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Tuesday, April 13, 2010

The Hurt in New York Quantified

As more details come out about the proposed plan to 'save' NYCOTB, it is obvious the early description of how racing was going to get treated in a bailout may be coming true.  One proposed bill will cost Monticello Raceway $2 million in the next year and does nothing to address past due amounts OTB still owes them.  With a 50-50 split, this means the purse account at Monticello will lose $1 million and the racino operator will have to cut salary expenses by 5%.  All this occuring as Monticello has been recovering from their own near financial collapse.  But at least the people who may be losing jobs at Monticello will be comforted in knowing (patronage) jobs at NYCOTB will be saved.

What does $1 million mean to the purse account?  Let's say the average purse at Monticello was $4,000.  This million dollars reduction would mean the horsemen will be losing money to fund two hundred and fifty races or roughly twenty days of racing over the next year.  Of course, they won't cancel those days, but it may mean purses need to be cut significantly to make up the shortfall.  What about the impact to Yonkers Raceway?  They are facing a possible loss of roughly $28 million.  I don't even want to think what the impact could be on Yonkers.  

In a way, I guess we shouldn't complain.  At least there will be a standardbred industry standing.  As for NYRA, cuts in their payments could result in their closing and second trip to the bankruptcy courts.

As bad as it may be, it wouldn't be bad if this was a one time fix.  Unfortunately, OTB is broken, beyond repair.  More likely than not, next year will bring another 'fix', then possibly another and in the long run, the tracks may never see a dime of what was legally owed to them. 

Kill OTB now.  It will be less painful in the long run.

Rosecroft Update:  The Maryland Legislature did not provide the relief Cloverleaf Enterprises claimed they needed to prevent a final shut down on April 19.  Unless management changes their mind, it appears Rosecroft may be doomed.


JLB said...

It is also remarkable that they are reportedly thinking of increasing the surcharge on winning wagers by 1%.

It is difficult to overstate the pernicious impact OTB has had on NY racing since its advent almost 40 years ago. The latest proposal is, as you have indicated, nothing more than life support which is doomed from the outset to fail.

Pacingguy said...

Thanks for reminding me of the 1%. The article I saw that in was not clear if that was OTB bets or all wagers. Either way, it is the wrong step. We don't need the cost of making a bet more expensive.