Officials in New York have failed to agree on a bailout plan for the New York City Off-Track Betting Corp., which issued layoff notices Friday to its 1,300 workers as it prepares to close down April 11.
A last-minute plan to let NYCOTB delay more than $1 million in some of its statutory revenue sharing distributions, such as to the New York Racing Association, collapsed March 26. The plan would have provided the cash flow to keep the OTB operating the next couple months, during which time a final plan could be approved to try to right the money-losing operation.
“There is no OTB deal,’’ said Assembly Speaker Sheldon Silver.
“We’re willing to do it. The (governor) has difficulty with it,’’ Silver said of an Assembly plan to keep the OTB afloat.
The Democratic leader declined to discuss the plan, but there were several competing measures floating around the state Capitol. One, according to sources, was an Assembly push to let NYRA take over the lucrative internet and phone wagering business of the OTB; it was unclear how that would solve the OTB’s cash problems, but would have gone far in addressing NYRA’s own fiscal headaches. Gov. David Paterson rejected the idea.
After the breakdown in talks, NYCOTB announced Friday night it had mailed layoff notices to its employees. “It was hoped that there would be a resolution by close of business on March 26, which would make it unnecessary to send the notices,’’ the OTB said in a statement.
A source close to the negotiations said Paterson has insisted that no state bailout money be a part of the plan to keep the OTB temporarily afloat as talks continue in the coming weeks or months on a long-term solution to the NYCOTB’s fiscal issues. The OTB in December filed for Chapter 9 bankruptcy reorganization protection.
But legislative sources say the OTB is bluffing on its closure threat, and that there are administrative avenues for it to get the money it needs to stay afloat for the next couple months. They also insisted the OTB has cash in reserves to avoid layoffs.
The NYCOTB matter became a major sticking point at the Capitol March 26 as lawmakers sought to pass a $4.6 billion emergency bill to keep the overall state government running when New York’s fiscal year begins April 1.
Lawmakers and Paterson sought to include a NYCOTB provision in the emergency bill, but talks stalled over how to bail out the nation’s largest off-track betting corporation at a time when the state is looking to cut a whole range of popular programs during an election year.
“That’s the problem, OTB,’’ Senate Democratic Conference Leader John Sampson, said of snags that developed in budget talks March 26. Asked if a cash bailout of the OTB was under consideration, he said, “Everything’s under consideration.’’
But the talks blew up, and Assembly Democrats passed the emergency appropriation bill without any amendments dealing with the OTB. The same bill is due to pass the Senate March 29.