Sen. John Sabini, at left, the Queens Democrat nominated by Gov. David Paterson to become the next chairman of the state Racing and Wagering Board, was asked today about the offers to various government players by Dino Amoroso, head of Nassau OTB, to play a leading role in helping to effect regional changes.
"The governor has said he wants to look at all aspects of racing and OTB, to find ways to make for a better return to taxpayers. Certainly Nassau runs a very good program and we should look at it. But I'm not confirmed yet, and we'll look at this dispassionately," he said.
Broader discussion of how to administer state OTB's has been reopened by the agreement over the weekend by which the state will take over New York City's operation, marking the end of a long-running issue that involves 1,500 public jobs. The city has objected to the arrangements by which betting takes were distributed among the parties involved, including the state, the tracks and the city.
At Suffolk OTB, president Jeff Casale points out that the basic questions of distribution linger in the wake of the state takeover of the city operation. For example, he said that if the same arrangement as the city's were to be imposed on Suffolk, annual income to the county's taxpayers would go from between $2.5 million to $3 million, down to zero.
Dan Janison
Comments (2)
Casale is right because there is no racetrack in the Suffolk OTB region. Therfore Suffolk, unlike Nassau and NYC, does not get a piece of this part of the surcharge. Suffolk County get the regular surcharge on winning bets, which if the NYC takeover is the model, would be lost to the state in a state takeover. When I was President of Suffolk OTB we were giving $5-6 millioon to Suffolk County and about half of that came from the surcharge. Since then, over the years, the state has taken a bigger and bigger bite out of OTBs profit, so that most OTBs today deliver only the mandated surcharge money to their counties. (By law this money must go directly to the counties and can't be used to help the OTBs bottom line). That was the problem NYCOTB was facing.
The whole distribution formula, the future of the regional OTBs, the relationship between the tracks and OTB has to be looked at in its entireity. You can't continue to do business as usual. Hopefully, Senator Sabini will be allowed to to an objective analysis and reach objective conclusions. One thing he should look at is the revenue the tracks will be or currently are receiveing from VLTs. I've always felt that this revenue should be used in such a way as to roll back the oppressive distribution formula now imposed on the OTBs. When OTBs were first conceived in the mid 1970s, they were giving about 30% of their net revenue to other parts of the racing industry and the state. By the time I got their in the mid 1990s they were giving over 75% of their net revenues to the racing indusrty and the state..thus becoming the cash cow to keep the industry alive. I'm not sure what the split is now, but it has to be much worse for the OTBs. Also, Sabini should look at the economies of scale that can be had by combining certain functions of the industry like tote vendors, telephone account wagering and television platforms. This will only happen if the tracks and the OTBs work together and not against each other. It is a tall order, but someone has to have the courage to make it happen.
One other comment: raising the takeout is NOT the solution. It just takes more money out of the bettor's pocket and decreases the amount of churn a bettor will make on his winnings. The less people bet, the less revenue there is for the OTBs and the tracks. The less revenue there is, the less profitability there is. That's why raising takeout is NOT the solution.