On October 5, 2015, a New York Times article by (racing writer) Joe Drape and Jacqueline Williams reported on the emerging fantasy sports disgrace:

“A major scandal is erupting in the multibillion-dollar industry of fantasy sports, the online and unregulated business in which players assemble their fantasy teams with real athletes. On Monday, the two major fantasy companies were forced to release statements defending their businesses’ integrity after what amounted to allegations of insider trading, that employees were placing bets using information not generally available to the public.”

Only days later, on October 9, an article in the Des Moines Register pertained to shady doings in some state-run lotteries:

“Authorities believe a former Iowa Lottery official convicted in July of rigging a Hot Lotto drawing in 2010 manipulated at least two previous drawings that helped his brother and a longtime friend win more than $1.3 million from lotteries in Wisconsin and Colorado.”

How much these situations will negatively affect revenues of lotteries and sports fantasy games remains to be seen.  Class-action lawsuits are a certainty but how much the publicity will deter lottery and fantasy players is yet to be determined.

Like lotteries and fantasy sports, pari-mutuel wagering on horse racing is vulnerable to attempts to rig the outcome.  Rigging can take the form of actual race fixing (too many recent examples to recount with brevity) or interference with the technical mechanics of a wagering system (e.g., a computer programmer got caught conspiring with two friends to win the 2002 Breeders’ Cup Pick-6).

In referring to the aforementioned lottery scandal, Iowa Lottery CEO Terry Rich said:  “This case is a strong reminder of the need for ongoing vigilance against fraud, not only in the lottery world, but in society as a whole.”

While Mr. Rich is stating the obvious, it is still sound advice for racetracks and advance deposit wagering firms whose offerings depend on integrity.

Copyright © 2015 Horse Racing Business