Legislative Proposal to Bring Back NYCOTB

Two months after New York Senate Republicans blocked a measure to keep operations going at the New York City Off-Track Betting Corp., a New York lawmaker wants to put the now-defunct betting giant out to competitive bidding to get its parlors re-opened.

Senator Andrew Lanza, a Staten Island Republican, has introduced legislation to bring back to life the NYCOTB, which closed in December after the Senate refused to join with the Democratic-led Assembly on a restructuring bill to get the state-owned corporation out of bankruptcy protection.

“By restructuring the corporation to allow for a private vendor operator, the state will encourage the participation of the best and the brightest of the business world to bring new ideas and new life to this corporation. The selection process will be fair and impartial, and open to public input. This vendor will have a vested interest in the success of the corporation, and thus better motivated to run the operation efficiently,” according to a Lanza memorandum accompanying the new bill.

But the legislation is, for now anyway, a one-house bill with no sponsor in the Assembly, and some state officials have said they see no way for the NYCOTB to be resurrected. There are other side efforts going on, such as talk by the New York Racing Association that it might be interested in reopening--and rehabilitating--some of the former OTB’s more lucrative teletheaters.

The legislation also seeks to provide benefits to other OTBs in the state, which was part of the deal-breaker last December between the Senate, Assembly and governor’s office. The Lanza bill eases certain statutory payments by the OTBs to harness tracks, while permitting OTBs to also keep about $3 million annually in uncashed tickets that now goes to the state.

Beyond addressing NYCOTB, the measure also mandates the state Racing and Wagering Board to determine if out-of-state internet wagering sites are having “a detrimental effect” on New York’s racing industry. If so, the bill requires the board to “eliminate or regulate the practice” that now allows out-of-state ADWs to take bets from New York residents.

The Lanza bill would also provide health and pension benefit guarantees to former NYCOTB workers through creation of a $4.6 million fund.

The legislation calls for a 10-year initial contract for the winning bidder in a selection process that would be run by the Racing and Wagering Board. The board will have to consider an applicant’s background in racing, OTB and entertainment industries, with “preference” given for plans that have at least three OTB facilities in each of the city’s five boroughs. The winning bidder would also have to give preference to former NYCOTB workers who lost their jobs in December.

The Lanza bill is the first alternative idea to officially pop out to try to bring back to life some form of the NYCOTB. While the racing industry in New York has felt a financial blow from the OTB’s closure, groups like the New York Racing Association has tried to move on. NYRA, for example, has opened its own OTB facility at Belmont and expanded its internet business and got New York City to let it run the former NYCOTB television channel.

But some NYCOTB advocates, led by a public employees union that represented the former OTB workers, have been insisting elements of the OTB can be restored under a new business model.

“The closing of operations of the New York City off-track betting corporation was preventable. For years the corporation has struggled, yet the current board of directors failed to address the factors that hampered the success of the corporation and failed to formulate a profitable business plan. As a public benefit corporation, integral to the New York state racing industry, and as an employer of hundreds, the failure of this corporation is felt by many. Resurrecting this corporation is necessary, but only in a manner that allows the corporation to be profitable long term,” Lanza said in his legislative memorandum.

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