by Frank Angst

The California Horse Racing Board has approved Scientific Games Racing to operate in the state for another year after the tote company agreed to pay $200,000 in the aftermath of a betting scandal involving its Quick Pick wagering.

Scientific Games will pay the board $50,000 as reimbursement for the costs of investigating the problem, and the company will make a voluntary $150,000 payment to horse racing charities. Also, Scientific Games will pay refunds to people who placed Quick Pick bets at the problematic BetJet terminals since July 1, 2007, in California, as long as that person can establish placing that wager, including but not limited to presenting a ticket stub.

In May, the board terminated Quick Pick wagers in the state because an apparent Scientific Games computer problem was not including all program numbers in its random sequence. A Northern California bettor noticed the problem when he purchased 1,300 individual $1 superfecta tickets on this year’s Kentucky Derby Presented by Yum! Brands (G1). None of the 1,300 tickets included the outside horse in the race, No. 20, which happened to be winner Big Brown.

With the resolution, the CHRB announced that it has renewed the company for one year. CHRB Chairman Richard Shapiro said state racetracks select the tote company they wish to work with and then present the agreement for board approval.

Scientific Games still faces potential civil action. On June 30, Carl Woodmansee filed a class action lawsuit in United Stated District Court, Central District of California, seeking at least $5-million. In the filing, Woodmansee notes that he purchased Quick Pick tickets on numerous occasions since November 1, 2007, with the understanding that each ticket would offer a random selection of numbers.

The suit alleges that “there are tens of thousands of class members,” affected.

In its investigation, the board determined Scientific Games was aware of the programming error in October 2007 but did not disclose the problem.

Shapiro said the board settlement would not affect any actions by bettors taken against Scientific Games. As part of the agreement, the board will not be subject to any repayments. Kirk Breed, the board’s executive director, noted that random wagering is not a particularly popular form of betting on horses but said the board has a responsibility to maintain public confidence.

“Our primary focus has been to protect the integrity of racing and the wagering public,” Shapiro said. “We have received full cooperation from everyone involved. We have been assured by an independent third party that the problems relating to Quick Picks have been fixed. And Scientific Games has voluntarily agreed to make donations to worthwhile charities that benefit horse racing.”

Scientific Games will provide updates on the status of software enhancements that eventually could allow for the re-introduction of Quick Pick wagers. The Thoroughbred Racing Protective Bureau performed and independent review that indicated the programming changes have made the wager completely random.

Frank Angst is senior writer of Thoroughbred Times