Staten Island Advance: OTB: The sequel?

Andrew J Lanza

February 24, 2011

Published: Wednesday, February 23, 2011, 9:52 AM     Updated: Wednesday, February 23, 2011, 9:55 AM

Give state Sen. Andrew Lanza credit for sticking with a thorny issue that other elected officials might have walked away from and never looked back.

In December, Mr. Lanza along with 21 other state Senators, voted against a bill to bail out the city’s foundering Off-Track Betting Corp.

It was the right move in the eyes of many people. That’s because OTB, despite the long-held assumption that legalized gambling is a can’t-lose proposition, has actually been losing money for years. OTB took in nearly $1 billion a year in bets, but competition from casinos and other gambling operations and gross mismanagement cut deeply into its revenue. And the huge share the state greedily claimed from its revenue stream made it a net loser.

Finally, at the urging of Mayor Michael Bloomberg and others, the state refused to prop it up any longer. An 11th-hour measure to save OTB failed to pass in the Legislature and OTB’s operations were shut down. That put Mr. Lanza on the bad side of OTB employees who were suddenly without jobs and benefits.

The Republican lawmaker took his lumps from the bitter employees and public employees unions — not his base constituents by any means — but, to his credit, he didn’t let the issue go.

This week, he introduced a bill that would reconstitute OTB as a private-public partnership with an independent contractor taking over the operation. The bill calls for at least three betting parlors in each borough and requires the new managers to give priority to re-hiring former OTB employees with a health benefits package resembling what they used to have.

In addition, it would require the state to set aside a fund of $4.6 million to cover the health care costs of retired employees who don’t seek to get their old jobs back.

Mr. Lanza is enthusiastic about his initiative.

"The potential for revenues is tremendous," he said. "We are talking about something real here."

The lawmaker speculates there would be "three or four potential suitors," including race tracks in the state.

If passed, the bill calls for the state to issue a Request for Proposals (RFP) from entities interested in taking over OTB.

Noting the unhappy result of the failure of bailout bill he voted against in December, he said, "Good people were put out of work. This gives us the opportunity to restore jobs and provide a revenue stream."

If all goes according to his plan, it would do that, and we hope his plan succeeds.

But even if a private operator were able to run OTB more efficiently — and it couldn’t be run any worse than it had been — many of the same factors that led to the demise of the original OTB are still in place. In particular, if the state demands the same exorbitant share of the proceeds it used to demand from OTB, it’s hard to imagine profit-minded private operators stepping forward to seize such a dubious opportunity.

Realistically, we can’t help but wonder if the time for off-track horse race betting hasn’t passed. Still, for the sake of the former employees, we hope we’re wrong and that Mr. Lanza’s bill passes, that he gets appropriate "suitors" and that OTB is resurrected as a financially viable operation, something it hasn’t been for years.