The New York Racing Association appears to be on the verge of gaining tax relief for the bettors. Legislation was discussed in Albany, the state capital, yesterday that would decrease the takeout on the win, place and show people from 17 percent to 14 percent, the state surrendering 3 percent of its present 5 percent cut.
This would be landmark legislation for the thoroughbred racing industry. For two decades, states throughout the nation have bilked the horse players for every cent they could get, turning some of the more exotic pools into minilotteries. Now, we're told, New York stands ready to help save the neck of the goose that has laid all those golden eggs for the state treasury.
"We're very, very hopeful such legislation will be approved," Pat Lynch said yesterday. But Lynch, assistant to NYRA President Jim Hefferan, immediately cautioned, "You can never count on anything for sure out of Albany, not with all the political fiefdoms which have been set up throughout the state by offtrack betting operations."
The New York City OTB corporation does not oppose the NYRA's proposal.
"We need to have an attractive racing operation going to help out our business," said Harry McCabe, senior vice president of operations for OTB. "If we don't have that, we don't have anything. What we are proposing is that our 5 percent surcharge on pay-offs be eliminated. If that is done, we'd be even better off in relation to ontrack betting, by 3 percent."
No one is suggesting that the NYRA and NYOTB are staging a love-in these days. But there does appear to be a little better understanding of each other's problems. If, for example, OTB will increase its percentage from 1.75 to 3 percent for on-track purses - thus meeting parity with the NYRA - the tracks seem willing to supply approximate odds to the betting shops and to accept bets from the shop until a few minutes before post time.
There is opposition, however, from Nassau County and from the upstate fiefdoms against surrending what they perceive to be money in the bank, the 5 percent surcharge on winnings. OTB thus has an inhouse headache.
"There are several ways the loss of that money could be regenerated," McCabe said. "First, of course, is the fact that such a drop in the tax will generate a greater volume of betting. A county could even hold its separate off track pools if it wanted.
"But we don't want the fans to continue to have to bet into a buzz saw, as they have had to, whether it's 17 percent on track or into a bigger buzz saw, 22 percent with us. What we don't want is for us to still have the surcharge when the NYRA goes to 14 percent. That would be an 8 percent difference."
OTB ceased growing when the surcharge was instituted. Its telephone betting quickly dropped to 2 percent of itss total volume.
"All the big bettors quit us," McCabe remarked. "We now claim there are two separate markets, ontrack and on the races at the track at Belmont one day last summer, our business didn't pick up a cent.
"Frankly, we don't believe the 17 to 14 percent drop at the track will do as much good for the NYRA as they think, but we'll see,"
Lynch and other NYRA executives are convinced the decreased taxation on the betting dollar is vital to futue growth.
"We did have it, as a 90-day experiment, and our attendance and mutuel tax handle went up from 10 to 12 percent," he declared. "It was a light at the end of te tunnel and it was there for all to see. We are asking to have it again, starting in September, for a 20-month trial. The Pugh-Roberts survey we had taken supports our contention.
"The important factor," Lynch stressed, "is that it is the state which will be giving up the 3 percent. Maryland got 2 percent more for its purses recently, but they got it the wrong way, by taxing the bettors 2 percent more - so they will be getting 2 percent more of less. Our proposal points to increased volume, not less, that will help everyone do better by easing the strain on the bettors."
Should the New York legislature grant relief, other Eastern states would be likely to follow suit. The domino effect would go from New York to New Jersey to Pennsylvania to Delaware to Maryland, perhaps as early as 1979.