12/21/2001 12:00AM

Gotham budget: no OTB sale

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NEW YORK - A $250 million revenue projection from the sale of New York City Off-Track Betting was removed from the city budget just before it was passed late Wednesday, city officials said Friday.

The projection was removed at the request of Mayor Rudolph Giuliani, who approved the sale earlier this year to fulfill a promise he made in 1992 to privatize the company.

Giuliani asked that the projection be removed as the final budget was being prepared because "he said he did not believe that the sale of OTB could be done in fiscal year 2002," according to Jake Lynn, a spokesman for city council speaker Peter Vallone, on Friday.

Although the removal does not kill the sale, it does indicate that the momentum behind it is running out of steam. Earlier this week, representatives of the state legislature, which would ultimately have to approve the deal, said that they would not consider the sale unless incoming Mayor Michael Bloomberg, who takes office in January, endorsed it.

In August, Giuliani tabbed a partnership headed by Magna Entertainment as the winning bidder for OTB. The selection was immediately criticized by the New York Racing Association, which also bid for OTB.

On Friday, NYRA chairman Barry Schwartz said that the exclusion of the revenue from the budget indicated that the sale to Magna would not take place.

"This is strictly going to be a Bloomberg decision," Schwartz said. "It's his call now whether to sell it. What happened before is totally irrelevant."