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Wednesday, April 14, 2010

Albany Lurches Toward OTB Rescue

Tom Precious reports on on the situation in Albany as lawmakers attempt to devise a rescue, bailout, temporary fix, or whatever you want to call it, to keep NYC OTB going....for now, anyway.

Either way, the final agreement will not resolve the OTB’s longstanding problems—or those facing other OTBs or the larger questions of destructive competition between OTBs and tracks. Instead, it will merely punt those long-term issues until a year from now and after a new governor takes office in January. []
Hmmm, a new governor, eh? Can't imagine that the governor's mansion is going to be nearly as entertaining once Governor Paterson is gone. Well, unless this guy gets elected. Or...this one. (Sad commentary on the state of NY politics that Republicans actually have to recruit clowns like these from the Democrats.) Of course, barring some unforeseen event or prostitution scandal, the next governor is nearly certain to be Attorney General Andrew Cuomo....and who the hell knows what he thinks about racing and OTB's and casino gambling? In fact, who knows what the hell he thinks about anything? I'm sure he'll let us know once he's good and ready.

Precious reports that the situation is extremely fluid; seems it changed about a half dozen times even as he was writing his article.
In the past 48 hours, the terms of the deal has moved from cutting NYCOTB’s statutory payments to the industry from 15% to 48% and now back to 15%. Officials warned that number could change again in the coming hours.
The tracks and horsemen are naturally trying to resist any haircut. Seems absolutely incredible that OTB has successfully resisted the idea of a significant thinning of its bloated management ranks.

However, word is that NYRA would be compensated and sustained by a $17 million loan against the eventual slots money it will earn from the mythical racino at Aqueduct.
The $17 million is coming from $250 million the state would raise by issuing bonds for the Aqueduct project. The $250 million has been promised to the operator of the racino and is supposed to be used to build the VLT facility. [Capitol Confidential]
Well, duh! What took them so long? The state is obligated by the franchise agreement to keep NYRA afloat given its failure to name the racino operator. This would have been done long ago if not for the misdirected enmity towards NYRA, and the self-serving bashing that we've seen from politicians either too ignorant or stubborn to acknowledge the real reasons for its plight. (And yeah, the threat to shut down before the Belmont likely didn't help either.) I've maintained all along, with only occasional doubt and wavering, that Albany would not allow NYRA to fail, and a loan of this type is logical and inevitable in my view. A no-brainer, really, even for politicians without them.


jk said...

It is sad with a 26% takeout on exotic bets and a 5% OTB surcharge on winning bets there is not enough money to go around. One of the articles I read mentioned an additional 1% surcharge for winning bets is on the table. I hope not. It looks like they will take a little out of everyone's hide and punt on real reform.

El Angelo said...

At what point do the surcharges actually start driving people away from using OTB? Personally, they don't effect me because I bet online, and unless they've changed something, there's no surcharge if you do that. But if you're looking at losing 6% of your bet for the sake of so-called convenience (it's not like the environs at an OTB are nice), I would think you'd take your business elsewhere.

Anonymous said...

The OTB surcharge is already 6%, at least on exotics (Catskill OTB)

Steve Zorn said...

DRF, etc. are reporting that the deal just collapsed and the Legislature is going home until next week. You seem to have been too optimistic about the likelihood of a no-brainer solution being adopted by guys with no brains.

Anonymous said...

This will be tough short term but might be the impetus to get something really constructive done long term.

State still has to cover NYRA's shortfall, I believe, and since they went along with this OTB deal and have nothing to do with the collapse, they should be ok.

As usual, the unions killed this deal, big surprise there.

jk said...

Shut the parasite down, give the phone and internet accounts to NYRA, clone the Mohegan Sun Racebook and put it in Manhattan.

jk said...

One more comment for Alan; I attended the Devils/Flyers game tonight. I am sure the result has warmed the hearts of all Rangers fans.

steve in nc said...

Angelo - check out a NYRA account. You get some cash back if you bet $2000/month or more, with no surcharges regardless of how little you bet. Instant free transfers to or from your bank acct. No, I have no connection to the place, other than the residue probably still in my lungs from the abundant second-hand smoke of years past.

SaratogaSpa said...

wanna bet a "last minute" deal is made Sunday night/Monday Morning to stave off the OTB shutdown? My $2 bucks is in.

Anonymous said...

Alan, thanks for the NYRA update and your fact-based reporting of the state's obligation to NYRA. As pointed out by several commenters already, it is the combination of high taxes, surcharges, regulatory burden, and, of course, the unions that make holding this deal together a supreme balancing act.

The same conditionsthat have driven private enterprise out of NY State for the past, oh, 40 years. This is what happens when government runs the show. Just a bunch of whores selling out to the highest bidder, the devil (the people) take the hindmost. Almost makes you want to join the Tea Party, doesn't it, Alan?! /S/greenmtnpunter

El Angelo said...

I would rather move to Uruguay than be affiliated with anything that glorifies Sarah Palin.