When the city’s Off-Track Betting operation broke the $1 billion mark last year, its chairman, David Cornstein, presided over a celebratory press conference, saying, “The city of New York is fortunate to have the opportunity of providing racing fans in the city with first-class betting parlors, tele-theaters, and restaurant facilities where they can make legal off-track wagers on a full menu of thoroughbred and harness tracks and, at the same time, help support the city’s provision of essential services.”
Four months later, OTB was for sale.
It didn’t matter than OTB had just finished hauling in a sixth year of big profits: more than $35 million to city coffers, nearly $90 million to all segments of the racing industry, and $15.4 million for state and local governments outside the city.
The 72 OTB locations scattered around the city are thriving. They drew in more than $1 billion last year.
However, the city bookie business hasn’t always been such a breadwinner, so during his first campaign, lame-duck mayor Rudy Giuliani promised to privatize it. “OTB is the only bookie in town I know that loses money,” he said at the time. But that’s no longer the case.
Last month, a deal was struck to sell the OTB to an international conglomerate spearheaded by a Canadian racing company called Magna.
“It don’t make no sense,” says Lenny Allen, president of NYC Off-Track Betting Employees Local 2021. Once a window clerk, Allen now represents the 1800 city employees who have filed a lawsuit against the city, OTB, and the Economic Development Council to block the sale.
“The workers are afraid,” he says. “Thirty years ago they started their careers working for OTB. They got kids in school, mortgages to pay. Now they get pensions, benefits. A privateer comes in to make a profit. That’s their game. They’ll cut jobs, lay off people, anything to turn a buck. Our jobs are in jeopardy. It’s a no-brainer.”
Allen adds, “There’s no reason to privatize an agency that’s a steady cash flow to the city. C’mon, who in their right mind would want to send New York money away to Canada?”
Well, Giuliani, for one. “Privatizing makes a lot of sense now,” the mayor said at a press conference earlier this summer, standing next to Magna and OTB executives in the Blue Room. “Today OTB has an enormous market value . . . and I am very pleased to make good on my earlier campaign promise. This is a great example of how privatizing nonessential services can bring tremendous benefits to our city.”
The losing bidder, the New York State Racing Association, a nonprofit that runs the tracks at Belmont, Aqueduct, and Saratoga, is also fighting the sale and is preparing for a lobbying war in Albany to try to stop the deal.
“New York would be the only state in the country where a major race track does not control its OTB distribution,” says NYRA senior veep Bill Nader. In the racing game, 80 percent of the handle is wagered off the track. The fear is that Magna will primarily simulcast out-of-state races from its own tracks to OTB parlors in New York City, draining money from purses at the local tracks and consequently from New York’s racing industry. “The economic impact for the horseman, the 400 breeding farms, jockeys, the tens of thousands of jobs in New York involving horse racing, will be devastating,” says Nader.
Magna president and CEO Jim McAlpine tells the Voice that worker contracts, under the plan, would be honored until they expire next year, and then be renegotiated.
Aside from the OTB workers, gamblers and racing fans could be affected, too.
“I’m from New York,” says gambler Darryl B. “I can put a handle on what’s here. I know the jockeys, a few of the horses. I don’t know the outside tracks, so I don’t bet the outside tracks. They’re not familiar. The key is familiarity. When I make my money I make it from the New York tracks. I don’t make shit from the outside tracks.”
McAlpine insists that Magna’s plans to increase simulcasts and use more automation will make OTB more “open to women” and “family-friendly.” He adds, “We offer what the customer wants. We want to enhance the experience and enhance the working conditions. Technology does all that.”
But many gamblers and OTB employees don’t agree.
“That’s all we need, more of that high-tech shit,” says Darryl B. “They figure, a machine means one less employee they got to pay. It’s bullshit—there’s got to be some motherfuckin’ human element in it.”
“At a machine, you need to see,” says Paulette Sher, who worked the windows for OTB for 23 years. “A lot of customers are retired. They make the wrong bets [with machines] by accident, and they get violent and blame the clerks. They need full service.”
Sammy, a gambler who frequents the Delancey Street OTB, has it figured out. “They can talk about the sale,” he says. “But it does not matter who wins, who loses. Gamblers, they’re suckers. They say, ‘A sucker born every minute.’ Gamblers, they never win. They always get nothing.”
Contributor: Geoffrey Gray Sports Intern: Jonathan Kalmuss-Katz Sports Editor: Ward Harkavy
This article from the Village Voice Archive was posted on September 11, 2001