A Stitch in Haste

My father, a retired New York City police officer, is not a very political person. And although he very much believes in personal responsibility, he is far from a radical libertarian ("People who want to legalize drugs are idiots.").

Still, he does have his libertarian moments, and one of my favorites is:

"How can OTB possibly lose money? Only the government could screw that up!"

Yup:

OTB Chairman David Cornstein told The [New York] Post that the city's only authorized bookie is in such dire straits, it won't be able to pay its bills come March. "We'll be in the red," he said yesterday.

Cornstein blamed most of OTB's problems on the increasingly large sums Albany forces it to fork over to the state and racing industry. Pension, health and welfare costs also are skyrocketing.
...
OTB began experiencing a severe cash crunch last year, when the state imposed a 0.39 percent regulatory fee on its entire $1.1 billion betting handle in return for the right to televise nighttime thoroughbred races.
...
Statistics compiled by city Comptroller William Thompson shows OTB lost $10.7 million on its operations in the fiscal year that ended June 30.
...
OTB has been a cash cow for the city for most of its 35 years and has increased its betting handle, despite a decline in horse racing's popularity. But bets are down 1.6 percent in the first quarter this year.

Remember, the nature of parimutuel betting is such that it is mathematically impossible not to have gross profits. The only way to drive horse betting into the red is some combination of gross mismanagement, fraud or -- surprise -- oppressive taxation. Do the math: 0.39% of $1.1 billion is $4.29 million every year in protection money to the state and the racetracks (same difference, incidentally, since the racetracks are a non-profit monopoly chartered by the state).

For two years in a row we have had wondrously exciting Triple Crown contests. Do the bureaucrats sucking New York's racing industry dry really think the economics of the business are going to get any better than they have been? Can they really be so blind and stupid as to push their 35-year cash cow into bankruptcy?

Yup.

POST SCRIPT: Here are two other things that only the government could screw up: ferry service and subway fares.

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