1990 Law Permits NYRA Teletheaters

Reader ljk wrote of an "obscure" 1990 law by which NYRA is authorized to run NYC teletheaters in the absence of NYCOTB.

The text of the relevant part of the law is here. It's a tough read, full of sections, subsections, notwithstandings, and pursuant to's. But it's not really all that obscure. In fact, as Steven Crist explained in the New York Times on July 3, 1990, it was actually the legislation which first permitted the N.Y.R.A.....to simulcast its races to other outlets, both in-state (between Belmont and Aqueduct as envisioned at the time), and out-of-state at a time when betting pools were first starting to be co-mingled.

The law also permitted Yonkers to simulcast N.Y.R.A. (as the now period-less association was then referred to) races which, according to a piece in the Times on Aug, 4, 1991, kept the track alive.....providing a daily average handle of $330,000. (I know it's hard to compare dollar figures from 20 years ago to today, but that figure alone is nearly enough to compensate for the typical daily loss in intrastate off track handle since NYC OTB's demise in our simplified exercise the other day.)

And indeed, as ljk pointed out, the law permits N.Y.R.A. to get into the simulcast theater business...and, apparently, not only in the absence of OTB. As Crist reported at the time:

The N.Y.R.A. will also be allowed to build a teletheater in the New York City area, though not for at least 18 months and then only with the approval of local officials. Hazel Dukes, who became president of New York City OTB last Friday, said yesterday that she opposed a N.Y.R.A. teletheater and hoped to improve OTB enough in the next 18 months to make one unnecessary.

This prompted NYRA's then-president Gerald McKeon to remark: "For the first time since OTB, the shackles are starting to come off us." And just one year later, there was an effort to put that aspect of the law into effect; not in the city, but in Westchester County, where, as reported in the 1991 Times article, county officials are negotiating a contract with the New York Racing Association to build a $10 million teletheater in the central part of the county.

After review by a special bipartisan legislative committee set up to consider revenue sources for the county and changes in state law governing off-track betting in Westchester, a decision was made to negotiate with the New York State Racing Association rather than to join the regional Offtrack Betting Corporation.

The teletheater would be the first off-track betting system in the state controlled by the association under contract with a county, and not by a group of cities and counties that have chosen to join one of the state's six regional OTB corporations.
......
Although New York was the first state to permit off-track betting, it did so over the objections of track owners, and it is now the only state in which the off-track betting system is not supervised by the race track owners.

If Westchester reaches an agreement with the New York Racing Association, it would break the monopoly that municipalities have held over off-track receipts, said John M. Dailey, director of racing and OTB for the New York State Racing and Wagering Board.

"The tracks will muscle in and take over," he said. "They want to market their own product." [NYT, Aug 4, 1991]

Of course, 20 years later, the status quo remains, and the shackles that McKeon spoke of are just now being shed, and only due to NYC OTB's closure. Why the Westchester effort (bitterly opposed by Yonkers) failed, and why this particular provision of the law faded into obscurity, is to be further researched and reported on. But it seems as if there is no legal obstacle to NYRA establishing its own off-track facilities that would permanently relegate NYC OTB to the dustbin of failed business models and bad ideas.

- Crist's article is surely worth a read in its entirety, as it shows how drastically things have changed - "Ontrack bettors in New York now will be allowed to bet on 12 rather than 3 out-of-state races a year" - and how they've stubbornly remained the same:

"The bill is 60 percent good and 40 percent not so good," McKeon said. "That 40 percent, unfortunately, includes things the fans are most concerned about, takeout and withholding."

Every study of the parimutuel takeout shows that handle rises and longterm revenue increases when the take is lowered, but legislators refuse to accept short-term losses. So horseplayers will continue to fight a 17 to 25 percent takeout, as opposed to 5 percent from their friendly neighborhood sports bookmaker or the Atlantic City roulette wheels.

And the beat goes on..