Off-Track Betting at 50: Lessons Learned for a 21st Century City
Legalizing vices to pay for government is not new in NYC…but does it work? Just ask Off-Track Betting.
When Andrew Yang announced his bid for Mayor of New York City, he said he wanted to build casinos to help offset the cost of essential services. Using vices to pay for NYC’s budget is not a new concept. Mr. Yang only needs to go back half a century to see how and if it works.
The year was 1970 and New York City was in deep trouble. The Big Apple was teetering on bankruptcy. Bold ideas were needed to save the city. The best idea the mayor et al could come up with was to legalize gambling on horse races. If gambling could be taken out of the hands of illegal bookies, then monies generated could be taxed and controlled by local governments…and used to pay for essential services like hospitals and firehouses.
That’s how the New York City Off-Track Betting Corporation came to be. Its mission was to help fill the gap in the city’s budget, as well as help rid the streets of organized crime. The idea worked in the beginning. Off-Track Betting (OTB) generated billions of dollars for the city’s coffers, and helped push organized crime underground (though not stamping it out altogether).
On April 8, 1971, OTB opened to great fanfare in Grand Central Station with then-Mayor John Lindsey laying down the first bet. By the end of that first day, over $66,000 worth of bets were generated. In its lifetime, Off-Track Betting would operate more than 100 storefront betting parlors and generate over a billion dollars a year in bets.
Unfortunately, New York’s experiment in legalized gambling was a colossal failure. New York City Off-Track Betting was shut down in bankruptcy on December 7, 2010.
History has shown that many of OTB’s problems came from within: gross incompetence and rank negligence in management. (Then newly-elected Governor Andrew Cuomo also had some influence in its dismantling.) If Mr. Yang’s plan is to have the government run a gambling operation in order to fund schools, hospitals, and firehouses, then he and the city would be best served if the government stayed out of managing such a complex organization.
If Mr. Yang has any questions, then I recommend he watch the documentary that tells the tragic story of how the promise of Off-Track Betting failed to meet the moment for which it was created. Not only did the bankruptcy of NYC’s OTB deny the city billions of much-needed dollars, but robbed union workers of their pension and healthcare. Let us not repeat the mistakes of the past.
