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Life after OTB

When New York City OTB accepted its last bets late last year it seemed to be an apocalyptic moment for the horse racing industry, particularly the New York horse racing industry. OTB was the single biggest betting outlet in the country, taking in about $1 billion in wagering dollars during its best years. It appeared that a sport that was already struggling with steadily declining betting handles simply couldn't afford to have that much money taken out of circulation.

With OTB closing, there may be some short term pain, but I think this will turn out to be a huge positive over time.

-- NYRA CEO and Pres. Charlie Hayward


But more than two months after the plug was pulled on OTB, ending 40 years of mismanagement and ineptitude at New York's favorite landing spot for politically-connected, overpaid hacks, racing hasn't missed a beat. In fact, it's starting to look like OTB's closure will do the sport a lot more good than harm.

"With OTB closing, there may be some short term pain, but I think this will turn out to be a huge positive over time," NYRA CEO and President Charlie Hayward said. "The opportunities for New York racing are so much better going forward, and not just for NYRA but for racing across the state."

What most everyone underestimated was the resilience of New York's horseplayers. They like the game and they like to wager. Take away OTB and most will find a way to get a bet down.

OTB players started coming back to Aqueduct, some of them on free busses run by NYRA, and they opened NYRA betting accounts. Under the leadership of Chairman John Sabini, the New York State Racing and Wagering Board got rid of a ridiculous rule that prevented NYRA from streaming races on its websites. That helped NYRA's Internet wagering business increase 150 percent.

Those who live near Belmont Park, which sits right on the Nassau County-Queens border, began showing up at the Belmont Café, a simulcasting facility NYRA quickly opened up after OTB closed. According to Hayward, it already handles more than any other single off-track betting facility in the New York area.

Not all the OTB money came back, but a lot of it did. In the month of January, the amount of money wagered on-track and through NYRA's Advance Deposit Wagering network, was up 72.7 percent. With NYRA getting a far larger cut from bets made through its wagering outlets than ones made at OTB, NYRA's revenue has actually increased since OTB shut down.

The same can't be said for the purse account. The horsemen got a decent cut when it came to a bet made at OTB and the figures that have come out since OTB closed show the purse account slated to go down about 10 percent. Yet, with revenue set to start pouring in once the slots casino opens at Aqueduct, the profits from gaming will, at the very least, offset the OTB hit. That's why no one is talking about cutting purses in the short or long-term picture.

Now that NYRA has more than weathered the potential OTB storm it can start looking ahead. The future will undoubtedly include some form of brick and mortar off track betting in New York City. It wasn't that off track betting can't work in the biggest city in the country, it was that it can't work when it's run by people who either can't or don't want to get things right. Someone is going to come in and run New York City OTB and make a lot of money off of it.

As Hayward sees it, just the fact that the dingy, seedy neighborhood OTB parlor is no more has helped racing.

"We have an opportunity to change the face of racing here in New York," he said. "One of the things that used to make me crazy is that most people's introduction to racing in New York was through an OTB parlor that they went into or walked by. We all know that those deteriorated over time and were the same places there were in 1970. They had no amenities; some places had no bathrooms."

NYRA wants to have a role in whatever is to spring up when it comes to New York City off-track betting. The best way to go about it may be to create seven or eight tele-theaters spread around the city, all of them patterned on the highly successful model in Woodbridge, New Jersey. There, there is a quality restaurant and a sports bar; the place is clean and modern and the employees aren't surly.

"I'm not saying that NYRA has to control off-track wagering, but the tracks should control it in this state," he said. "We have the legal departments to do simulcasting contracts, we know how to run the tote, how to fix television sets. I could easily imagine a Woodbridge type facility in a number of boroughs in New York City. That might be something perhaps we would operate with Yonkers."

Of course the tracks should run off-track betting, just as they do everywhere but New York. And of course there should not be six off-track betting districts in the state with six different presidents, six different legal departments and six different human resources departments.

There are so many ways that New York racing could be better off if the entire OTB mess were dealt with. But a major first step has been taken. New York City OTB, the worst of the worst, is gone. And racing is the better for it.

Bill Finley is an award-winning racing writer whose work has appeared in The New York Times, USA Today and Sports Illustrated. Contact him at wnfinley@aol.com.