CHRB Addresses Late Odds Changes

The California Horse Racing Board discussed and considered a proposal Sept. 27 that would require the final odds of any race in the state to be displayed "within five seconds of the close of wagering."

The proposal was not approved as a regulation during the CHRB's regularly scheduled monthly meeting at Santa Anita Park but was approved to be sent out for a 45-day public comment period. According to CHRB executive director Rick Baedeker, it revolves around the public perception that wagering might be occurring after races begin.

That perception is based upon the display of odds changing, sometimes dramatically, on simulcast feeds and on track after the race has started. The statistic referenced by Baedeker and other board members is that 65% percent of bettors surveyed in 2004, according to Baedeker, think wagering is going on after races begin. That notion is dispelled by industry experts, and the late odds changes have been explained as the consolidation of money in pools flooding into the tote system through various wagering hubs, but Baedeker still feels the perception needs to be addressed.

"The conclusion 65% of the customers believed—believed—that there was wagering taking place after the race had started. So that's the key integrity issue we're really talking about here," Baedeker said. "You can explain all the 'double hops' (when pools, like those in Florida and Nevada, need to move from those locations to a hub, then to the main pool at the track) in the world to the customers, and they saw what they saw.

"That's the foundation, or premise, of bringing this to the board."

Later in the discussion, CHRB commissioner Fred Maas went even further regarding public perception.

"I'd invite anyone to go to (off-track betting facility) Striders or one of our other licensed facilities around the state and be there when this happens. ... What people believe is the race is fixed," Maas said. "And I don't know if we have a technological solution to that, but I applaud (Baedeker) for at least putting this out there, aspirationally, to see if we can come up with some solution that bridges the technological divide but also the integrity question that I think we can all recognize exists."

CHRB chairman Chuck Winner disagreed with Maas' "fixed" wording and attempted to clarify with his statement.

"I'm not sure, commissioner Maas, as much that people feel the race is fixed, (but that) some people feel that others have the advantage over what they have," Winner said. "So the average (member of the) betting public feels that some people have a certain advantage over what they have, and they're betting after the race starts. ... And that is what we're trying to deal with."

David Payton, a vice president at AmTote International (a wing of The Stronach Group), the tote service used in California, spoke during the discussion in front of the board and said a 10-second window would be more feasible. He also said 10-second odds cycles from three minutes out from post time have been deployed at New York Racing Association and Maryland Jockey Club tracks in recent months and have been successful.

"Ten seconds won't be the answer to the fact that there's always going to be money coming in close to the bell," Payton said. "That's always going to be the case. But changing it to 10 seconds—I don't have any hard data yet—but it seems to have smoothed out the process with the large money that's coming in ... so you don't see a major impact.

"As we get close to post time, the big money that is coming in is coming in at certain increments, and if all of that big money doesn't come in at the same time ... then the odds will flatten out and you won't have a big jump. If you wait 20 seconds, everybody's big money comes in at once."

With some older display systems still in place, Payton said, "Going faster than 10 seconds might be a problem with those devices not being able to work properly. We think the 10-second number is the right number at this time."

But of the solutions presented to combat what is openly described as an issue of perception, not an actual issue of wagers being placed after races start, each seems to create extra issues.

The Thoroughbred Owners of California took issue with the proposal as written, specifically related to the five-second requirement. TOC  president and chief executive officer Greg Avioli had to leave the CHRB meeting early and missed the discussion, but later said that with the proposed five-second requirement, wagering would likely have to close before races begin, which would have a negative effect on handle.

"If the rule were to go into effect with the technology that is currently in place—to handle that, if the technology doesn't improve, the alternative would be to shut the betting pools down earlier," Avioli said. "That's the only way I see it working. The suggestion has been thrown out by CHRB staff to shut off wagering when the first horse goes into the gate, and that would have a major impact on betting."

Bettors could, in theory, be conditioned to get wagers in before horses enter the gate rather than before the gates open, but that would present new challenges as well, such as the inability for a bettor to cancel a wager should a horse act up or break through the gate before the gates open.

A lot of the criticism about late odds changes tends to fall on computer bettors, who are accused of wagering heavy late on overlayed horses based on algorithms, but The Stronach Group's Tim Ritvo pointed out after the meeting Thursday that changes in policy might help perception but ultimately aid computer bettors.

"If you stop betting two minutes before (a race), the computer wagers will have a bigger advantage than they have today, because right now they don't know exactly when that race is going to go, so they have to keep firing away and recalculating," Ritvo said. "You'd be giving the computer guys a bigger advantage because they'd time their algorithm to one second (before a race). The odds wouldn't change (late), but they'd have more of an advantage."

Ultimately, the best solution would be to revamp the American tote system so the multiple systems work better together and cut down on the late surges in money, but whether that is an attainable goal remains in question.

"What I hope is the tote companies focus on the problem, modify the technology anyway they have to, and come back before the board when this gets back on the agenda, probably in four or five months, and say, 'We don't need to do this. As you'll note, there hasn't been a precipitous drop since we've made changes. It's fixed,'" Baedeker said.

But it's hard to ignore that the CHRB might be tilting at windmills, in that the regulatory body is addressing the perception of a problem that essentially everyone involved admits is not a problem in reality.

"There is no evidence people are past posting (wagering after a race starts) in any meaningful and significant way," Avioli said. "That's not what this is really about."

But Baedeker said the open discussion was "healthy."

"From a staff standpoint, this is a healthy process," he said. "We go ahead and put it forward, and the board either moves forward with it or rejects it. They had that opportunity today, and they'll have more opportunities when it comes back (from the public comment period)."