05/18/2006 11:00PM

New York report leaves logic in dust


NEW YORK - The New York State Senate Standing Committee on Racing and Wagering publishes an annual report on the local racing industry that in the past has been a studious and useful review of the past year's legislative developments. This year, however, in its report issued Thursday, the powerful group took a sharp and unfortunate turn toward advocacy rather than review.

The report includes what it calls a "Top Ten List" of problems and proposed solutions. Unfortunately, many of the recommendations stem from flawed information and reasoning, and represent the interests of a single agenda and constituency: raising more money for government and its offtrack betting corporations, and preserving a system that every other independent public-policy study has said should be dismantled and that every other racing jurisdiction has avoided adopting.

The committee's most alarming recommendation for horseplayers is another increase in the parimutuel takeout, as the report repeats the frequent but false claim that the current takeout in New York is low compared with comparable jurisdictions. In fact, it's already effectively higher.

In Kentucky, for example, takeout is 16 percent on one-horse bets and 19 percent on all multiples and exotics. In California it's 15.43 straight and 20.68 on all others. New York's three-tiered system of 15 for straight, 20 for multiple, and 25 percent for exotic blends out to a higher overall rate because of the top tier, which is the fastest-growing segment of the handle. The report conveniently makes no comparisons with other states while repeatedly asserting that New York's rate is too low because government and the OTB's are making less money than they were 15 years ago (when the rates were lower).

If the committee wants to give those interests more takeout money, what do they propose for the tracks and customers who oppose the increases? Not much, except for the peculiar suggestion that "To increase attendance, racetrack operators, particularly Thoroughbred racetracks, should consider establishing nighttime or weekend racing events. Such events should have higher attendance levels. . . . Why should New York racing, particularly Thoroughbred racing, be the only sport except for baseball to conduct their events during the day?"

Putting aside that there already is racing every weekend, and that plenty of other sports (football, anyone?) are often played during the day, the committee might have made a phone call or two and found that daytime racing draws far more business than night cards, which may explain why every major track in the country races during the day.

The report is marred by similarly amateurish inquiries and assertions. An otherwise sensible recommendation to permit account wagering over the Internet as well as current telephone service says that savings on live operators will "allow racetrack facilities and OTB's to earn greater profits and to pay more money to winning bettors." How can payouts to bettors possibly rise if takeout is being increased?

The most depressing portion of the report is an unsolicited and unsupported opinion, one at odds with the recommendations of every reputable group that has studied the sad modern condition of the game in New York:

"Certain elements of the State's racing industry have advocated that the operator of the State Thoroughbred racing franchise should take over and merge their operations with the six regional OTB's. This would be a serious mistake for two reasons. First, OTBs' profits would then be shifted completely to support racing operations, instead of supporting local governments. Second, if OTB's were controlled by the franchise manager, that would add new stress to OTB relations with the State's harness tracks, which also rely heavily on OTB's to broadcast the tracks' simulcast signals."

This unprecedented support for the status quo is completely misguided, its two concerns irrelevant to the obviously efficient idea of having one rather than seven entities manage on- and offtrack betting in the state. An appropriate revenue stream to government, and the footnote-level issue of harness racing's broadcasting needs, can both be addressed legislatively, and are not reasons to perpetuate a failing system.

The only people in favor of the current structure of New York racing are those who would lose their jobs if it were changed, and the politicians who would lose their power to appoint those people to their jobs. The operators of the OTB's are not the villains here. They are merely doing what legislators like those on this committee keep telling them: maximize revenue for their companies and the state coffers under a wasteful system that is doomed to fail. The bad guys here are the legislators, who apparently will make any argument, no matter how flawed or contrary to the public interest, to perpetuate that system.