Opinion

Racing’s big losers

Corruption, shady jobs, payola, cooked books, wise guys — and oceans of red ink. For many, that’s what comes to mind when they think of horse racing. In New York, much of the industry’s woes can be traced to one source: govern ment. Isn’t it time we scratch state and local government — and politics — from the card, once and for all?

Some think a new Triple Crown winner is what the industry needs. At Saturday’s Kentucky Derby, Eskendereya is the favorite — but whichever thoroughbred wins, speculation will spread about whether that horse can take the Preakness Stakes on May 15 and the Belmont Stakes on June 5. Horse racing, after all, hasn’t had a Triple Crown since Affirmed in 1978; some think a new winner could capture the attention of the public and give racing a much-needed boost.

But racing requires deeper changes — particularly in New York, which is so vital to the industry’s future.

Since 1955, the New York Racing Association, a quasigovernment, nonprofit entity, has run the three state-owned racetracks: Belmont Park in Nassau County, Aqueduct Race Track in Queens and the upstate Saratoga Race Course. NYRA has overseen racing’s decline here while plagued by scandals and bankruptcy over the years. Often, it has sought big bailouts from taxpayers. Yet, despite its record of incompetence, state politicians in 2008 handed it another 25 years to run the tracks.

Then there’s Off-Track Betting. It’s a holy mess. The bankrupt New York City OTB, for example, claimed it would have to close without a bailout. The bailout, amazingly, did not come. Yet the city OTB quickly changed its tune on April 17, saying it could stay open for another year. How? Under its plan, 60 percent of betting parlors will be shut and staff trimmed (35 non-union jobs were cut Friday). At the same time, OTB plans to install hundreds of Qwik Bet terminals in sports bars. And oh, yes — New York City OTB will delay paying its bills as well.

Meanwhile, the OTBs in Nassau and Suffolk counties are best known as patronage mills, serving whichever political party happens to be in charge. After being out of power for a decade, the GOP now has a legislative majority in Nassau County, so that means new spots for party operatives at OTB. Meanwhile, the annual profit that Nassau OTB hands over to the county has disappeared (though county government still gets revenues from a tax on winning bets).

Video-lottery terminals (i.e., slots) at the tracks are supposed to raise money to address some of the financial problems facing the industry in New York and help Albany close its budget gap. Legislation paved the way for slots back in 2001, and they’re up and running at various tracks, including Monticello Raceway and Yonkers Raceway. Aqueduct was also supposed to get slots, but the state has been unable to get them rolling at its facility for nearly a decade now.

The latest setback, as Post readers know, was an unsavory deal cut by Gov. Paterson and legislative leaders to have a politically connected group run the Big A slots. The deal fell through in March, so it’s back to the drawing board. This time, the selection process is supposed to be fair and transparent. Yeah, right.

Now it turns out the governor has yet another bailout plan: NYRA would borrow $17 million of a $250 million lending program that the state set up for whichever group gets to run the racino at Aqueduct. This is billed as getting NYRA through some tough times, and the money would be paid back out of NYRA’s future revenue take from Aqueduct slots. Heard that before.

When it comes to politics and horse racing in New York, it’s always endless dysfunction and financial loss. There’s no reason to expect anything different as long as government owns and effectively runs the sport.

Yes, horse racing has suffered a decline in popularity. But under a government model, it’s no surprise that the bookie loses dough: The tracks are shabby, grossly underused and can’t make money; patronage, political wheeling and dealing, and corruption flourish; books are cooked, and taxpayers, racing fans and the industry suffer. Politicians call the shots, so the focus is not on serving the customer but instead is about serving political interests.

New York racing will only get healthy when government is booted from the sport. In the ’90s, Mayor Rudy Giuliani suggested privatizing New York City OTB. State Senator Dean Skelos, Republican minority leader from Nassau County, reportedly echoed that thought this month. In fact, privatization can be a big part of the answer, assuming it’s broad based.

It’s time to sell off OTBs around the state and privatize the three state-owned tracks or, at the very least, bid out track operations under a true competitive process. A Triple Crown winner would be great, but getting horse racing in New York out of the hands of political operators would be even better.

Raymond J. Keating is a Long Is land-based economist and writer.