Detective Chan investigates a death in a horse stable and catches the crooked gamblers along with the murderer.
In Melbourne the horse Avalanche would have won except for a foul caused by the jockey Tip Collins (Frankie Darro), who was paid off by Bagley (Gavin Muir). Major Kent (George Irving) cables his friend Charlie Chan (Warner Oland) to investigate on the ship stopping at Honolulu. After Kent is killed in Avalanche's stall, Chan questions stable-boy Streamline (John Henry Allen), and blood-stains show the deception. A monkey upsets Avalanche, and Chan finds a weapon like a horse-shoe. Avalanche's owner George Chester (Alan Dinehart) gets a letter threatening to kill Avalanche if he races him. Warren Fenton (Jonathan Hale) offers him $20,000 for Avalanche. Charlie's son Lee Chan (Keye Luke) signs on as cabin boy and looks for the typewriter; Fenton catches him typing in his cabin. Charlie has Lee secretly deliver more threatening notes to Fenton, Denny Barton (G. P. Huntley), George, and Charlie. A fire in the horse stables is put out quickly, and George tells Bagley to stay there with a gun. George accidentally shoots Charlie in the leg. Charlie figures out the timing from the burnt match-book. Barton returns the note, and Charlie lets the steward put Lee in the brig.
At Los Angeles George says Avalanche will run, and Fenton enters Gallant Lad. A monkey disturbs Gallant Lad but not Avalanche, and Charlie suspects the horses were switched. Tip asks Bagley why he did it and gets $100. Gamblers plan to bet on Gallant Lad, who is 20-1. Charlie learns about cameras at the track and proves that the horse was drugged to run like Avalanche in training. A man tries to kill Charlie, but he is warned by a window device. One of the gamblers replaces a camera with a dart gun. Charlie and Lee are abducted but escape. No jockey will ride Avalanche, but Eddie Brill (Frank Coghlan Jr.) volunteers. Lee uses firecrackers to create a distraction so that Charlie can sneak in and switch back the horses, erasing the dye on their foreheads. Bagley calls to warn the gamblers, and they are arrested. In the race a dart hits Avalanche, but he wins anyway. Police question the gamblers, and George tells Fenton of the switch. Charlie shows a photo of the dart, and the dart is found in Fenton's pocket; but George mentions the weapon that murdered Kent, and Charlie shows the blood in George's pocket before he put the dart in Fenton's pocket. George murdered Kent to keep him quiet, and Fenton tried to cash in on the deal.
The aphoristic Charlie and his enthusiastic son Lee raise the level of this mystery with clever detective work. One also learns how horse races are photographed by timing devices.