Sale of OTB System Not in New York Mayor's Budget
Updated: Thursday, February 14, 2002 8:50 AM
Posted: Thursday, February 14, 2002 8:22 AM
Photo: Associated Press
New York Mayor Michael Bloomberg, outlining his budget that does not include the sale of off-track betting system.
The new mayor of New York did not include the sale of the New York City Off Track Betting Corp. in his city budget for the coming year, but he is keeping his options open next year.
Budget documents released Wednesday show Mayor Michael Bloomberg has still not closed to door to the prospect of selling the lucrative OTB, which last year handled about $1 billion in bets. The OTB was tentatively sold last year by Bloomberg's predecessor, Rudolph Giuliani, to a consortium headed by Magna Entertainment. But the sale was not, as required, approved by the state Legislature.
In his first budget plan since becoming mayor, Bloomberg on Wednesday said the city is facing a $4.8 billion budget deficit, which will grow even more in the ensuing years. But Bloomberg has shied away from moving to sell the OTB right away, preferring instead, sources said, to learn more about the entity and to see if the proposal Giuliani accepted was the best for the city's finances.
However, the city budget shows money is being included in revenues in future years from the sale of the OTB. A section of the financial plan shows a line that notes the fiscal impact from delaying the sale of the OTB and other non-tax revenue changes; it says the delay of those actions will cost the city $447 million this year. But after that, the budget documents show, the city will take in $121 million in 2003 and $226 million from going ahead with the sale of the OTB and the other actions.
A source said Bloomberg has still not settled the issue, but did not rule out, if the legislature and Governor George Pataki send the right signals, that the matter could come to life this year. But, at the very least, the source said, including the revenues from the sale of the OTB in the next couple of years serves as "a place holder'' for the issue in case Bloomberg does accept the advise of some of his fiscal aides and proceeds with the sale.
Bloomberg recently said he has begun a search for a new "super executive'' to head the OTB because "at the moment we don't have anybody really trying to maximize the value of that asset.'' He added that he "fundamentally never thought that we should be in the gambling business, but it is a valuable asset to the city.'' He said his administration was wrestling with whether to keep the OTB and the revenues it brings every year or to sell it for "a significant amount of money, which would help the rest of the city.''
Giuliani selected the Magna team over the New York Racing Association. The Magna offer, the city said, would be worth about $260 million up front, and over time would total $389 million. Giuliani said the NYRA offer came in $113 million below the Magna bid.
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