“Those operators got taken too, no doubt, and while there is no love lost there, the fact that a major track in America operated pools that can be manipulated, that can lead to regular customers questioning the integrity of the race and its participants, is troubling for anyone associated with the sport.”

After questions were raised about the incident by TIF to 1/ST Racing, they announced that the quinella was being removed from its betting options with immediate effect.

“Integrity and safety are the two cornerstones of 1/ST's foundation, and we are continuing to thoroughly review all actions associated with this incident,” said Aidan Butler, CEO of 1/ST Racing and Gaming. “Ensuring the protection of our stakeholders, including the important constituency who wager on our races, is of paramount importance.”

But this apparent coup was far from perfect.

“The last betting cycle for this race was not updated until well after the race was finished. This requires an explanation to the public,” Cummings added.

“It is possible the manipulating customers placed their bets slightly too early and the algorithms that drive CRW play were able to respond and take some of the value on the actual outcome. But I can see how some would speculate that some of the CRW bets sent in are almost always accepted in the last cycle no matter when they are sent. It's just impossible to tell unless you are the track operator or a regulator that demanded such information.”

The late cycle is visible in the on-screen graphics displayed by Gulfstream Park, taking note of the odds of #7 Principia. Below, the on-screen graphic in deep stretch shows Principia at odds of 14-1.

The graphics disappear nearing in the finish, but the odds reappear seconds after the race ends. Again, Principia is shown as 14-1.

But a few seconds later, the order of finish is posted and Principia is shown as having gone postward at 11-1.

It was during this period, based on the tote cycle information, that the last update of quinella bets were seemingly merged and an additional $4,788 added to the pool, which included the total staked on the winning #2-#6 outcome, which more than tripling.

TIF has asked 1/ST Racing for more details on the apparent late cycle update to betting on this race. If comment is received, this story will be amended to reflect that.

MONTHS OF MANIPULATION

TIF covered examples of pool manipulation in the quinella pools at Will Rogers Downs in April 2021 for its “Wagering Insecurity” series. In the intervening months, TIF has continued to record such incidents and attempted to educate North American racing investigators and regulators about pool manipulation.

“It's become clear that most regulators are not going to proactively do anything about this,” Cummings said.

“And I understand that it's not up to the regulators to set the betting menu or care about the public's betting preferences, but when you combine the illegal market opportunities, the chances to manipulate outcomes and question whether or not licensees are part of it all, it does seem like the regulators should show more interest in the topic.”

The total prize money paid out from Miss Grand Slam's race at Gulfstream was $16,900, but the total seemingly sacrificed in quinellas on Miss Grand Slam was around $18,000.

“It makes you wonder how much does someone have to win offshore to justify losing $18,000 onshore,” Cummings said. “And then even more, if a player is willing to lose that much to facilitate the manipulation, could participants in the race be corrupted too?”

The manipulation at Gulfstream is just the latest in a long line of similar incidents TIF has recorded in recent months.

“Overall, we have found dozens of races from many different tracks, most of them smaller circuits with smaller pools than Gulfstream.”

At least one similar incident did occur at a track owned by 1/ST Racing, and the Thoroughbred Idea Foundation has confirmed with that track's regulator that the manipulated bets were placed using Xpressbet, the ADW owned and operated by 1/ST.

In another previous incident investigated by TIF, a different state commission identified pool manipulating wagers were placed both via Fanduel-owned TVG as well as Xpressbet.

Executives at 1/ST told TIF they have a “full review” underway.

“No one company or individual is directly at fault for allowing this behavior,” Cummings said, “but it seems like many have been asleep to the threats this activity poses to the legitimate operation of racing and wagering. Let's hope that has ended with this incident.”

ACTION ITEMS

Moving forward, American racing interests must pay closer attention to the secure operation of legal, regulated wagering.

“That includes increased awareness of the threats posed by the illegal, unregulated markets,” said Cummings.

1/ST Racing shut down the quinella pool at Gulfstream Park just days after discovering the manipulation.

“Full credit to 1/ST, particularly Aidan Butler and Mike Rogers, for their swift action. Others should do the same. That includes the New York Racing Association, which operates a quinella pool twice a day, and Del Mar, which has one on every race.”

In its most recent day of racing, Sunday, November 13th, the exacta pool at Del Mar averaged $134,000 per race while the quinella averaged just $4,800.

“Given the threat to confidence and integrity associated with the pool manipulation, continuing to offer such pools is a risk and we hope NYRA and Del Mar consider joining Gulfstream in eliminating them.”

“All of this said,” Cummings adds, “the biggest day-to-day risks for manipulation reside in small pools at smaller tracks.”

“Show and daily double pools at mid to lower-level tracks have been manipulated on occasion for months.

“What seems like a pari-mutuel anomaly is really one individual, or a group of bettors, taking advantage of the legitimate operation of racing. No one is going to stamp-out unregulated betting, but tracks should not operate as if there are no threats and that everything should proceed as it always has.

“We have to evolve as a sport and a wagering product. Threats exist to the integrity of the sport and vigilance is required for the protection of all the sport's stakeholders, but particularly well-intentioned bettors.”

Concerning this incident, TIF Founder and Glen Hill Farm CEO Craig Bernick said:

“The Thoroughbred Idea Foundation seeks to improve the long-term sustainability of racing. That includes evolving our wagering landscape, the technology that drives it and the security functions to protect it. We must improve the competitiveness of racing's wagering business and build confidence with existing and new customers. Everything TIF has advocated for in recent years, if implemented, would make racing more appealing to new and existing customers. We think the best way for racing to survive, long-term, is to improve our wagering product to the greatest number of customers.

“Without proper action, all racing stakeholders are at risk.”

Below is the full statement released by 1/ST following questions from TIF on this matter.

15 November 2022

1/ST Racing and Gaming Issues Statement on Irregularity of Quinella Betting Pool

HALLANDALE BEACH, FL – 1/ST Racing and Gaming is aware of an irregularity of the betting pools for the Quinella on the first race on November 11th at Gulfstream Park.  The account from which this wager was played has been identified and that account has been closed.  Our team is working with the Thoroughbred Racing Protective Bureau (TRPB) and other agencies to investigate the full impact of the manipulation of the pools, which appear to involve offshore betting sites.

“Integrity and safety are the two cornerstones of 1/ST's foundation, and we are continuing to thoroughly review all actions associated with this incident,” said Aidan Butler, CEO of 1/ST Racing and Gaming. “Ensuring the protection of our stakeholders, including the important constituency who wager on our races, is of paramount importance.”

“TRPB's Wagering Integrity Unit is assisting the investigation into the betting,” said Curtis Linnell, Executive Vice President of the TRPB.  “There is no indication at this time of malfeasance by any participants in the race itself.”

Pari-Mutuel pools are, by their very nature, self-correcting as parties effectively wager against each other with the racing association taking the identical commission percentage on the bets regardless of the odds.  The odds are transparent as they are determined by the amount of money bet on an individual interest or, in the case of exotic wagers, on the combination.  Because of the manipulation, the Quinella wager on the race returned a higher price than it traditionally would have paid.

The Quinella wager is a marginal bet, generating much smaller pools than straight bets and other exotic wagers, thus it can be easier to manipulate.  Most horseplayers traditionally place an Exacta box bet instead of a Quinella – picking the first two finishers in either order.  Gulfstream Park has removed the Quinella from the betting menu effective immediately.

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