03/17/2006 12:00AM

One good start, two bad ideas


NEW YORK - The one thing everyone can agree on about the future of New York racing is that the state's archaic racing laws need to be revised before any progress can be made. No one will bid for the franchise currently held by the New York Racing Association without such changes, and even NYRA itself has said it will not seek to continue its own existence past 2007 without these revisions.

A series of legislative amendments proposed by the now-defunct Friends of New York Racing group 12 days ago was an excellent first step, including overdue and necessary alterations that would allow rebates, expand account wagering, revise parimutuel-tax calculations, and redefine eligibility for franchisees. Unfortunately, the proposed amendments also include two unappetizing portions of legislative pork that demand further inspection before being written into statute.

The first appears in the proposed revisions to Chapter 111 of the racing law, changing the calculation of the parimutuel tax so that it is based on takeout rather than gross handle. This is a matter of common sense that would bring racing into line with all other businesses in and outside the gambling world, which are taxed on their profits rather than their gross receipts. (It would be nice if federal W2-G withholding laws were similarly revised so that horseplayers were not taxed on gross receipts, but that's a matter for another day, and at least New York does not impose any additional withholding on top of the illogical and unfair federal tax.)

So far, so good, but then comes this nugget: "Five percent of the parimutuel taxes paid pursuant to this chapter shall be allocated to the problem and compulsive gambling education, prevention and treatment fund established by section ninety-nine.i of the state finance law."

That is not a typo: Fully 5 percent of the entire parimutuel tax, not 0.5 or 0.05 percent, would be given to the pseudo-scientific compulsive-gambling industry, an opponent of horse racing and sworn adversary of all forms of gambling. EBay is not required by law to devote 5 percent of its taxes to be allocated for treatment of compulsive shopping, and McDonald's does not pay a similar share to promote vegetarianism.

Every time racing tries to buy off or otherwise get into bed with the anti-gambling brigade, the results are regrettable: arbitrary wagering restrictions that damage business and penalize customers, dangerous legislation that often ends up coming back to haunt the racing industry, and reinforcement of the falsehood that betting on horses is intrinsically more immoral and dangerous than playing the stock market or speculating on artwork.

Another diversion of public and racing funds is proposed in a new Section 114 of the racing law, which would establish Horseracing New York, a "body corporate and politic constituting a public benefit corporation, the objective of which shall be to encourage cooperation amongst participants in the horse racing industry for the creation of a strong future for horse racing in this state. . . . The Horseracing New York corporation shall be funded by all New York racetracks, OTB's, horsemen, and breeders through a formula to be determined by the [New York State Racing and Wagering] Board."

In other words, there would be a permanent think tank and advisory group remarkably similar to Friends of New York Racing, whose private funding has run out. On top of the unseemliness of FNYR's proposing such a thing, shouldn't the need for such a group disappear once the laws are changed? Wouldn't continuing oversight be better left to properly constituted regulatory bodies like the Racing and Wagering Board?

Funding compulsive-gambling programs and an ongoing think tank might be more palatable if there were not such clearly worthier targets for largesse. Nothing in current or proposed racing statute addresses rescue and retirement programs for broken-down and abandoned racehorses, equine medical research, or improved drug-testing.

And what about the people who take care of those horses? Anna House, the child-care center for backstretch workers at Belmont Park, has been a tremendous success, but thanks only to the generosity of volunteers and philanthropists. New York should be embarrassed that its world-class racetracks have to run ads between races soliciting private donations to fund it. Can you imagine the New York Yankees or the National Basketball Association having to beg its paying customers to fund similar programs for the children of its workers?

Instead of throwing money at anti-gambling crusaders and unemployed consultants, how about a few dollars for the horses and the people who care for them?