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Kevin Smith

Racing Operators Focus on Protecting Themselves

21 November 2002

A week after the Pick 6 scandal rocked the pari-mutuel betting industry, online gaming operators find themselves reevaluating their screening procedures for programmers and other employees.

Last week a former Autotote computer programmer and two of his college fraternity brothers were charged with wire fraud in conjunction with an investigation into a winning Breeders' Cup Pick 6 ticket.

"This incident has served as a wake-up call."
- Mark Wilson

Derrick Davis placed a Pick 6 bet on the prestigious Breeders' Cup races using his automated, unrecorded telephone account at the Catskill Regional Off Track Betting Corp. To win the Pick 6, a bettor has to pick the winner in six consecutive races.

After the first four races were run, Chris Harn, an employee of Autotote, which handles most of the racing industry's computer wagering, allegedly accessed Davis' Catskill account to alter the bet.

Not all of the six races had been run, so there was a window of opportunity enabling Harn to manipulate the bet. (The data didn't have to be transmitted until after the fourth race.)

By the time the bet was reported to the track, the computer record showed Davis had picked the winner in each of the first four races and had spread his bet in the last two races to cover every horse, so he couldn't lose.

A third man, Glen DeSilva also faces charges in the case.

The scandal has forced operators and suppliers in the interactive gaming industry to evaluate their security measures.

Mark Wilson, president and CEO of TVG, a leading U.S.-based provider of race wagering services, said the Breeders' Cup situation has caused pari-mutuel betting companies to be more vigilant in their self-policing procedures.

"This incident has served as a wake-up call," he said.

Wilson noted, however, that the problem says more about tote security than anything else. The TVG system, he pointed out, is separate from the tote; the two systems are managed entirely independent of each other.

"We have always believed IT security is a continuous improvement task because technology is changing constantly," he said. "This approach has provided us a reliable and effective security environment from which to operate and has protected us from the type of risk that resulted in the Pick 6 case."

Any technology system can be easily adopted for security measures. Built-in audits and screening processes can make it easy for companies to spot internal intrusions, as Autotote did, but what about preventing inside attacks in the first place?

" Our greatest risk of a security breach is from the inside."
-Alistair Assheton

Online casino and sports book operators face the issue every day, and those in the business say it is important to protect systems but even more important to screen employees using extremely high standards both prior to and after their hiring.

Alistair Assheton, the managing director of VIPSports, VIPRacing and VIPCasino, said his company does extensive background checks on anyone applying for a job and immediately crosses those with criminal records off the list. He said most operators' biggest risk doesn't come from computer hackers in Soviet Bloc countries, as perceived by many, but instead from their own employees.

"Our greatest risk of a security breach is from the inside," he said. "Because of that we have to be very careful who we hire and make sure there is no incentive for them to break into the system."

Assheton said many of his employees are among the highest paid workers in Curacao where VIP's operations are based. He acknowledge, though, that this still doesn't totally protect him from inside attacks. People often can be drawn to what they think is "easy" money, he said, but they also have to know that the risk isn't worth the reward in the long run.

"They have to know that if they get caught--and they will always get caught--then they are screwed," he said. "Not only is their career over, but long jail time will be in their future."

He added that most gaming jurisdictions require operators to report unusual transactions to the government, creating another hitch for would-be hackers. But he realizes that in this modern age of technology, nothing is out of the realm of possibility.

"It would be naive of me to say that it couldn't happen," he said. "But like with the Breeders' Cup, I think it would take more than one person to break into a gaming system."

Onshore, operators are not satisfied the situation is under control. In particular, the industry is concerned with the impression the Pick 6 scandal has given consumers.

"The horseracing industry is taking the necessary steps to address the security issues raised as a result of the Breeders' Cup Pick 6," Wilson explained. "If the end result is a more secure system, that will restore bettors' confidence."

Racing Operators Focus on Protecting Themselves is republished from
Kevin Smith
Kevin Smith