SARATOGA SPRINGS, NY, December 8, 2010--This is not to minimize what happened 69 years ago Tuesday, God knows. But December 7 has another reason to add to its infamous legacy; the beginning of the end of the modern era of racing in New York.

Unknowing editorial writers at major New York dailies, most of which have been calling for the shuttering of New York City Off-Track Betting for years, are probably still dancing in the newsroom.

You can get those “good riddance to bad rubbish” headlines ready now.

The problem is they knew very little of what they were talking about, just like some Albany legislators, who look at polls and editorials but never inside themselves if they can help it.

What happened Wednesday, on balance, was not a good thing. It might be good sometime in the future. That’s if the future doesn’t run out of racetrack.

Of course, everyone knows about OTB’s past. The New York Racing Association had a chance to embrace the concept in the early 1970s, but figured it wouldn’t have the kind of impact that it did.

Who wants to bet in some seedy storefront when you can come out to the races and enjoy a day of sport? But they forgot the business they were in, a market they once had all to themselves.

Now racing finds itself in a position where without help from their competitors--off-track betting and casino gambling--it couldn’t survive without first changing the business model in a significant way. And pronto.

Create a new paradigm, lower the cost of the gambling product to effectively compete with your rivals, or die. As “Larry the Liquidator,” who knew how to use other people’s money, once instructed:

“You know the surest way to go broke? Keep getting an increasing share of a shrinking market. Down the tubes. Slow but sure.” Has anyone perused national betting trends in this brave new Millennium?

Everyone, including headline writers, knew the problems associated with the City-OTB model: Excessive patronage; gross inefficiencies; too many vice-presidents driving too many company cars; betting parlors allowed to go to seed, etc., etc.

But many of those vice presidents and most of the cars have been history for some time now; so are some of the worst, most inefficient stand-alone parlors. There have been layoffs and buy-outs. OTB was making some headway; slowly, yes, but surely.

Following bankruptcy, a plan was hatched for modernization. No plan is perfect, but elements of a new vision made sense. It isn’t right that the NYRA was left holding an empty bag that was supposed to be filled with 27.5 million dollars.

Statutory law notwithstanding, 35 cents of every dollar was bet on NYRA races at NYC-OTB last year, nearly a quarter of a billiondollars worth of handle. The contentious shotgun marriage came down to this; these spouses needed each other.

As part of the reorganization, the NYRA gladly would have let NYC-OTB off the hook for the $27.5 million in exchange for rights to OTB’s phone betting and Internet business in perpetuity.

So would have the state’s other racetracks, albeit to a far lesser degree. It might have taken some time to get even but this was going to be a home run ball grooved right down the middle.

Every track in the state depended on NYC-OTB handle. Without it, it will interesting to see how long some of the tracks can keep opening their gates. How many race days will their barn areas be able to support if horsemen can no longer make a living?

City-OTB may not be too big to fail, but they were big enough so that every track in the state that benefits from their handle can.

The New York State Racing & Wagering Board already has begun studying the possibility of rule changes to facilitate phone and Internet wagering at venues that already come under NYSRWB aegis.

The bill that would have made the reorganization of NYC-OTB possible was approved by the State Assembly, but failed to pass the Senate Tuesday.

With Democrats in charge of the Senate’s Lame Duck session until January 1, an alternative Republican bill was not put on the floor for a vote. Three Senators never bothered to even show up.

A pox on both sides of the aisle.

It is unknown what effect an 11th hour proposal made by the State’s other regional OTBs--seeking a reduction in statutory payments to the tracks while keeping their phone and Internet operations--had on the voting process. But it likely didn’t help.

The NYRA balked loudly saying that without the $20 million in statutory payments from the other OTBs, it would be forced to close. So, what are the current real world consequences?

Oh, not much. Only 800 more people out of work and the State, already $10 billion in the hole, according to State Senate Conference Leader John Sampson (D-Brooklyn),* now on the hook for $600 million in pensions due NYC-OTB employees

*updated to original post Dec. 10, 2010

Which reminds us of a song, specifically the third chorus of "Summer, Highland Falls" written by New Yorker Billy Joel:

“And so we'll argue and we'll compromise
And realize that nothing's ever changed
For all our mutual experience
Our separate conclusions are the same
Now we are forced to recognize our inhumanity
A reason coexists with our insanity
And so we choose between reality and madness
It's either sadness or euphoria.”