A move by the New York Racing Association to lower the pari-mutuel takeout on pick six wagers is causing controversy even before NYRA formally proposes the plan to state regulators.
NYRA chairman Barry Schwartz said he wants to reduce the takeout on pick six bets on non-carryover days from 20% to 15% as a way to build pools. Schwartz wants the change, the second he has pushed through the past couple years, in place by April 1.
In the face of more and more competition for the gambling dollar, Schwartz has been increasingly vocal in his demands that NYRA give back more in winnings to bettors as a way to attract more betting. "It's a terrific bet that really gets terrific when there's a carryover," Schwartz said.
Schwartz said bettors have gotten more than $90 million returned to them since conventional takeout was lowered two years ago. "But there are people who think if we didn't do that, we'd have the money. They don't get it," Schwartz said.
Of his latest takeout plan, he said: "Even the OTB (corporations), if they had any brains, can't complain about this one."
The NYRA chief said OTB corporations look at takeout reduction as a loss. "Ultimately, it will help their business," Schwartz said. "They just don't get it."
But Raymond Casey, president of New York City Off-Track Betting Corp., said: "I understand the issue just fine. They get to be Santa Claus and I pay for it by laying people off. I understand perfectly."
NYCOTB recently was forced to lay off workers, citing declining revenues.
Still, Casey said, he is withholding final judgment on the plan, and whether NYCOTB will oppose it, until NYRA submits the takeout reduction to the New York State Racing and Wagering Board.
Stacey Clifford, a racing board spokeswoman, wouldn't comment because the agency has yet to receive NYRA's formal request.
Casey said he's concerned off-track betting parlors won't be able to afford to lower the takeout as Schwartz wants. "I do question the timing," he said. "There is a time and a place for action like a track risking reduced revenue in this state, but I wonder if now is that time."
He said state officials have also raised concerns the last NYRA takeout reduction hasn't worked for racing.
NYRA and the OTB corporations are battling on numerous fronts. NYRA and the other tracks have grown increasingly concerned about legislation last year that permitted OTB parlors to take unlimited nighttime simulcasts from out-of-state tracks. He said NYCOTB, NYRA's biggest account with $1 billion in business, is doing less NYRA business because it is "enticing customers" to make bets on other tracks.
"All of a sudden, Tampa (Bay Downs) is having a great meet," Schwartz said. "Why? Because OTBs (in New York) are taking their signal."
Schwartz said the lower takeout is necessary to compete at a time when NYRA's finances have been strained. "We may go to war, but the bottom line is that there'll just be a great disparity between what horses pay on track and off track," Schwartz said. "There isn't a business in the world that raises prices when business is bad, except the OTBs."