Next Governor’s Horse-Race Troubles Won’t End in November

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Here’s a question for Andrew Cuomo, when he finally comes out of hiding and officially runs for governor: How does he feel about horse racing? Not, that is, which thoroughbred Cuomo thinks will win the Kentucky Derby this spring. But whether New York State should be in the horse-racing business at all, considering it must be the only bookie in the world to chronically lose money.

On Monday, in a courtroom about six blocks south of Cuomo’s current state attorney general office, a federal bankruptcy judge listened to arguments from executives of Off-Track Betting and the New York Racing Association. The first is the state agency that takes wagers in the city, and the second is the quasi-private corporation that oversees horse racing throughout the state. OTB declared bankruptcy in December; it owes $220 million to hundreds of creditors, including $15 million to NYRA. In court, NYRA claimed that OTB is simply using bankruptcy as a dodge to avoid paying its bill.

NYRA has reasons to seek out all it's due: The organization itself is cruising toward a $30 million deficit and says it may run out of cash by June. (Back in 2008, even before the economy had been totally decimated, the NYRA had to sell the state the land under three of its tracks for $75 million.) OTB’s president, Sandy Frucher — an old Mario Cuomo aide — topped those scary stats by estimating 70,000 jobs will be lost if his plan to reorganize OTB is thwarted.

Before OTB was a screwed-up state agency, it was a screwed-up city agency, and its transformation from one to the other only added layers of complicated problems. It is burdened with a convoluted, legislatively mandated expense-paying formula, and suffers from competition with other state gambling gimmicks. (Doesn't it seem like there's always a new way to throw away your cash? "Would you like a Mega Millions or a Sweet Millions ticket with your bagel, sir?")

As a state agency plagued by long-running woes, OTB is far from alone, of course. The state’s hospital system is heading for another crisis as the percentage of uninsured patients it treats soars. The MTA, which swings regularly between boom and bust, is in another trough that will force hundreds of layoffs. The recession has certainly made things worse, but none of the underlying problems are new.

Which is why Cuomo — and David Paterson (assuming he’s still in the contest) and Rick Lazio — need to be asked detailed questions about just how they see the state’s role changing in these industries. For decades, governors and the state legislature have pushed the tough issues further down the road. There will be more triage in Albany next month as the state budget is slapped together to get New York through the immediate squeeze. Longer term, raising taxes, again, isn’t the answer; wholesale privatization isn’t desirable or likely, especially in medical care; video slot machines, if they ever arrive at Aqueduct, are merely another temporary fix. The cultural tradition of Saratoga and Belmont — not to mention all the unglamorous stable and breeding jobs of everyday horsemen and women — is, in its own way, as worth saving as the subways and the emergency rooms. But the state’s part in these very expensive fields needs to be rethought in a serious and far-reaching way. Or else more than the ponies are going to stop running.