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Nassau OTB has suffered losses for several years. Its last two annual audits include notes questioning the corporation's ability to keep operating. Other regional OTBs are doing poorly too. Only Western, which owns the harness track Batavia Downs, with its video lottery terminals, is faring well, no thanks to horses.
Yet no matter how much money they lose, the OTBs still find high-paying jobs for political players. Democrat Phil Nolan lost his re-election bid for Islip supervisor in November. The OTBs are headed for trouble, yet there's still money to be made from betting on horses. There's just no reason to believe the OTBs are the ones to do it right. With a constitutional amendment to expand gambling being considered and a governor who wants to professionalize gambling in New York, the time for a fresh look at the OTBs is here.
Multiple privately owned racinos are already operating, and as many as seven full-blown casinos have been proposed; the idea that the private sector should run gambling in this state, and pay fair taxes from the proceeds, is clearly ripe.
Why not apply it to OTB, and award the franchise to the highest bidder? This would give state and local governments one last shot of revenue from the sale. It would also allow a private operator to focus on the aspects of gambling on horses that work, like betting machines in bars, and Internet wagering. Horse racing no longer has great odds for the OTBs. But that doesn't mean a private company couldn't turn it into a winning wager.
Updated May 25, PM. Their various questionable practices - such as using leg breakers as collection agents and charging usurious interest rates - eventually led to reforms that prohibited wagering away from the track. By the s, the only wagering permitted under state law was so-called pari-mutuel betting, in which the money was pooled and winnings distributed out of the pot. A legally mandated percentage of the betting pool was retained by the race operator to pay costs and taxes and make a profit.
But the demand for expanding social services had been straining New York City's budget through the turbulent s. In , under Mayor Robert Wagner, voters had approved a measure to raise revenue through off-track betting. It was left to Gov. Nelson Rockefeller to push through a change in the betting laws that allowed counties and large municipalities to conduct off-track betting as a means of generating revenues without raising taxes.
Subsequently, Mayor John Lindsay tapped Rochester businessman Howard Samuels to head up the city's betting operation - OTB, as the public-benefit corporation became known. In , only Aqueduct Race Track, which had opened in Queens in , still conducted Thoroughbred racing within the city limits, operated by the nonprofit New York Racing Association, which also ran Belmont Park in Nassau County and the track in upstate Saratoga. NYRA officials bitterly opposed any off-track betting scheme and refused to cooperate with the fledgling corporation.
Management at these tracks agreed, reluctantly, to let OTB handle bets on their races. Insiders touted OTB as a longshot to finish in the money. The pressure on Samuels to prove his corporation could be a money earner was intense. With no extensive branch-office network in place in the five boroughs, with no computerized system set up to handle bets, Samuels guided his corporation out of the gate.
At A. Under Samuels, OTB continued to amaze. Samuels left OTB in to run for governor, and the corporation over the years fell into less professional hands. More recent belt-tightening has resulted in some upturn of OTB fortunes.
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