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Monday, June 16, 2008

Paterson Blasts Bloomberg......Maybe

- In the wake of the finalization of the deal by which the state will take over New York City OTB and keep it running, Governor Paterson absolutely blasts Mayor Bloomberg in a Fredric U. Dicker exclusive (which he now denies). In one fell swoop (and according to Dicker, who I have not recently noticed being forced to retract a story), Paterson not only portrayed the Mayor in some of the most unflattering terms possible, but he also issued what I believe would be his first public rebuke of his disgraced predecessor.

"Eliot Spitzer's tantrums were bizarre because you never knew when they were coming or why, whether it was contrived or whether he was a psycho," the governor said.

"With Bloomberg, you know why he's upset, but he has the same kind of anger that reminds you of Spitzer." [NY Post]
Dicker reports that Paterson, "furious" over the 1500 jobs that Bloomberg seemed so flippant about eliminating, referred to the Mayor as a nasty, untrustworthy, tantrum-prone liar who "has little use" for average New Yorkers.
The source quoted Paterson as saying of Bloomberg, "There's some kind of destabilization over there."

"His presidential thing didn't work out, term limits is looming to force him out, he's waiting and waiting to be asked to be vice president, congestion pricing didn't happen, he lost teacher tenure, the Jets stadium, and OTB isn't going the way he wants it."
If you don't mind me saying so, the theme of the Mayor's legislative defeats in Albany increasing his frustration level is something that I've mentioned on at least a couple of occasions here. Paterson accused Bloomberg of lying when he said that he was taken by surprise by the press conference announcing an agreement on Friday; and added that "it wasn't the first time he'd misrepresented the facts."
Paterson also told friends he was surprised at Bloomberg's seeming lack of political sense in the OTB battle.

"The mayor totally misplayed this," he said.
That's the impression that I've had, and I'd be interested to see just how the city will fare financially. It's been reported that Bloomberg was ignoring some $18 million worth of surcharges in claiming that OTB was a financial drain. Under this deal, it will receive only about $4.25 million (representing surcharges from bets actually made in the city), plus another $3.25 million for broadcast rights on local channel 71 (which I'd been previously told was being provided for free). What financial relief the city will receive from no longer running the operation is not clear to me.

Of course, the fact that the state will be running OTB rather than the city certainly doesn't guarantee that it will be run any more efficiently, or become any less of a patronage pool for politicians. However, we are hearing the kind of language that we could only previously dream of. According to several published reports in what I find to be a stunning development, Paterson is looking at eventually consolidating all of the other six OTBs as well.
"The governor has indicated he wants to take a holistic look at racing just as he has with property taxes and mass transit," said Sen. John Sabini, D-Queens, Paterson's nominee to take over the state Racing & Wagering Board. [Albany Times Union]
Already, the head of one of the regional OTB's is pushing back against the idea of its being folded into the state. But John Signor, who runs Capitol OTB, still mentioned common sense concepts that have not heretofore been part of the discussion.
"There should be a statewide Internet site for all the OTBs and NYRA and one centralized phone betting center that all the OTBs can share and a coordinated marketing campaign with OTBs and tracks," he said.
- The Times Union's Capitol Confidential reports that Capital Play may have the inside track on the Aqueduct racino. It also reports that the idea of moving NYCOTB's offices to Aqueduct is actually that of Capital Play; but that it has appealed to Paterson, as well as to Bruno and Silver.

18 Comments:

jk said...

I will deny Patterson the high gound on this until I hear more about the takeout increase.

If they increase the takeout, Patterson is not doing racing fans any favors.

alan said...

jk - I know you ripped me previously for saying this....but it still seems to me that, ultimately, a "temporary" (if it really turns out to be so) one percent increase in the takeout would be a relatively small price to pay in order to get this mess straightened out once and for all. I think we'd all benefit from an industry in the state which is united in terms of marketing and efficiencies, and which could stand on its own once the slots bubble bursts. Might be easy for me to say because, at the levels I bet, 1% ain't going to amount to much over that time. But I'd be interested in hearing why you think I'm so far off base on this.

jk said...

It does not make sense to me that the takeout has to be raised. The consolodation story sounds good. Move to lower cost office space. Book all of the on-line bets thru NYRA. These two moves alone will increase cashflow to OTB and NYRA. Why then do they have to suck more blood from the race fans on top of the cost cutting? I thought research shows lower takeout leads to higher betting volume.

No one has really made the case on how raising the takeout is needed to fix OTB. It is a typical Albany move to cover their asses with the unions and political appointees. They claim the increase is only needed for 2 years. Why? What happens after 2 years to make the increase go away? It is the usual Albany fuzzy math.

I don't know if you saw it but Patterson ripped Silver last week over the debate on property tax caps. The man is on a roll.

One more thing, I was not "ripping" you, I was ripping the hacks who decided to raise the takeout. I will save my rips to you for your handicapping selections!

alan said...

> I will save my rips to you for your handicapping selections!

Plenty of opportunity for that..

Anonymous said...

Alan,

That 1 percent increase is actually a 4% to 8% increase to the better.

Am I wrong.

El Angelo said...

Who owns the location of the 60 OTB parlors? City, State, OTB, or are they rentals?

alan said...

>>Who owns the location of the 60 OTB parlors?

Er.....NYRA? :-/

>>That 1 percent increase is actually a 4% to 8% increase to the better.

Please elaborate.

late scratch said...

Takeout, shmakeout. NY has been offering the lowest takeout by far in the country on all but superfecta, pick 3 and pick 4 wagers. Most of the daily handle comes from WPS and exacta betting which are 14% and 17.5% respectively. Raising them by 1% still keeps NYRA tied for or at the lowest rate for these bets.

Plus, the research has been spotty as to whether increasing takeout actually reduces handle. Intuitively one would think so but in practice if the additional revenue is used for marketing and purse improvements resulting in better racing and larger, more competitive fields, then its impact is negated.

El Angelo said...

My guess on the 4%/8% thing is that the commenter meant that going from 14% to 15% isn't really a "1% increase", but actually a 7% increase, mathematically speaking.

El Angelo said...

Late scratch: you forgot the Pick Six and Trifecta, both of which go for 25% as well (except the P6 on non-carryover days). And while the one horse and two horse bets do get a lot of action, the whales and those looking for a big score all go for the bets that have a 25% takeout, which is beyond onerous.

Here's my question: everyone says lowering takeout increases the handle. That's fine, but I don't recall anyone saying that it increases handle enough to offset or mitigate the loss in revenue the track gets from the lower takeout. Is this the case? I'm pretty sure it wasn't the case at Laurel and Ellis Park the last couple of years with their experiments.

Anonymous said...

An increase from 15% to 16% is a 7% increase.

Anyone who is happy with the takeout(latescratch)I feel for you,you'll never get it.

You get the takeout down to 8-12% and horse racing will compete with Poker.

SaratogaSpa said...

Did you notice the Union representing the workers sat silent on the sideline through all this? Did they not know this was just a dog and pony show by Bloomberg and the Parlors would not really be closed down on Sunday? Lest us not forget we are talking about something that generates money (gambling) and jobs (appointed by politicians). This is about money and political patronage.

jk said...

Here is some simple math:

In 2007 NYRA's all source handle was $2.545 billion.

An additional 1% takeout on this number is an additional $25 million out of the betting public's pocket.

What will this $25 million per year used for in the next 2 years?

What is the benefit to race fans?

http://tinyurl.com/44vd3l

late scratch said...

JLK said: "What will this $25 million per year used for in the next 2 years? What is the benefit to race fans?"

This is part of the myopic thinking that has got us to where we are today. Hey, I'm a race fan, too, but I'm also an owner, and without all the systems components getting at least part of what they need, there just won't be any worthwhile racing someday. And maybe that's not a bad thing. There's way too much greed, selfishness and deception in this game for its own good. But, in the meantime, please do not equate a day at the races to playing poker. If it's minimal takeout you want, stick to the slots.

And if the present takeout is so onerous, how are the OTB's doing so much handle with the surcharge they impose?

Anonymous said...

Late scratch said...

"There's way too much greed, selfishness and deception in this game for its own good."

You must be talking about the Owners, as a fan It's very hard to feel greedy and selfish when Nyra is taking up to 25% of your money.


Let me ask you this,what kind of benefit is the Horseracing fan gonna get when NY starts taking in slot money.

Lower takeout? F**k NO!,Nothing! Zero!

late scratch said...

To anon -

The only metaphor I can think of is how we take for granted that every time we flip a light switch, that electricity will magically be delivered to our homes to light our way. Similarly, there is a lot of backdrop effort and expense that go into providing the race fan the opportunity to wager at their favorite venue. The horses entered to race don't just magically appear on the track for our wagering enjoyment. There is so much that goes on prior to that point that most race fans don't see, know or unfortunately, even care about.

So, once again, if you don't like the odds, maybe you should try another game. Nobody is TAKING 25% of your money unless you're addicted or they have a gun to your head.

Anonymous said...

Your right Late Scratch,

Raise the takeout to 30%,these Suckers(Horseplayers)will pay It.

El Angelo said...

Late Scratch:

You're right that there has to be *some* takeout of substance, because the game doesn't pay for itself. But this is the conundrum racing is in, because unlike 1930, or even 1970, there are literally hundreds of other legal, quasi-legal and illegal gambling options out there for people (especially those my age), which are easier to understand and less difficult to beat in terms of the house advantage.

And I disagree that fans don't care about issues like paying for backstretch workers, maintenance, or keeping purses high---most people who go to the races are well aware of these issues and care, in my opinion. It's just hard not to feel that the bettors are subsidizing more than their fair share of this through the takeout.