Bad Bet

Horseplayers who bet the ranch—or the condo—on Big Brown in last Saturday’s Belmont Stakes may not be the only losers in New York. The city is on the verge of shutting down the Off-Track Betting Corp. because of a disagreement between City Hall and Albany over distribution of revenues to the state and to the racing industry.

Mayor Bloomberg has made it clear that he’s not bluffing in this latest crisis over the future of OTB. Most of the 1,500 people who work for the agency have received notices that their services may no longer be required after Sunday. More than 60 OTB parlors around the city will shut their doors.

Albany ought to come to its senses and make a deal with the mayor that satisfies his concerns about the agency’s revenue stream. The city, state and the racing industry need the revenue OTB brings in. What’s more, organized crime would be more than happy to take on new clients if the parlors are no longer open for business.

Like it or not, state-organized gambling is a fact of modern life. New York actually was in the forefront of taking gambling away from the guys and dolls of the Biltmore Garage when it instituted a state lottery in 1966 and when it allowed the city to set up OTB in 1970.

That’s not to say OTB has always been the most well-run, efficient organization. As a mayoral candidate in 1993, Rudolph Giuliani famously observed that OTB was the only bookie in the city that lost money. Mr. Giuliani may have been exaggerating the extent of OTB’s problems, but there was no question that the agency was rife with inefficiencies and was saddled with political patronage hires among top-level administrators. And the parlors certainly need to be cleaned up and turned into appealing venues, scoured of the dingy image.

OTB makes about $125 million a year from about $1 billion in bets placed in its parlors or though telephone accounts. But the take by the state and the racing industry is so large that the city can no longer afford to keep OTB in business, according to Mr. Bloomberg.

While the glory days of off-track betting probably are behind us—at one point in the 1980s, there were more than 150 betting parlors around the city—there still is a market for this service. Getting to New York’s tracks—Aqueduct, Belmont and Saratoga—isn’t easy, but OTB has allowed hundreds of thousands of horseplayers to indulge their habit without the hassle of getting to the rail. Plus, of course, at OTB they can bet on races from out of town as well.

Does anyone believe that these bettors would shrug their shoulders and give up their hobby if OTB closes? Without a local parlor, the bettors would turn to organized crime, as they did before the birth of OTB. The city, state and racing industry would lose this important source of revenue.

It makes no sense to shut down OTB. Governor Paterson should make sure it doesn’t happen. Bad Bet