R.I.P. O.T.B.? Board Votes to Close

The board of Off-Track Betting voted today, at the request of Michael Bloomberg, to shut itself down instead of looking for a bailout from the city.

Michael Bloomberg said that the city will not use taxpayer money to keep Off-Track Betting afloat. Critics, including Bloomberg, charge that the city pays for O.T.B., but the state receives more revenue. In effect, closing O.T.B. puts pressure on Eliot Spitzer to step foward with the money.

In a letter today from Pat Foye–the downstate chairman of the Empire State Development Corporation–to Deputy Mayor for Economic Development Rob Lieber and OT.B. head David Cornstein, Foye says that in 2007 the city received more money than the state from O.T.B. than the state, and also claims O.T.B. will be turning a profit "soon." He emphasized the need for new "racing and wagering" legislation and said it would take "only $1.1 million to ensure NYCOTB endures until legislation can be passed."

Foye also says, as part of his argument, that O.T.B. isn’t well-suited for the new generation of tech-savvy gamblers:

“While racing has experienced major changes in customer preferences, the OTBs are also operating in a world not contemplated at their creation in 1971. Nearly 25% of NYCOTB handle is processed through call centers and on the Internet. While NYCOTB Internet wagering is small at present, it is growing quickly and eventually may supplant much of the wagering currently done at OTB’s 73 outlets. The shift from bricks-and-mortar towards the phone and Internet make the balkanization of New York State’s OTBs-as well as the separation of racing content from distribution through OTBs – an ill-suited business model for the 21st century.”

UPDATE: A Bloomberg spokesman just sent out a release that includes a quote from his remarks to the O.T.B. board:

“If we did nothing, by the end of June, OTB would be running a cash-negative operation for the first time in its history. I believe that if OTB is unable to operate without taxpayer subsidies, then it should not operate – period,” said Mayor Bloomberg. “The City simply cannot take dollars away from schools and hospitals to pay for a gambling operation. We have no business subsidizing betting parlors at the expense of City taxpayers, particularly at a time when we’re asking all agencies to cut their budgets. OTB has made every effort to remain profitable.” R.I.P. O.T.B.? Board Votes to Close