It's hard to imagine modern day horse racing without all the numbers and without all the
computers that have to crunch those numbers.
Computers that calculate odds and payoffs.
Indeed, computers have had a major effect on all kinds of gambling, not just horse racing.
Going from computerized slot machines in Vegas to massive databases for professional gamblers.
Today we take a look at computers and gambling on this edition of the Computer Chronicles.
The Computer Chronicles is made possible by Leading Edge, makers of IBM compatible computer
systems including word processing with spelling correction, communication software, and Hayes
compatible 1200 and 2400 baud modems.
Leading Edge with over 1,000 service centers nationwide.
Leading Edge, leading the way to the information age.
Additional funding is provided by McGraw-Hill, publishers of Byte.
Byte's detailed technical articles on new hardware, software, and languages cover developments
in computer technology worldwide.
Welcome to the Computer Chronicles.
I'm Stuart Shafae and with me this week is George Morrow.
George, you got kind of interested down there at the racetrack so I got a daily racing form
here and this little computer.
I enter all the data here from the racing form into the computer and the computer predicts
which horses are most likely to win the race.
We'll see if it works.
It seems to me using a computer to figure out which horse is going to win a race is
really the same thing as using a computer to figure out say which stock is going to
win on Wall Street.
I think you're right, Stuart.
People that do this for a living that give you odds on horses are handicappers.
People that do the same thing or advise you about stocks, I think they admit to handicapping
a stock.
So here computers are helping you form judgments.
They're an analytical tool.
There's another aspect of gambling which is the chance part of it.
And there in games of pure chance I think computers are being used to help you entertain
yourself as you put your money in these machines.
George, we're going to see both those examples in fact on the program.
We're going to start out by taking a trip to Reno, Nevada to see how computers have
revolutionized the casino business.
Enormous casinos with extravagant neon displays.
Stacks of cards and chips on green felt tables.
And clanging slot machines.
These are the traditional symbols of gambling.
But in America's casino capitals, poker chips are increasingly sharing the floor with microchips,
especially in the slot machines.
Yeah, the poker machine is a prime example of that, which for all intents and purposes
didn't even exist ten years ago and it's approximately 34 to 36 percent of the Nevada market today.
At the International Gaming Technology Corporation in Reno, Nevada, slot machines have little
in common with their clanking mechanical ancestors.
These slots are sophisticated PCs controlled by an Intel microprocessor.
And they feature special graphics and sound chips.
They're even designed by a computer.
Putting a coin in the slot is almost like booting up.
Basically when you put your money in the machine, and let's take the example of a slot machine
and you pull a handle, at that point in time the microcomputer is programmed to pick a
random number, actually compute a random number using a 32-bit random number generator.
It will then take that 32-bit number and it will basically divide it down to a number
which is within the range of the number of symbols on the reel strips in the machine.
And it will determine what the outcome of the game is to be.
Since the game's outcome is determined electronically, the spinning reels are included just to preserve
the traditional external appearance of the game, an aspect of great importance to casino
operators.
In some cases the electronics scare them away.
To be specific, if we have a reel machine simulated on a video device and we have all
kinds of animation, and I think you may have seen some examples of that, that didn't necessarily
turn on the slot player.
It just was too much of a computer screen is our impression.
Whereas in a poker game it's the same technology involved, but they love that.
Concealed within the friendly interface is a high level of electronic security, such
as optical readers that can tell if a coin is being dropped in or pulled out of the slot,
and sensors that detect if a door is open or if someone has tampered with the reels.
Slot machines are tied into a local area network that transmits any discrepancies to the central
computer room, specifying the kind of fault and the machine's number.
At the Harrah's Casino in Reno, a game called Mega Bucks uses the latest in fiber optics
and even satellite transmission to tie hundreds of machines together to a central jackpot
computer.
As each coin drops, the amount of the bet is transferred by fiber optic cable to the
casino's computer center.
The mainframe recalculates and transmits the new jackpot to an LED display on the casino
floor.
The same system operates between casinos around the state over a satellite link.
Kino is another game that has been radically changed by computer processing.
While paper tickets are still written out by the player, all data entry, number reading,
and bet tabulation are done by computer, which can process the results of the game in about
22 seconds.
Harrah's machines are equipped with more than coin slots.
The new generation of one-armed bandits is more like the automatic teller machine at
a bank, with some important differences.
You can't make withdrawals or deposits, but the casino will issue personal identification
cards to any interested customer.
Joining us in the studio now is Robin Cobby.
Robin's president of Computer Sports World.
Next to Robin is Roxy Roxborough.
Roxy's an odds maker from Las Vegas and generally considered to be the top odds maker in the
country.
George.
Computer Sports World is a database of sports statistics.
It's owned by the Chronicle.
How does that work together?
Many newspapers in the last several years have wanted to get involved in new forms of
communication and communication database services.
Computer Sports World was one of those companies that was out there that was in a good market.
It was a good concept and it was something that the Chronicle was very interested in
pursuing.
This is almost a unique database.
Does anybody else offer anything like this?
Not exactly like this.
We're an online database, which means that if you have a computer and a modem or a communicating
terminal, you can sign on to us making a local phone call 24 hours a day.
And Roxy, you use this database?
Yes, it's an instrumental part of making the odds.
What's your opinion of it?
Well, I think it's fantastic because it takes a lot of time away that I used to have to
spend doing handwritten notes and keeping a lot of statistics.
So it keeps track of everything that you need to know to make odds.
Right, and it files and organizes everything.
Were you able, in fact, before you had computers and databases like this, keep track of the
incredible volume of stats and numbers to make odds?
Well, we did and we may do, but we do a much better job now.
So you feel that you're a lot more accurate having this database?
Much more accurate and you have to remember the gamblers have this database too.
So that's one of the reasons we need to keep on top of it.
Are you aware of people in the gambling business that use it as extensively as you do?
Yes, there are players, gamblers that use it, yes.
Robin, let's take a look at the system now.
Show us the kinds of things you can get out of this database.
We're online right now to your service, right?
Right.
The first thing we're going to want to do is, right now we're looking at it live, so
we're watching the information come right in.
The first thing a subscriber would see, it's very easy to use.
You only go in by entering three-digit codes and you'll get a menu that looks like this
that will lead you to that.
Right now we're looking at information coming in live.
If I want to look at a matchup, for example, which is a file that Roxy uses quite a bit,
I type in three digits and it immediately comes up.
So you can go anywhere in the system with three digits?
This is an NCAA basketball matchup, yes.
Three digits.
What do you get from that, Roxy?
Well, we have Georgia Tech and DePaul.
I see right away that DePaul is 13-0 at home.
That means they're unbeaten on their home court.
That's going to make them a pretty good favorite, even over a good ACC team like Georgia Tech.
I can see that Georgia Tech is only 6-6 on the road.
It also shows me all their spread records and it shows me the last five games that each
team has played.
Okay, so you can get home field advantage, all that kind of stuff.
What about NBA basketball?
Show us an example there, Robin.
Well, we have a box score we can take a look at.
After each game is over, we go over the box scores to make sure that all the key players
from both teams played.
Here's a game where San Antonio played Dallas last night.
Now, San Antonio's players are coming across right here where all their starters played
and their major reserves.
And then we'll check Dallas.
This is something you would do every day?
Yes, after each game is over.
What does this show you?
Well, right now I see where Dallas' star point guard, Derek Harper, didn't play.
In fact, he wasn't even a reserve.
So I'll have to find out why.
Those are beautiful presentations.
Okay, and how do you do that?
What are you doing, Robin?
We go right to the injuries.
314, the injuries for NBA.
Okay, so you've got a special injury database.
Right.
And then we'll check up to see if they have any reason that maybe Harper didn't play last
night for Dallas.
Okay, so let's get to Dallas.
What does it tell you?
Well, it says that Harper's got an infected toe and also reserve guard Al Woods has got
a strained left shoulder.
They both missed Friday's game.
They're expected to see limited action, if any, on Saturday.
So I know that when they play Golden State tonight, they'll have to make some slight
adjustment in the line.
Okay.
What about baseball, Robin?
That's a statistics crazy game.
What can you show us on baseball?
Baseball, let me show you the index of our baseball statistics.
This is where we really have a lot of statistics, baseball being so statistical.
And we do go back several years.
Look at that, yeah.
So you can see how left-handed pitchers do versus right-handers, how you do on astroturf
versus grass, how pitchers do after so many days off.
It's all there.
And it's very easy to get at, too.
Yes.
And Roxy, you would use all this stuff in putting the line on a baseball game?
I use a lot of it.
The keys are how teams do against righties and lefties and day-night performance.
Okay.
Can you tell us who's going to win the pennant this year, Robin?
We do have the odds on that.
We probably will.
Already in the game.
First, up there, Roxy provides that with us.
Well, if you're a New Yorker, you'll probably be happy because we've got both New York teams
favorite.
The Mets to repeat and win the National League, they're 7 to 5 favorites.
And the Yankees to be the American League champions, they're 7 to 2 favorites.
Roxy, there's lots of different sports that people gamble on, obviously.
I was wondering, any particular sport in which the computer's really a big advantage?
Yes, it's the biggest advantage in college basketball because we have to chart and track
162 teams.
There's thousands of variables.
There's injuries to chart for every team.
There's just so much that without this service, it would be almost impossible.
Huge database, then.
Yes.
I guess, Robin, as you said, you're the Dow Jones of the sports world.
I am the Dow Jones of the sports world, right.
Robin, Roxy, thank you very much.
As we saw at the beginning of the program, horse racing depends very much on computers
for its betting system.
And one of the newest and most modern computerized betting systems is here at Golden Gate Fields
in the San Francisco Bay Area.
Wendy Woods has that report.
While certain traditions at the track will never fall under the spell of technology,
the business of racetrack betting has at many fields been automated to a level as sophisticated
as the nation's election system.
Unlike the old days of just a few years ago, relay systems and tallying by individual clerks
have been replaced by massive computerized betting systems.
Here at Golden Gate Fields in Albany, California, the odds, the race results, and up to $3 million
in bets placed daily pass through seven continuously operating phone lines to the brains of the
operation, a mainframe at the nearby Bay Meadows racetrack.
Bettors can still go face to face with humans for their wagers, but the clerks all use terminals
linked up to the system.
The more adventurous bettor can use a self-serve betting machine or the newest touchscreen
terminals.
They bet and collect with vouchers that can be used for an entire day of winning or losing.
Even the tote board on the track is controlled and automatically updated by this one computer
system.
Marty Miller of Amtote is the brains behind the operation.
It's actually very simple because we have access to the computer at Bay Meadows and
I can go back to just any window in a plant here and tell them exactly where they stand
with their wagers, how many tickets they've sold, what they've done in their last four
transactions.
Sometimes if they forget where they are, we can help them balance out.
He adds computerized betting is not only efficient, it's honest.
22 years, every penny that we've ever handled in mutual handle has been accounted for.
We know exactly what each clerk sells.
We know exactly on the old system what they cashed.
They would balance it a penny.
We would count the tickets, what the payoffs were, how much the state got.
Every penny, every penny has been accounted for over the years.
Things haven't always gone this smoothly.
On the day that new cards were issued for the machines, the system crashed.
Golden Gate Fields officials soothed tempers by issuing free rain checks for a day that
the computers were back up.
Amtote's computerized betting systems are installed in thousands of racetracks worldwide
and that's a pretty good track record.
In Albany, California, for the Computer Chronicles, I'm Wendy Woods.
With us in the studio now is Bob Archer, president of PDS Software of Torrance, California.
Next to Bob is Professor Michael Orkin, co-founder of Best Bet Software.
George.
Roxy is a really good, skilled odds maker and he seems to have an edge by looking at
the data and understanding where he can get access to it, but he doesn't seem to be using
computers and doing any analysis.
Can you comment on that?
Well, if he had a program that picked the lines and there was a bias in it, the bettors
would pick up on it, any slight bias, and they would start betting accordingly.
And as a result, he'd get locked into a system that would cause the bookmakers to lose.
But couldn't he use a program to keep track of that and to modify that and to actually
become a better odds maker?
Well, I'm sure he uses computers to keep up with data, but if he had a program that actually
picked the line, he would have to keep modifying it because if there were any biases, maybe
some would occur from time to time.
But when he picks a line, he's going through analysis.
That's right, but it's a very dynamic process and he has to keep up with what's going on
and there's so many factors that for him to get locked into a program, which could be
very dangerous.
So he does, right now, he's doing better by staying away from a program.
Right, he's doing better by staying away from a program that actually picks the line.
However, he's relying on computers to provide him with all of the data that he needs.
Bob, you're handicapping horses now.
Is that also a little bit subjective or can you really reduce that to statistics?
No, it would always be subjective.
The computer is an instrument whereby the user would be able to manipulate all the data
to where he wants it so that he has it all in one mode to where he can use it to actually
make his selection from it.
Show us what you would do with your software here in Handicapping a Race, Bob.
Well, basically, our program would work under a principle of entering the data from the
racing form for each particular horse in this particular race today.
So what kind of variables do you have there?
Basically, we have three variables for the race itself and approximately 11 variables
for the horse.
First, you enter the horse's name, his number of starts, let's say, are 12.
He's got three wins.
He's got a total earnings of $67,890 and he's been away from the racetrack for 23 days.
He was second, let's say, in his last race at his first call.
Again, this is information you're pulling off the data in racing form.
Right out of the racing form, that's correct.
His track category, let's say he's racing at Santa Anita, his track category would be
number one.
The distance in his furlongs, he went a mile, so it's going to be eight furlongs.
His speed rating of his best race of the last three was 90 with a track variant of 12.
He had a top 10 jockey on his back and his trainer rating was a 12.33.
Okay.
Now, we've now entered profiles for three different horses.
Let's pretend it's a three-horse race now.
Can you go in and analyze these three horses now?
Yes, we would at this point come up with the next screen.
We'd enter zero and it's going to calculate and put all three horses in their proper order.
You've got a power rating suggesting that Bosto is most likely to win the race among
these three horses.
Bosto, that is correct.
Bosto is the favorite here.
He has a power rating exceeding 12 points.
We're looking for a three and a half point spread between the first horse and the second
horse in order to have what we call a playable race.
I see.
We're getting to the handicapper's own personal biases at that point.
Bob, what exactly is the software doing?
How is it coming up with that rating for those horses?
It is comparing the input of all the data on each individual item to a predetermined
set of standards that it has to compare against.
With a weighting factor.
With a weighting factor to each one of them that then comes up and compares all 10 of
them horses against each other.
Okay, Bob, if I can ask you to pass the keyboard over to Mike now.
Mike, you've got a program that helps a guy betting on football, not the horses, right?
Right.
And what does the software do?
The software has every NFL game since 1979 and it provides its self-contained database
that comes on one floppy disk and it allows the person interested in football to ask questions
about how teams have done in various situations.
Show us the kinds of questions you'd ask it.
Well, I've entered on the program now a look at all New York Giants games since 1983 in
which they lost the week before and played on the road the week before.
And a veteran might actually ask that question.
Yes.
This week the Giants might be playing at home.
They lost last week.
Maybe they really want to win.
Notice they've won at the top on the left.
They've won against a spread 66.7% of the time.
At the bottom, they've won at home against a spread 61% of the time.
Away against a spread two games.
You can also get a list of the games and see exactly what games were played under those
conditions, what the spread was, whether they won or lost against the spread.
Okay, Mike, things like, suppose I had a question about what's the home field advantage on a
Monday night game.
Okay, you can look at day of the week.
In fact, let's go down and do that and just look at all Monday night games since 1983.
So day of the week is down there.
In this case, the stats will come up just for the home team.
Is this an important question for a veteran?
Well, it's one of the many things that a better wants to know about when trying to decide
what team to pick.
What's the program tell you?
Well, that on Monday night, the home team has beat the spread 59.4% of the time since
1983.
So they got a little bit of an edge.
They have, well, they have a little bit of knowledge there that they might put in with
some other stuff that they'll also find on this database.
Mike, how much of an advantage is it really for a better to have a piece of software like
this and this kind of information?
It enables the better to answer a question in a couple of seconds.
It might take them a few hours to do by hand or maybe not even to be able to answer at
all.
So his edge here is he's got a lot of data altogether, right?
Mike, Bob, thank you very much.
Now, one of the most popular forms of gambling in this country is betting on state lotteries.
One of the oldest and most sophisticated state lotteries is the one in Pennsylvania where
they use computers quite a bit.
Each year, Pennsylvania sells more than a billion dollars in lottery tickets.
And when the jackpot gets big enough, that can mean a sales volume of up to one million
transactions an hour.
None of this would be possible without computers.
And indeed, the Pennsylvania lottery has a massive investment in computers.
Retailers sell lottery numbers from online terminals.
Computers recreate each day's games on a separate IBM backup system to ensure the integrity
of the games.
Computers are used to analyze sales, project jackpots and to monitor the actual betting.
The Pennsylvania lottery, in fact, runs one of the most complex computer networks with
nearly 3,000 terminals on a controlled data system.
The system has 100 percent redundancy and a hot backup.
So one rarely hears that the computer is down.
In 10 years, and your viewers would be interested to know that our uptime is 99.98 percent,
as close to perfection as you possibly could get with an online system.
I don't remember a major downtime since 1977 when we first began.
One of the primary functions of the computer system is to constantly monitor the lottery's
payoff liability to make sure that no one can break the bank.
On the Big Four game, which pays odds of 5,000 to 1, the computer makes sure that the state
is never exposed to a liability in excess of $5 million per game.
If it senses heavy betting on one particular number, in this case 11-11, it sends out a
warning and then cuts off betting on that number.
Heavy betting on a particular number often occurs because lottery players tend to follow
common patterns in picking numbers.
For example, when years ago when Pete Rose was with Philadelphia and he had his certain
number of hits, they played that number.
They played a Super Bowl score.
They play the Jewish New Year.
They play the Chinese New Year.
While the computer system assures a random drawing every time, the law of averages takes
a while to work.
We've had over 3,100 daily number drawings, pick three drawings, in 10 years.
However, there are two or three dozen numbers that haven't come up out of 3,100 drawings,
and there are only 1,000 numbers.
The lottery's computers have many safeguards to protect against being broken into.
Games are shut down exactly 168 seconds prior to the winning drawing so that all computer
tapes can be removed.
That way no one can enter a winning number after the drawing.
Often the computer experts here actually hire hackers and challenge them to try to break
in so that they can spot any weaknesses which may exist in the system.
Seven years ago, the Pennsylvania lottery did fall victim to a scandal, but it had nothing
to do with the computers.
Most of the balls which are used in the drawings were weighted so that only sixes would rise
to the top.
But a slow motion analysis of the drawing coupled with detailed computer analysis led
investigators to the culprits.
Drawing processing showed exactly where these bets were coming from.
We went to those retailers, found out who was sitting in the white Cadillac placing
all those bets, and basically were able to convict on the computer evidence.
But despite all the computers, when it comes to calculating the payoffs, no one trusts
the computers.
The numbers are crunched manually with a good old-fashioned desk calculator, some paper,
and a pencil.
When you're sitting alone in the middle of the night giving away millions of dollars,
you have to be absolutely sure you're doing it perfectly.
And that's our look at computers and gambling.
We'll be back in just a minute with this week's computer news.
I'm Susan Chase sitting in for Stuart Shafae in the Random Access File this week.
NCR Corporation unveiled a new line of personal computers.
NCR introduced two AT compatibles, one 286 machine and one 386 workstation.
The machines are based on NCR's incremental workstation architecture and will be available
later this year.
Hewlett Packard announced three new technical computers and said that the 930 and 950 business
computers announced in 1986 will finally ship this fall.
All five of the computers are based on the technology of reduced instruction set computing
or RISC.
Digital Equipment and Cray Research will soon introduce a new interface between their computers.
The new product, a combination of digital hardware and Cray software, is part of an
effort to speed up data transfer between the two companies' computers.
Digital will market the interface in an effort to step up pressure on IBM in the scientific
computing market.
And now it's time for this week's software review and here's Paul Schindler.
You know, maybe I would be better at this if I'd had a computer when I was young.
Well, to help your kids do better, here's some top flight Macintosh educational software,
Kids Time, a collection of five educational games.
Now first there's Connect the Dots.
When you're done, the computer redraws it.
Then there's A.B.
Key, which takes advantage of the Mac's sophisticated sound.
It names the letters your child types.
Match It is a matching game with logic.
It starts with a robot puzzle.
Each piece you get wrong, the computer pulls back out.
Kids Notes will play a song and will also allow you to compose and record your own.
Story Writer reads the story as you write it or all at once at the end.
Kids Time is world-class educational software for the Apple Macintosh, $50 from Great Wave
Software in Stanford, California.
For the Computer Chronicles, I'm Paul Schindler.
News from the spring context in Atlanta has started to trickle in.
Sharp plans to introduce two portables, one a clone of the PC-AT called the PC-7200 and
the other, the PC-4500, is compatible with the PC-XT.
And Samsung will show off its new clones.
The SAM-88T is designed to be XT compatible and the SAM-286 is an AT compatible machine.
Finally, Japanese companies are working on a new method of software distribution that
is designed to eliminate software piracy.
Called the Software Service System, the product is a box that attaches to existing computers
or could be built into new computers.
Software would not run on the computer until the box authorized it.
Users would purchase a special card to activate the box and give credit for any software the
user wanted to buy.
Users would be encouraged to copy software but be prevented from using it without paying
for it.
That's it for this week's Computer Chronicles.
The Computer Chronicles is made possible by Leading Edge, makers of IBM compatible computer
systems including word processing with spelling correction, communication software, and Hays
compatible 1200 and 2400 baud modems.
Leading Edge with over 1,000 service centers nationwide.
Leading Edge, leading the way to the information age.
Additional funding is provided by McGraw-Hill, publishers of Byte.
Byte's detailed technical articles on new hardware, software, and languages cover developments
in computer technology worldwide.