Mayor Sounds Bugle on OTB

The vote by the board of the Off-Track Betting Corp. to cease operations in June should be viewed for what it is: a gambit to prod Albany for financial help, not a genuine threat to the jobs of its 1,500 employees.

For all of Mayor Bloomberg's insistence that he was serious about a shutdown, he basically admitted the step was tactical rather than substantive when he told reporters, "The only way you can get Albany to function is to create a crisis."

It is estimated that by June OTB will be operating at a deficit, and the Mayor made clear he will not dip into the city treasury to subsidize its operations. But in suggesting that the public betting corporation is the victim of legislative mendacity and a rapacious racing industry, Mr. Bloomberg left out one important culprit: OTB itself.

It is losing money because several years ago, expecting that its profits would soar if it could take wagers on thoroughbred racing at night, OTB agreed to a bill that gave a greater share of its betting handle to state harness tracks that figured to be harmed by the added competition. The hoped-for windfall did not materialize. Rather than acknowledge a major miscalculation by OTB officials, the Mayor has acted like a disgruntled bettor who is crying "fix" because his horse didn't run as fast as expected.

It is likely that state officials will re-examine the funding formula and/or explore whether the six OTBs statewide should be consolidated into a single operation, saving on duplicative administration that includes a half-dozen phone-betting operations. What is most unlikely is that they would simply allow the city's horse-betting enterprise to fold, since the loss of revenue could drastically affect the entire state racing industry.

New York City OTB from its outset 37 years ago was a patronage-heavy operation, and there are still vestiges of that in its leadership today. Its attraction early on was the convenience that it afforded those who wanted to bet the horses legally without having to go to the track to do so. That convenience became the rationale for imposing a surcharge on winning bets more than a quarter-century ago in order to pad revenues.

Upgrades in technology have taken away much of that rationale. People can now make bets legally by phone and watch the races on their TVs or computers rather than having to go to an OTB parlor. And bigger bettors are not going to be patronizing OTB and facing additional taxation under the surcharge on winning wagers when the tracks and other outlets are offering them rebates based on the amount that they gamble.

Reducing OTB's administrative costs and other management improvements coupled with legislative relief might allow it to be competitive in the current racing environment. That could wind up meaning a loss of some jobs, and OTB employees also face uncertainty about pension and health-care coverage if there is a consolidation of operations, particularly if all the OTBs are placed under the control of private entrepreneurs.

With luck, those matters will be resolved by the end of March, when the state is required to have a new budget in place. Employees are right to worry about how the changes might affect them, but there is little reason to fear major job losses.