All the management of CD has to do is look at most of NYS to confirm that there are enough suckers willing to bet at ridiculous takeouts to make it worth their while to try this. With the exception of NYC, where mismanagement put NYC OTB out of business, OTBs upstate do enough business to keep them afloat even though they decrease the payoffs with a surcharge of 5% on win bets & 6% on exotics at the majority of their parlors. In fact, on the day of the Derby, the places are packed.
I'll admit that at least a couple of times a year I'll have a tapped phone account & I'll spot something (usually something on the board that could not have been seen with advance preparation) without enough time to get a bet in surcharge free & go to the local OTB 2 miles from my house & get the bet in rather than take nothing. Those times are rare, but I do get suckered into the surcharge even though 99+% of the time I bet surcharge free. It's the same for betting at Churchill. I'm not going to pass on a 10/1 overlay just because it would have paid closer to 11/1 last year.