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Down the backstretch: Off-track betting is on last legs

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Kevin Keliher ponders a bet with his friends at the Harlem off-track betting parlor in New York City. (Photo by Lawrence Delevingne)

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Men watch horse racing at the Harlem off-track betting parlor in New York City. (Photo by Lawrence Delevingne)

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Charles Clark fills out a betting card at the Harlem off-track betting parlor in New York City. (Photo by Lawrence Delevingne)

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A man naps as others relax at the Harlem off-track betting parlor in New York City. (Photo by Lawrence Delevingne)

Kevin Keliher is no horse racing novice.

Midday on a recent Wednesday, Keliher sat in the off-track betting parlor on 125th Street in Harlem, poring over the handicapping sheets for the day as only someone who has come to an “OTB” location several times a week for 37 years does.

Not everyone around Keliher was as meticulous in analyzing track conditions and jockey records. A man walked in the door announcing that he was selling untaxed cigarettes and DVDs; another, who appeared to be homeless, napped in a corner seat; and middle- to old-aged scruffy men stood cursing at televisions on the wall, littering the floor with losing ticket stubs.

Keliher, an avid horse racing fan who said he has been to 27 Kentucky Derbies, knows the lounge--one of a handful of the original parlors from 1971--is evocative of a grittier New York, but he still likes it.

“These places aren’t great,” said Keliher, 55, gesturing at the decidedly un-glamorous surroundings that allow patrons to bet on horse races from Dover Downs in Dover, Del., to Turf Paradise in Phoenix, Ariz. “But shutting them down would be a crime in itself. It’s like losing a community center.”

But Keliher and his friends might not have too many bets left.

Reflecting horse racing’s national decline in popularity, New York City’s often seedy 72 OTB facilities are slated to close June 15, ostensibly because of dwindling profits.

Bleak and anonymous as many parlors are, some function as informal community centers, where mostly elderly men enjoy one another’s company as much as the betting. Devotees and employees don’t want to lose the OTB outposts, but like it or not, off-track betting on horse racing is in decline across the country as other gambling options--like online football betting, state lotteries and Texas Hold ’Em poker--gain popularity.

“The whole horse racing industry has been stagnant and OTB is feeling the pinch as a result,” said Bennett Liebman, coordinator of the program in racing and wagering law at Albany Law School. “New York City’s problems are not in isolation.”

“Major operators in industry are facing extraordinary deficits, and the whole horse racing industry is really threatened,” Liebman added. “For years we thought the sky might fall, but now it might really be happening.”

Key indicators confirm horse racing has been in decline for years.

On-track attendance has fallen, as has overall interest in the sport since the 1970s. And during the last five years, wagering on horse racing has dropped from a 13 percent to a 10 percent share of gambling in the United States, according to the Boston Consulting Group, which conducted a 2007 analysis of New York City OTB.

“Even though gambling in the U.S. is a growing industry, wagering on horse racing is stagnant and constitutes a rapidly shrinking segment of the overall gambling market,” the report noted. “New York gaming consumers are continually presented with an abundance of other options on which to spend their gaming dollars--casinos in neighboring states and proliferating online gaming sites and lotteries within the State, to name but a few.”

Despite limited successes in states like Illinois and Connecticut, OTB establishments similar to New York City are suffering from general declines in horse betting. Even states that have improved OTB venues with plush decor and high-tech wagering systems, like New Jersey and Pennsylvania, are struggling to attract new fans and bettors.

Slot machines known as “video lottery terminals” are one way horse racing venues have survived betting declines on and off the track. “More and more states have slot machines, which has generated enough revenue that the day of reckoning has been postponed,” said Eugene Christiansen of Christiansen Capital Advisors, a leading gaming consultancy in New York. But “horse racing is contracting and OTB is just another example.”

Even as horse racing loses popularity, OTB devotees and employees don’t want to lose their parlors and are uncertain what they will do without them.

Charles Clark, 94, comes six days a week to the 125th Street parlor, where he usually places $1 who-will-win bets on nine races, often sitting next to his longtime friend, Frank. He said he has been to an OTB location nearly every day since they opened in 1971. Clark said he would probably spend more time in his Bronx apartment building if OTB closes, but wasn’t quite sure.

“I’ve been betting on horses most of my adult life, before it was legal,” said Clark while filing out his red-and-white wager form. “I’d miss it. You’re 94 years old, what can you do?”

Barbara Wallace, 45, has worked as a clerk at the 38th Street parlor--the “Winner’s Circle”--for 21 years. Behind her desk, articles on OTB’s potential shutdown are posted with various quotes highlighted in yellow. Wallace said she might get remarried if OTB closes, fearful that she wouldn’t be able to find a new job.

“After you’ve been on the job for 21 years, it’s hard to get back out there,” said Wallace, nervous about losing her position, like 1,500 other city OTB employees. “I don’t even want to think about it.”

Jerry Hatch, 64, comes six days a week to the Seventh Avenue parlor, where he likes to bet “trifectas,” which predict horses in first, second and third place. Hatch said he would go to nearby New York race tracks like Aqueduct and Yonkers Raceway instead of OTB to satisfy his habit.

“I’m a steady OTB junkie,” he said while gambling at 10 p.m. on a recent Wednesday night amid homeless men sleeping and ever blaring television screens. “From the day it started in 1971, everything I’ve earned, it’s gone to OTB.” He added: “But you’ll miss it. Everyone wagering here, it’s in our blood.”

It’s still not clear if New York City’s OTB parlors will actually close in June. The state may bail out the operation with cash, shut down some of the less-profitable parlors or sell it to a private company. But if June 15 is the last day, Keliher, the 125th Street regular, and others will be upset.

“Everyone here has something in common: the horses,” said Keliher, gesturing at the mix of Dominicans, Jamaicans and native New Yorkers hollering in unison while watching a race. “Most people here are retired or disabled. Do you take that away from them?”

E-mail: lpd2104@columbia.edu