WORLEY, IDAHO - The Coeur d'Alene tribal casino is offering to bring in
neutral third-party auditors to review its off-track betting operation in a
bid to win back New York horse racing simulcast signals.
In a Feb. 3 letter to New York racing officials, casino Chief Executive
Officer David Matheson said, "We are going above and beyond the call of
duty here to convince New York that our OTB meets the highest standards.
"They've unfairly lumped us in with OTBs that may have problems, and it's
important to undo this damage."
Matheson sent copies of the casino's "exceptionally strict" standards for
bettor identification and telephone wagering to Bill Nader, head of the New
York Racing Association, and Joseph Lynch, commissioner of the New York
Racing and Wagering Board. He offered to pay for independent verification
of the identities of all telephone bettors and to agree to annual outside
audits of its policies. He asked New York officials to resume signals to
the casino as soon as possible.
The NYRA, a corporation that runs the state's three most famous
thoroughbred race tracks, cut off race broadcasts and betting signals in
late January to the Coeur d'Alene and Tonkawa tribal casinos as well as
eight other off-site and international betting operations that offered
rebates to high-volume customers. The Racing and Wagering Board, state
regulator for horse racing and gaming (including Indian casinos), urged all
other race tracks in the state to follow suit.
The New York officials were reacting to a federal indictment charging a New
York gambling ring with money laundering and illegal betting, as well as
tampering with a horse race. The indictment mentioned the Tonkawa tribal
casino in Oklahoma as a conduit for the group's betting but did not mention
Coeur d'Alene, which also operates a "rebate shop." Neither tribal casino
has been accused of any wrongdoing.
"We've been made to look guilty by association," said Matheson, a former
tribal chairman and BIA official, "but nothing could be further from the
The NYRA is under close scrutiny, which some tribal casino representatives
believe contributed to its severe reaction. An independent monitor is
supervising its operations under a deferred prosecution agreement with the
U.S. Attorney's office. State government and potential rivals are
maneuvering in advance of the expiration of its state contract in December
2007, and there has been talk of canceling it even sooner.
In addition, the betting structure of horse racing is going through a
technological revolution, in which some tribal casinos are in the vanguard.
Account wagering via telephone and Internet has grown to a $2 billion per
According to a September 2004 report from a racing industry Wagering
Systems Task Force, the majority of this handle goes through what it called
Secondary Pari-Mutuel Organizations, or rebate shops, which remit five to
10 percent of the cost of a bet to high-volume customers. These clients
often use computerized robotic wagering, giving them a last-second edge in
Research for this highly sophisticated report was contributed in part by
the consulting firm of former New York City Mayor Rudolph Giuliani. The
report singled out "Native American gaming facilities" as a key component
of this new industry, which was targeted by the New York cutoff.
"Our standards for bettor identification and telephone wagering are
exceptionally strict," Matheson said, addressing one concern of the task
force. "We're willing to submit our OTB records to a neutral third party
audit to prove this point. Racing officials in New York have no basis to
doubt the integrity of our OTB, but unfortunately they've jumped to false
and unfair conclusions about us."
"We believe our verification system is much more extensive than at most
other OTBs and tracks, and we want New York officials to recognize this,"
he said. "We only ask to be treated fairly, and to continue to operate in
the best interests of horseracing here in Idaho and throughout the
Spokespeople at NYRA and the NYS Racing and Wagering Board were unavailable