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OTB in New York, has it’s time passed?

Posted by on September 25, 2015

The Daily Racing Form has an article on the New York Comptroller’s audit regarding Off Track Betting (OTB) in New York.

Among its findings, the Comptroller reported that there was a decline in handle from 2009 to 2013 of 19%. This decline in handle does not necessarily mean that there is a corresponding decline in wagering or racing interest over the same time period. Prior to 2009 and the onset of ADW wagering, the OTBs were the only option for people who were not at a track to wager on racing in New York, As ADW wagering became more prevalent during the period studied by the Comptroller, it was only natural that OTB wagering declined. This occurred for several reasons, first the various tracks had their own platforms that offered better or different take out schemes. Second, the companies offered rebates and other promotions for wagering with them.

The difficulty is the corresponding result from lack of wagering is the lack of contribution made to the local economies where the OTBs are located. The Comptroller said that the local counties where the OTBS are located suffered a 42% drop in payments for the same time period. This is directly related to the lack of wagering because the OTB parlors are brick and mortar and need to be staffed by employees, whereas the ADW is computer based and the individual sits at their computer screen and punches in their own ticket.

That being said, the true function killing the OTB is the greed of the tracks providing the signal. The charges that a non-racing simulcast provider paid specifically to harness tracks is substantially outweighed by the income it receives. For example, Saratoga Harness received $2.5 million for the simulcast feed on only $300,000 of handle. This disparity in charges against revenue creates a business model doomed for failure.

The OTB system was a necessity when it started, it is something now whose time has past? The future looks bleak but hopefully with good leadership and positive legislation they can survive. Racing in NY may or may not need OTBs but the local communities that receive payments from them certainly do.

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