OTB's Four-Legged Problem

The continued haggling in the State Legislature over how to produce the relief for the city's Off-Track Betting Corporation that will persuade Mayor Bloomberg not to shut it down on Sunday offers some clue as to why he set that deadline in the first place.

The Legislature is supposed to adjourn for the summer on June 23. The OTB situation has grown grave enough that at least 1,200 of its 1,500 employees last week received layoff notices, and the city has been running newspaper ads for firms interested in helping it liquidate the betting corporation's assets.

Yet no solution was in sight as this newspaper went to press June 9 - one ranking legislator said that the most-recent discussions have been of memoranda rather than actual bills. The Legislature is capable of jerking to life at any possible moment when matters get urgent enough, but Mr. Bloomberg rightfully concluded that it would be leaving too much to chance to set the deadline on closing day of business in Albany.

But as he, OTB officials, and the unions representing its workers wait for deliverance, his own hard-line posture that the relief must be permanent rather than a stop-gap has further complicated the discussions. Instead of the traditional "three men in a room" scenario in which the Governor, Senate Majority Leader and Assembly Speaker hash out a decision, "It's a four-legged problem because you have the Mayor involved," noted John Sabini, the ranking Democrat on the Senate Racing and Wagering Committee.

OTB officials five years ago made a bad calculation on how much additional revenue they would receive if they were permitted to take bets on thoroughbred racing at night. That led them to agree to changes in the formula for distributing OTB's revenues that gave more money to harness-track owners who stood to lose business, and in more than a few cases have since prospered with the installation of Video Lottery Terminals on their premises.

Mr. Bloomberg wants that formula revised, but the proposals that have been floated to do so could lead to reductions in purses for the tracks and higher deductions from the payoffs for winning bettors. Racing-industry interests have qualms about both those potential changes, and sources said last week that Senate Majority Leader Joe Bruno walked away from a possible agreement because of their objections.

This is a deal that ought to get done. No one imagines that the city will be better off without OTB, and the racing industry would surely be hurt financially if it folded up. There is some feeling that what amounts to tax relief for OTB will deal with only part of the problem: that it is top-heavy at the executive level and that it might make more sense for the state's six regional OTBs to be combined at a large administrative savings.

Whether that kind of streamlining can be dealt with over the next few days is questionable, though it should be examined seriously in the weeks and months to come. For now, it is essential that a compromise be struck to avoid a closing that doesn't make long-term economic sense and that would disrupt the lives and financial futures of 1,500 employees.