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1. Introduction

The Year 2000 (Y2K) problem is being considered as the hottest topic these days. It is a potentially disastrous implication for most wagering systems which were developed a long time ago. Facing the Y2K problem, many totalization organizations have been putting a great deal of effort into upgrading their wagering systems. This is a golden chance for them to reengineer their old systems so that some advanced features can be included for improving their business.

IT development could be very expensive. Totalization organizations need a solid information technology strategy to ensure the efficiency and effectiveness of their IT development. As a result, their wagering systems will allow them to achieve and maintain their competitive advantage in the industry. This paper presents an architectural framework of a new wagering system which is being developed based on some important concepts such as Globalization, Multi-media, Mobility, Informative, Openness and Scalability. By incorporating the new design concepts, the new system will be versatile enough to cope with the continuous change of business requirements in the horse racing industry.

2. The Current Model

Most integrated wagering systems consist of two types of sales transaction processing systems, one for cash and another for telephone. A third control system is needed for consolidating betting information and providing integrated racing processing functions. Figure 1 shows the high level architecture of most existing wagering systems.

The Cashbet and Telebet support the operations of the Cashsale and Telesale centers where point of sales terminals are located. Transactions are generated by the betting terminals then sent over the communication network to the central site for processing and logging. The following is a brief description of the current model.

Systems Control System (SCS): SCS is a software system running on the main processor which interfaces with Cashbet and Telebet systems and display units such as Diamond Vision System, indicator boards in the race course and CCTV. It provides communication channels for integrated raceday control, display control and system control. Both Cashbet and Telebet interface with SCS for transmission of investment or collations and receive relevant raceday control functions performed by SCS, such as result and dividends, scratching and substitute information, and raceday parameter table input. SCS also performs raceday operation and control functions through the consoles installed in the raceday control room.

Cashbet System: Cashbet system supports all sell/pay betting terminals located both of on-course and off-course. On-course betting booths are connected to the central site are connected via a network of communication lines and level converters while off-course centers via another network of dedicated telephone lines and modems. It provides the normal betting functions, cash control, raceday control, center balancing, telebet deposit and performance reporting facilities.

Telebet System: Telebet system is an on-line telephone betting system which supports betting terminals and administration terminals. It provides the normal betting functions, staff and account administration, raceday control and reporting facilities. Some Telebet systems also provide customer direct betting functions so that customers can place bets by using special betting devices at home.

Figure 1: Conventional Betting System

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3. The New Design Concepts

There are weaknesses in most existing wagering systems. They are basically developed for local markets and do not support global business expansion. From a technological point of view, they are conventional central systems without the flexibility for capacity expansion. They are also text based where staff and customers can not make good use of multi-media resources. The conventional business operation based on cashbet and telebet restricts the betting, payment and deposit process. When designing the new wagering system, it is essential to remove the limitations. We would like to discuss some fundamental concepts which drive the design of the new wagering system.

Globalization: The global interest in horse racing is growing rapidly. For wagering systems, software globalization is the process of enabling the system to communicate fluently to the native user, whose language is different from the language of the system developers. Several issues exist in this process that must be addressed, including character issues, translation of racing and betting information, multi-currency, multi-track, cultural and social issues, legal issues and management issues.

Multi-media: As multi-media becomes the trend of information technology, multi-media resources can be delivered to customers more cost effectively. In addition to text data, racing organizations should provide customers with audio and video of live races and previous races and graphical information to support customers’ investment decisions.

Informative: The gaming business attracts millions of customers and millions of transactions. Customers are keen to obtain racing and betting information to assist their investments. However, dispatchinginformation to all customers without differentiation would make the process extremely expensive. The wagering system should be able to solicit information, so that the racing organizations can improve their services. As a result, more revenue may be achieved. With more customer information, the marketing department can formulate marketing strategies and the betting development can introduce new pools for different target segments. Through account betting and the use of smart cards, the wagering system can help the racing organizations to perform statistical analysis to understand the customer needs.

Scalability: To satisfy the growth of the business of a racing organization, the wagering system should be designed to be scalable for different sizes of business operation. A new racing organization or a small organization should consider to begin with a smaller scale system which can be scaled up to a bigger system by adding hardware and with only little change to the software systems. A highly modulated design would ensure the scalability of the system. With a higher degree of scalability, the wagering system will protect the investment of the racing organization.

Mobility: The current forms of betting, payment and deposit are restricted in access to the number of outlets of the totalization organizations. Although some organisations have introduced home betting by using customer direct input devices and the internet, there is still a room for further expansion. The mobile phone facilities should be utilized to facilitate more betting and fund transfer activities.

Openness: The new wagering system should combine robust functionality with extensive technology choices, allowing racing organizations to implement their strategy for integration, computing platforms, and distributed processing. A highly modulated design will facilitate a heterogeneous hardware and software environment for achieving a high degree of openness.

4. The New Architectural Framework

Based on the mentioned design concepts, we propose an architectural framework for the new wagering system. The new system is expected to accept cash bets, telephone bets and customer self-input bets through internet, mobile phone and any other home betting devices. It is also designed to satisfy the requirements of high performance, reliability, portability and operability. It can easily be expanded to handle a higher volume of business throughput and include more bet types in the system. By adopting the concepts of Multi-lingual, Multi-media and Open Systems, the new wagering system will be equipped with the latest technologies that can satisfy the clients; global business expansion. Figure 2 depicts the structure of the new wagering system. The following are the brief descriptions of the major modules.

Totalization System: The Totalization System is a main software system which interfaces with the Telebet System and Cashbet System. It consolidates all investments from telebet, cashbet and home betting channels and converts all other currencies into the principal one. It is responsible for dividend calculation. It also supports the overall investment reporting for administration and accounting purposes.

Telebet System: It is an on-line betting system which supports telephone betting and customer betting through home betting devices. For the telephone betting, it supports the Telebet terminals to perform normal betting functions. Through the Telebet administration terminals, it provides staff and customer account administration, telebet operations control and reporting facilities.

Cashbet System: It is an on-line betting system which supports all Cashbet Terminals located both off-course and on-course. Off-course betting centers are connected to the Computer Centre via a network of dedicated telephone lines and modems while the on-course betting booths are connected via a high speed network of communication lines and level converters. It provides the normal betting functions, cash control, raceday control, off-course center balancing, telebet deposit and performance reporting facilities.

Banking Arrangement System: Once the Telebet operators have performed account arrangement for customers, the Telebet System would transfer all account information to the Banking Arrangement System for banking arrangement. There are different gateways for establishing electronic funds transfer through customers’ bank accounts, smart cards and credit cards.

Racing and Betting Information System: This system solicits racing and betting information from different sources, such as Racing Department and the Totalization System. Customers can get direct access to the racing and betting information via the customer direct betting devices. The information system supplies information to the Display Control System on a pre-determined basis. It maintains the corporate database which supports racing and administration applications.

Display Control System: It is a computer system which controls all display equipment, such as Diamond Vision System, Indicator Boards and CCTV. It is also used as a gateway to supply racing information to external organisations.

Race Control and Operations System: It is a computer system which allows systems operators to perform race day control. It also controls all equipment in the systems operations room. It displays the systems failure and equipment problems, so that systems operators will be able to inform maintenance staff to fix the problems.

Remote Betting System: It is a group of computer systems which will support home betting through customer direct betting devices, such as special betting hand-held terminals, Set-Top-Box and Mobile Phone. It can be regarded as an automatic Telebet System which allows customers to enter bets and receive racing and betting information through different telecommunication networks. The Remote Betting System consists of Communication Processors, Front Ends and a Security Module. Since remote betting is one kind of account betting, The Remote Betting System is attached to the Telebet System environment.

Internet Betting System: The Internet Betting System is a multi-media server which facilitates betting through the internet. It consists of a Betting Module, Security Module and a Video Server Module. Through the Video Server Module, customers can access the videos of previous races stored in the Video Server. Customers can also see the latest racing and betting information before and after they entered their bets.

Figure 2: New Wagering Systems

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5. Strategic Alliance

To ensure that the wagering system can be implemented effectively, the racing organizations should have support from a number of companies which play different roles in the business model. Therefore, the strategic alliance is the critical success factor of the new wagering system. The following are the key players of the new wagering system.

The Totalization Organization: The totalization organization is normally the owner of the wagering system. It will manage and operate the system. The totalization organizations key responsibilities include investing in the project, coordinating all involved parties, setting the standard and procedure of the business and managing the operations.

Financial Operator: It is essential to have the support from at least one financial institution who can provide the banking arrangements for funds transfer. It would be ideal to involve more than one bank in the business so that the coverage of banking support can be extended.

Other Business Operator: For using smart cards, it would be helpful if other business operators can join the program so that the smart cards can be of mult-purpose. Some major business operators who already have a large customer base should be invited to join as partners of the project.

Technology Partner: The system is a mission critical system which has high-availability and high-performance requirements. The system functions will have to be changed to cope with the market needs and to support new business operators who have special business requirements. It is essential to have a technology partner to look after the maintenance and on-going development of the system.

6. Conclusion

A wagering system is an important part of the racing business. Due to its real time and reliability requirements, most wagering systems are very expensive. While racing organizations are putting so much resources in establishing their betting systems, they should formulate a long term IT strategic plan so that their investment can be protected. A good wagering system will not only be able to handle a large volume of business throughput but should also help to improve the business. The proposed systems architecture is idealistic but highly achievable. To facilitate all proposed features, the racing organization should establish a good strategic alliance with some external parties to obtain the required support. Due to the rapid advancement of telecommunication and information technology, the racing industry will become more global. This means that cross-betting among different racing organizations will be established in the next millennium. The proposed wagering system is designed to meet the global need.

Copyright © 2001 Crossland Technology (Australia) Pty Ltd