Pedestrians walk past a shuttered OTB parlor in Queens. (Sept....

Pedestrians walk past a shuttered OTB parlor in Queens. (Sept. 1, 2009) Credit: AP

When the New York City Off-Track Betting Corp. closed in 2010, it left behind as much as $700 million in liabilities for the state to deal with. Reopening it to be run by Catskills OTB, which would be confined by many of the same shackles that drove NYC OTB out of business, is a bad bet. But a bill allowing just that crossed the finish line in both chambers of the State Legislature last week.

NYC OTB went out of business for a lot of reasons. The product, wagering on horse races, is steadily becoming less popular. OTB workers, as unionized public employees, get Cadillac health care and pensions, and profit recedes further. Mix in a patronage system that has politicos demanding jobs for themselves and their friends and family members, and the challenges grow even larger.

That a publicly run gambling enterprise managed to lose so much money is the perfect example of how poorly suited government is to run some enterprises.

The newly approved legislation states that Catskills OTB must recognize the same union the city OTB workers belonged to, District Council 37 of the American Federation of State, County and Municipal Employees, and give hiring preference to the more than 1,000 workers laid off when the 55 gambling parlors in the city were shuttered. Not surprisingly, AFSCME was the biggest supporter of Catskills OTB's plan.

Even Catskills, perhaps the best run of the state's five remaining OTBs, has seen revenue dip 30 percent over the past seven years. Nassau OTB has shown an operating loss for the past few years, and Suffolk OTB is in bankruptcy. This is not a growing business.

Gov. Andrew M. Cuomo, who's been silent on whether he will sign this bill, is pushing for a much-needed overhaul of the state's gambling operations. One aspect will be deciding how to deal with OTBs as revenue and profit keep dropping. And expanding one of those OTBs into a city where the last version lost a fortune, before that overhaul happens, would be a mistake. For Cuomo, signing this bill would be an insane gamble.


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