Barrier Draw Independent Audit

May 2015

Independent Review of Barrier Draw Software Updates – May 2015

In May 2015 BDO (Formally PKF) were re-engaged by Racing Australia to follow up on the March 2010 review of the barrier draw. (See detail below of 2010 review).

BDO were asked to review the barrier draw software to see if there had been any changes or modifications made to it which may have resulted in a change to randomness of barrier draw allocations.

BDO reviewed the computer logic, validations layers and business rules associated with the barrier draw computer code and independently verified there had been no changes or modifications to the random number functionality computer code since the full review was completed in 2010.

BDO found no evidence that the barrier draw software in not functioning in the same manner as it was when BDO (formally PKF) conducted the previous review.
Based on this independent review confirming no change to the barrier draw computer code since 2010, analysis of actual barrier draws both confirm the randomness independently verified in 2010 no further review of the barrier draw is required at this time.

Racing Australia will continue to monitor the barrier draw.

March 2010

Independent Review of Barrier Draw Process used for all Thoroughbred Race Meetings across Australia completed (Excluding Western Australia Race Meetings)

Consistent with the policy of Racing Australia to continually review the integrity of its core business processes, in late 2009 Racing Australia engaged external parties to conduct an independent review of the software application (i.e. the Barrier Draw random number generator) used to assign barrier numbers for races in all States and Territories of Australia (excluding Western Australia).

The Barrier Draw software together with the associated business processes were reviewed through a set of specific procedures.

The independent review included mathematical analysis surrounding the randomness of the Barrier Draw results of over 180,000 race meets covering a ten year period.

Consideration of What Constitutes "Random"

"Random" is defined as follows:

"A random barrier draw is not one that generates perfectly uniform and equitable barrier draws (across horses, or across time) because with randomness comes unpredictability.  This means that unexpected results can, and will occur as frequently as the random process implies. In fact, the absence of these anomalies would actually suggest that the process is distinctly non-random."

 

Overall Finding as to the Randomness of the Draw

"Based on the examinations undertaken by the independent experts, including consulting actuaries, no statistical evidence was found to reject the hypothesis that barrier draws are random. It was concluded that the observable results are consistent with random barrier assignments".

 

In summary, the findings of the independent Review are as follows:

Draw Software Review

• The random number generator algorithm used was, and is effective for the purpose of generating barrier draws

Barrier Draw Historical Analysis

• Based upon analysis of the last ten years of actual barrier draws the test results did not indicate any evidence of non-randomness

Barrier Draw Stress Testing

• A simulation of 100,000 barrier draws, using the random number generator, found no evidence of non-randomness

Barrier Draw Horse Tests

• Testing of barrier draw results, comprising 119,923 horses, was performed to assess whether any individual horse was unduly advantaged or disadvantaged by the barrier draws over a ten year period. The testing found no evidence that the actual distribution deviated from the expected normal distribution.

About Racing Australia
Within the Thoroughbred racing industry Racing Australia provides a number of integrated products and services nationally to principal racing authorities, race clubs, owners, trainers, breeders, jockeys and punters. Racing Australia also fulfils an important role in managing the industry's racing materials on a national basis, bringing in outside revenue through the sale of a variety of products. Racing Australia's products and services include; Registrar of Racehorses – a division of Racing Australia, Racing Australia Stable Assist, Racing Australia Form, Racing Australia Materials, Racing Australia Publishing, Racing Australia Connect, Racing Australia Technology and the TTSC – a division of Racing Australia. About PKF Chartered Accountants & Business Advisers Are a leading group of specialist Chartered Accounting and business advisory firms offering a comprehensive suite of up-to-date specialist advice and services, including audit and assurance, corporate advisory, corporate recovery, enterprise advisers and tax consulting services. PKF provides clients with expert advice from experienced professionals drawing upon national resources and technical expertise. About Cumpston Sarjeant Consulting Actuaries Provide a wide-range of actuarial consulting services including detailed actuarial reports regarding non-life insurance arrangements that include claims modelling and estimation, parameter estimation by a variety of statistical methods, goodness of fit and hypothesis testing and probability of adequacy calculations for example.

About PKF Chartered Accountants & Business Advisers
Are a leading group of specialist Chartered Accounting and business advisory firms offering a comprehensive suite of up-to-date specialist advice and services, including audit and assurance, corporate advisory, corporate recovery, enterprise advisers and tax consulting services. PKF provides clients with expert advice from experienced professionals drawing upon national resources and technical expertise.

About Cumpston Sarjeant Consulting Actuaries
Provide a wide-range of actuarial consulting services including detailed actuarial reports regarding non-life insurance arrangements that include claims modelling and estimation, parameter estimation by a variety of statistical methods, goodness of fit and hypothesis testing and probability of adequacy calculations for example.

Copies of the full report
Copies of the detailed report containing the findings are available by contacting the Operations Chief Executive Officer of Racing Australia on +61 3 8354 2500 or info@racingaustralia.horse.