EDITORIAL: NYC OTB is losing the race

In Albany, where it's all about the money, the dealings get ugly very fast when there just isn't any more of it to spread around. Hospitals are being shuttered, mass transit services cut, and school funding will be reduced. The first unmistakable sign that business as usual is over, however, could be the closing by week's end of New York City Off-Track Betting and the resulting loss of 1,300 jobs.

After years of ignoring the problems of a declining industry, it's no surprise that Albany can't come up with a quick fix. The city OTB, now run by the state, takes in $1 billion a year but can't break even. Mismanagement, declining interest in horse betting and the legislature's demand that some profits get diverted to the racing industry are all to blame.

If the city's OTB fails, the state is on the hook for $700 million in worker benefits. The Saratoga season will likely be over - as possibly will be all thoroughbred racing in the state. The remaining OTBs, including Nassau's and Suffolk's, will be on even shakier footing.

The usual Albany solution of a taxpayer bailout is no longer feasible, yet none of the players will compromise. Gov. David A. Paterson has proposed a one-year cut in OTB payments to racinos, breeders and the always-broke New York Racing Association. The Senate wants to add a 1 percent surcharge on winning bets. There's also a move to rush through a new video lottery terminal contract for Aqueduct. All are being resisted.

Albany, which created Off-Track Betting to fund education in New York, may be close to realizing it bet on a loser. hN