Senate’s mis-management could mean the end of OTBs in New York
Off Track Betting (OTB) has long been prevalent in the horse racing industry. It was put in place to eradicate the black market, which was sucking up all the revenue that could go to the industry as well as the government. Therefore, the state decided to
introduce the OTB system which legitimised off track betting. However, the city OTBs were required to give a share of their profits to the government, as well as the horse racing industry.
In recent years the OTBs have been experiencing serious financial problems, but only half hearted steps have been taken by the government to resolve the issue. Moreover the OTBs claim that the main cause of their downfall is the fact that so much of their
revenue is asked to go by law to the state and the racing industry, which leaves almost nothing for investment purposes.
New York Mayor Michael Bloomberg confesses that the city OTBs are the victims in the whole scenario, “OTB did make money but they (the state) demanded 120 percent of it go to support the racing industry…because it isn't that OTB didn't have more revenue
than expenses, it is that the state, by law, took … 120 percent of the profits."
In this sad state of affairs, the economy of the state will suffer greatly, so much so that the future of the horse racing industry could be jeopardized. More than one thousand workers have already lost their jobs, and severe consequences will follow if
the senate does not come up with a plan to rescue the city OTBs.
Larry Schwartz, the chairman of the OTB expresses his concerns quite explicitly, “This is going to have a tremendous impact on the racing industry. I believe upstate tracks will close. Horse farms will shut down, breeders will be moving out of state. Many
small businesses that support racing will have to lay off people or shut down their operations. With a nine percent unemployment rate in the state of New York, the Senate had a chance not to add to those figures by passing a restructuring plan that the Assembly
approved."
Unfortunately however, the government has not been able to fulfill its obligations. There is significant conflict between the Democrats and the Republicans concerning the bill that was drafted by Governor David Paterson. The point of dissent among the two
parties was that according to the bill, only the city OTBs were to be given some special facilitations, which the Republicans think should be extended to all the state OTBs.
The argument of the Democrats claims that the city OTBs were more endangered as they were on the brink of bankruptcy, which gave them the right to be helped first. Also the city OTBs had made the required concessions asked by the state, something that the
regional OTBs had failed to do.
However, the Republicans are adamant that the fault lies with the Democrats for not having enough votes on hand before bringing the bill to the floor, and not accepting the compromise bill that was offered to them.
According to Republican spokesman Scot Reif, the attitude of the Democrats was not at all flexible, which hindered the negotiation process. Many of the Democrats were not present for voting in the follow-up session called last week. Senate President Malcolm
Smith, Senator Kevin Parker, Senator Ruben Diaz and Senator Pedro Espada are some of the names among the absentees.
The New York State senate could still become the hero and save the day if it takes the appropriate steps, and takes them now. However, there is no confirmation that negotiations have re-started between the two parties.
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