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OTB still valuable enough to try to save

OTB still valuable enough to try to save

Off-Track Betting provides millions to local governments

If Off-Track Betting dies a natural death due to the concept becoming obsolete, then so be it.

We have many other options for our gambling dollar today than ever and more ways to spent that dollar, from expanded lotteries, to sports betting, to VLT parlors like Saratoga Gaming & Raceway, to betting on horses online or betting on them in person at a track.

Soon, the state will have three new casinos, and maybe four.

Nationwide betting on horse-racing, OTB's bread and butter, has declined steadily over the years, including a 7 percent drop in just one year from 2012 to 2013.

OTB was once the only way to get people to bet on horses who couldn't otherwise make it to the track in person. But with all those new options, it could be that having a specific location for people to go to bet on horse-racing is just no longer needed.

Why go out to a dingy, depressing old building to bet when you can sit in your living room or a bar stool and bet from your smart phone?

Evidence suggests OTB might be on its last breath. OTB handle between 2009 and 2013 declined 18.7 percent, according to a report from state Comptroller Thomas DiNapoli. OTB distributions to local government dropped from 17.6 million to $10.2 million during the same period.

The New York City OTB went out of business five years ago. The Suffolk OTB on Long Island filed for bankruptcy in 2012 and is still struggling to emerge from it.

Still, even with a significant decline in revenue over the past several years, OTB still provides local governments with a lot of money to help offset local property taxes. In 2013, the Capital District OTB distributed $2.1 million to local governments.

That's a far cry from the $3.6 million in 2009, but it's still a healthy chunk of revenue for local governments to have to give up. In addition, OTBs employ more than 1,200 people statewide, a $55.8 million economic impact.

Locally, OTB employs about 150 people in the Capital District OTB that includes Schenectady and Albany.

All that makes it worthy for state lawmakers and OTB itself to take whatever steps they can to rescue it. That means changing how OTBs are operated and more importantly how they are forced to distribute their revenue.

DiNapoli's office recommends lawmakers consider steps such as:

* Updating the antiquated regulations, statutory requirements and fee distribution requirements put in place when OTBs first established;

* Allowing OTBs to operate other gaming activities such as video gaming machines;

* Reviewing the requirement that OTBs pay harness tracks a "maintenance of effort" fee to help them operate, as the tracks' relationship with racinos has reduced the need for OTB revenue;

*Working out revenue-sharing where OTBs operate in the same service areas as New York Racing Association tracks;

* Reducing the amount of revenues OTBs are required to distribute to race tracks;

*And reducing the pari-mutuel tax for OTBs; and prohibiting out-of-state companies from partnering with New York state tracks to avoid paying out-of-state advance deposit wagering (ADWs).

In addition, OTB needs to become more efficient by reducing administrative and employee-related costs, cooperating with other OTBs, and investing some of its revenue into upgrading its facilities to attract more customers.

OTBs still might have role in the ever-expanding gambling industry, and could still be valuable revenue sources for helping offset local taxes.

But unless significant changes to reinvent the model are made right away, OTBs soon will be a victim of the present and a relic of the past.

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