New Haven Independent

Edwards (pictured) was trying his luck one recent afternoon at the Sports Haven off-track betting parlor on Long Wharf, where he gathers with friends every week. The venue’s dwindling fortunes, made worse by an industry dispute, threaten to stick the city with a half-million shortfall in tax revenues.

The issue came up at a recent meeting of the aldermanic Finance Committee. City officials warned of a loss in off-track betting revenue, all of which comes from Sports Haven.

Unfazed by an economic downturn that’s deflating the gambling industry nationwide, Edwards took a seat by a row of televisions in the rear of the betting parlor. Edwards, a hefty retired caterer from West Haven, sat across from his buddy Bill Raney, a retired machinist from the other shore, East Haven.

Love Trumps Impressionism

Mid-afternoon on a Friday, the daylight slipping away outside, both had their eyes on the Aqueduct track in Queens, N.Y. It was the seventh race of the day, an allowance race for female horses only. Peering through glasses at a racing sheet, they checked off their picks with golf pencils. Raney rooted for two horses: According to Plan and Impressionism, who was favored 2-1 to win.

Edwards picked only one: A 4-year-old named Always for Love. The mare was a longshot, with odds of 7 to 1.

Around 3:20 p.m., the horses ripped out of the gate. With a man named Angel Arroyo at the reins, Always for Love galloped to the lead.

“Come on Angel!” cried a younger bettor from across the room. “Get ‘em up there baby!”

Angel did. Always for Love pulled a half-length ahead of Impressionism for an upset victory. It was her first win in eight races this season.

Raney (pictured) scrapped his tickets. Edwards grinned wide, seeing his four dollars multiplied into $32.

Before he could collect his money, however, the house would take a cut. So would the city: Levying a tax that’s set by state law, New Haven takes 3.5 percent of the total money wagered, plus half of the money Sports Haven makes in rounding off bets to the dime.

Then Edwards’ winnings would be calculated.

High Stakes

Over the years, the betting revenue has brought a healthy stream of cash into a budget that’s heavily reliant on the property tax.

Last fiscal year, the tax on bets at Sports Haven, both on the phone as well as in the parlor, brought the city a total $1,099,955. In the previous year, FY07, off-track betting (OTB) revenue totaled $1,256,498.

Based on those numbers, the city originally budgeted for $1.3 million in OTB revenues this fiscal year. But as the monthly payments rolled in, Mark Pietrosimone, the city controller, realized they wouldn’t make that mark.

In the first quarter of this fiscal year, OTB tax revenue fell almost 15 percent. Projecting ahead based on the rate of decline, the city expects a shortfall of up to half a million dollars, Pietrosimone said. He expected the losses to be absorbed, possibly with the help of a spending freeze.

What’s driving the deficit?

A spokesman at Sports Haven’s corporate office gave two answers: An economic slump keeping bettors at bay, and an industry dispute that’s limiting their choices.

“The entire racing industry is down,” observed Thomas Hodgkins, a spokesman for the Autotote/Scientific Games Corporation, in an email message.

For thoroughbred racing, the handle (the total amount wagered) dropped 10 percent in the third quarter and close to 6 percent for the year to date, according to the National Thoroughbred Racing Association.

“We are not immune to this national wagering trend, and it is not getting better soon,” Hodgkins wrote. “We are clearly feeling the impact of the recession and the general state of the economy. And it is not just our pari-mutuel industry, because the casinos are also experiencing a slowdown in their business.”

In October, 700 workers were laid off at Foxwoods Resort Casino and the MGM Grand.

On top of a poor economy, a dispute with racetracks is pushing Sports Haven’s losses down more than the industry average.

Tax revenue from Sports Haven’s phone wagering operation fell especially hard “because of conflicts with various tracks who are restricting our customers access to their racing signals,” Hodgkins said. He declined to name the tracks.

Before a racetrack’s signal is sent to a betting venue, it needs the approval of its horsemen, according to Professor Bennett Liebman, a professor at Albany Law School and a gaming industry expert. “The horsemen at a variety of locales have believed that they had not received sufficient revenue in return for this consent,” he wrote in an email. “As a result, the signal from many major racetracks has not been made available to wagering sites.”

Another big factor cutting away at profits, Liebman said, is that horse-racing is simply losing appeal an entertainment choice.

“The problem has been that baby boomers — who given their age should be in their prime horse wagering years — have not been attracted to the sport,” he said. “Instead, they’re playing slot machines.”

The crowds at Sports Haven have been dwindling over the years. The three-story arena, at 600 Long Wharf Drive, now fills up only on big race days like the Kentucky Derby. The iconic building has been on the market since the fall of 2007, when its owners decided they needed to downsize.

“Overall, we are optimistic about our business,” said Hodgkins, “but in the near term we have to weather this economic storm, which is impacting the entire country.”

Meanwhile, Edwards and Raney said a lot of their regular betting buddies have been leaving Sports Haven for good.

“Most of my friends kicked the bucket,” said Raney, who’s been betting on horses for 40 years. “One by one, they’re disappearing.”

Though their company is dropping off, the friends said they have no plans to cut back laying down their dollars on the Aqueduct track.

“At my age, I should quit what I’m doing?” asked Edwards, who’s 80. “I’m going to have one foot in the grave and still be coming here.”