Rep. Anthony Weiner, a Democrat of New York, yesterday waxed indignant about the 36.2% drop in total revenue generated for New York City’s coffers by the Off-Track Betting Corporation since 2001. One core subset, revenue from the surtax on winning bets, has declined to $20 million a year in the most recent year from $20.9 million in 2001. No doubt the OTB has been poorly managed. But Mr. Weiner has missed the main point. The OTB is not a much-loved city institution such as the New York Public Library. Nor has it fallen upon hard times because of Republican appointees. Rather, the OTB has long been a by-word for jobbery in all administrations, not least in that of the last Democrat to hold office at City Hall, Mayor Dinkins.

The OTB is a classic product of 1960s New York liberalism, whose proponents most certainly did not trust the people to make their own decisions about their own financial lives. Its purpose was to remove an important stream of income for the mob while raising money for the city and the state. Significantly, a third objective was to aid the Empire State’s racing industry. According to its Web site, whose tone is uncannily reminiscent of those Titoist extollations of the Yugoslav corporations of the era, this was “a relatively new form of governmental entity run along the lines of a private enterprise…the history of New York City OTB is also part of the history of New York City.”

It is hardly original for Mr. Weiner to suggest that the OTB is the first instance in the annals of gaming that the house went broke. Mr. Giuliani employed the same sound bite in 1993. In practice, he was able to do too little about it during his mayoralty because of the resistance of key Democratic financial supporters such as the OTB employees’ union, Local 2021, which has given generously to Mr. Weiner’s campaigns. Local 2021 feared losing some of workforce of 1,800 if the status quo altered.

The real reason why OTB is losing ground is not because this particular crowd who now run it can’t organize a panic on a doomed submarine. Rather, it is because the state and municipality shouldn’t be in the business of running gambling or of underwriting the nags. What other enterprise is run on such lines? The failure of Mr. Bloomberg is insufficient commitment to reform along the lines of political principle, rather than insufficient micro-management, as implied by Mr. Weiner.

A viable scheme for real change at OTB was first outlined as far back as 1991 by the New York privatization commission chaired by Ronald Lauder. Most of its themes have been taken up with rather greater vigor in jurisdictions other than this. But the greatest oddity here is the enthusiasm of liberals such as Mr. Weiner for what, in effect, is a regressive form of indirect taxation. As Ken Auletta, an early OTB boss, has noted, the OTB did not merely draw a hard core of richer gamblers away from existing illegal operations; they also drew a new cadre of low income punters into gambling. Thus, the city, the state and another rich private enterprise are being subsidized by some of our poorest citizens. That is the scandal of the OTB.