Last week, NYC2012 was absolved by the International Olympic Committee of any wrongdoing regarding a package of incentives presented to international sports federations during a conference at Berlin. The offer of office space and other resources to be used for marketing and sports development by the 28 Olympic sport bodies will remain a key component of New York’s bid.

London wasn’t so lucky.

Under mounting pressure and criticism, especially from IOC President Jacques Rogge, London 2012 officials elected to withdraw their incentive package that included perks such as cash credits for training facilities and free airfare.

A London 2012 spokesperson said the move was “a show of sensitivity” to Mr. Rogge’s comments stating that he did not want to see a bidding war reminiscent of the days when cash and personal gifts bought votes.

The real gaffe here was not likely the contents of the “Olympic Charters” that London offered, but the way they were presented. Discussing offers of cash and free items in a forum of IOC members, top sports executives, and the world press must have sounded horrific to the IOC president who has been charged with the responsibility of ridding his organization of corruption.

Ironically, the items described in the package could actually be a boon to the Olympic movement, if not a necessity. One of the offers – free transportation for athletes and the “Olympic family” – is actually a requirement from all of the bidders as described in the host city contract that the winner will sign shortly after the election.

Effectively, London retracted its presentation – but not necessarily what it offered. Bid officials remain steadfast that their incentives are documented in the bid books, and what’s in that dossier will remain in the bid.

Still, the impact of these events could be significant to the outcome of this race.

Already, there are rumors that London has cancelled an upcoming announcement of incentives that would have targeted some of the IOC’s biggest sponsors such as McDonald’s and Visa. At this point, New York and the other bids must be wondering whether they should just hold their tongues on any future announcements.

The result of the London gaffe has been rumblings of dissatisfaction with Mr. Rogge within the IOC. Has he gone so far to promote ethics that he’s actually stifling the progress of the Olympic movement? Will bidding become too unpredictable and too risky for cities to get involved?

Since the Olympic economic disasters of Montreal 1976 and Moscow 1980, the IOC has recovered and progressed based on innovative ideas introduced by bid committees and Games organizers, all in the spirit of the bidding competition. Los Angeles volunteered to host the 1984 Games when no one else was able to step in. For 2012, there were nine applicants, and now five of the major world capitals are competing.

To continue this trend, the IOC must try to keep the bidding competition real and free of encumbrances that will frustrate bidders, IOC members, and sports federations. Bid committees employ some of the top marketing and public relations firms in the world. When the IOC is telling them to tone down their offers – all they can do is throw their arms in the air.

Meanwhile, it seems other U.S. cities lack confidence in New York’s chances of becoming host city for the 2012 Games – and they are ready to step in.

Reno-Tahoe Winter Games Coalition Incorporated, a body organized to bid for the 2014 Olympic Games in the region, last week asked the Senate Finance Committee for $200,000 to conduct a feasibility study on the prospects of hosting. They had better hurry because the IOC has set a 2014 bid application deadline of July 28, just three weeks after the 2012 election date in Singapore on July 6.

The Nevada bid’s hopes rely on the failure of New York because it is highly unlikely that the IOC would award consecutive Olympic Games to the same country. In fact, a U.S. Olympic Committee spokesperson said that should New York win for 2012, they would probably decide to pass on a 2014 bid altogether.

Another U.S.-based bid that is relying on the demise of NYC2012 comes from San Diego, where the Binational Organizing Committee is studying the possibility of a joint San Diego and Tijuana bid for 2016. Malin Burnham, head of the committee and a prominent business leader in the region, says he is ready to put his bid into development should New York lose the July election.

If NYC2012 is unsuccessful, expect San Diego-Tijuana to make a run for 2016. Perhaps they’ll come back with a scaled-down, incentive-free bid to get the edge they need.

Mr. Livingstone is the producer of GamesBids.com.