In response to The Daily Gazette’s Dec. 10 editorial, “State should help the OTB that needs it,” let me start by saying that no one wanted New York City Off-Track Betting to close. And if the state Senate could have agreed on Sen. Lanza’s bill, it may still be open.
The closure of New York City OTB was five years in the making. Five years ago, and every year since, all the OTBs visited with state officials to discuss the excessive payments from OTBs to tracks and the fact that without state action, the financial health of all six OTBs would deteriorate.
Further, the OTBs decried the unfettered access given to out-of-state and offshore Internet wagering sites into the New York market, allowing them to poach bettors away from OTBs and tracks. The total handle being wagered by New York residents with these out-of-state sites is estimated at $300 million to $500 million.
For years we have urged state officials, including those at the Racing and Wagering Board, to take action to shut off the spigot of these out-of-state entities, which is damaging New York’s racing infrastructure. Other states, like New Jersey, have been proactive to protect their market and their racing industry.
Moreover, the laws that require OTBs to pay tracks are 30 years old. When these laws were put on the books, it was never envisioned that tracks would be equipped with a money-making juggernaut like VLTs. These VLTs bring in hundreds of millions of dollars for track operators and horsemen. We support the tracks having VLTs; what we don’t support is having county taxpayers (through OTB) pay millions of dollars that are added to those VLT profits.
Antiquated racing laws
Here are the two most glaring examples of why the antiquated racing laws need to be revamped for all OTBs:
Saratoga Harness provides revenue of $300,000 for Capital OTB, while we must provide them with payments of $2.8 million. Vernon Downs provides $65,000 in revenue for Capital OTB, while we must provide them with payments of $665,000. So, revenue from these two tracks totals $365,000, while the payments to them totals $3.465 million — a net difference of $3.1 million. Both these tracks have successful VLT operations. These millions of dollars in excess payments are better directed to local governments for property tax relief than to racetracks, further enriching their wealthy owners.
We are not asking for help without making the tough decisions ourselves. Since 2004, Capital OTB has cut expenses nearly $4.5 million dollars, and has reduced staff by 45 percent, from 445 down to 245 this year.
The problem with the New York City OTB bailout bill is that it would have added new burdens and costs onto regional OTBs. Therefore, the best approach was to support the Lanza bill, which provided assistance to all six OTBs statewide, including New York City’s.
This is not a Republican/Democratic issue. Capital OTB received letters of support from Albany Mayor Gerald Jennings, Albany County Legislature Chairman Daniel McCoy and verbal support from Mayor Brian Stratton, as well as from the New York Association of Counties. They understood that including all OTBs would bring millions of dollars in additional revenues to local governments at a time when city and county budgets need every penny they can get.
Now is the time for leadership, not partisan politics. The state and OTBs can take three steps to help racing in New York State.
1) Lower the payments OTBs make to tracks;
2) Prohibit out-of-state Internet sites into the New York market; and
3) OTBs need to work more closely together to create efficiencies through shared services agreements.
It’s time for all parties to come back to the table, get New York City OTB reopened and make the racing industry stronger for years to come.
John Signor is president/CEO of Capital District Regional Off-Track Betting Corp.