NY Panel to OTBs: Hold Off on Long-Term Deals

A New York government panel studying whether to alter the current structure of the state’s off-track betting system has asked the OTBs to hold off on signing any long-term deals, a move that suggests the panel could have sweeping changes in mind.

The Task Force on the Future of Off-Track Betting held its first organizational meeting of its board May 14 – 11 months after the panel was created and more than two months after it was to have, by law, issued a final report to reform the long-maligned OTB system that has pitting the quasi-government entities against racetracks.

The four-member panel – it is missing one member because Assembly Speaker Sheldon Silver has yet to name his selection to the task force – made no decisions or provided any signals what kind of changes might be in store. Many in the racing community have called for some sort of joint ventures or mergers between the state’s six OTBs and tracks to end the decades’ old fight for a share of dwindling pari-mutuel gambling dollars.

But Joseph Mahoney, a spokesman for the state Racing and Wagering Board who is also handling press queries for the task force, said the members of the new panel requested that all OTBs in the state refrain from entering into any long-range contracts with vendors or other deals.

“Once they come up with a reform agenda they would prefer not to have any obstacles in the way,” Mahoney said when asked the reason for the request.

He said it is too soon to determine where the task force might be heading with its requests for Gov. David Paterson and legislative leaders. “But this is a savvy group that is not going to be content with the status quo,” Mahoney said.

The task force was created last June when Paterson and the Legislature bailed out New York City by taking over the financially ailing New York City Off-Track Betting Corp., which Mayor Michael Bloomberg was threatening to shutter because of its money-losing ways. The deal essentially transferred responsibility for a red-ink operation from the city to the state.

The takeover, though, required a task force to be created to study whether changes can be made to make the off-track betting system and racetracks work better together. The law required the task force to report its recommendations by March 1 – theoretically enough time to possibly still take some action before the legislature ended its 2009 legislative session in June. Now, with less than a month to go before the end of the session, there is little prospect for any major changes to the system that all sides say is not working.

Still, the task force is set to meet again later this month and its members called on the various industry stakeholders to immediately send in ideas to improve the current system -- suggesting possibly some of its members believe there still could be time to act in the coming month.

“When OTBs are financially healthy, the taxpayers of New York are the biggest beneficiaries. Our goal is to maximize the value of OTBs to the state of New York,” task force chairman John Van Lindt, the state’s top racing regulator from 1979 to 1986, said in a statement.

"For too long, the pari-mutuel industry has been stunted by moves that put the interests of individual stakeholders over the interests of the entire industry. It’s clear that one-horse solutions aren’t going to work,” added John Crotty, a board member and a former director of JPMorgan Chase’s municipal housing finance group.

The board’s other members are Jon J. McCloskey, who was the longtime top racing analyst for the New York Senate, and Thomas Casaregola, the director of audits and investigations for the state racing board.

Of the $2.6 billion in pari-mutuel handle in New York annually, nearly $2 billion is done through the state’s OTBs.