Kentucky Losing OTB Network in June

Declining handle is forcing the closure of the state's only freestanding OTB network.

Kentucky's only freestanding off-track betting network will close following the June 8 Belmont Stakes (gr. I) because of a significant decline in handle.

Kentucky Off-Track Betting is a partnership formed by Churchill Downs, Ellis Park, Keeneland and Turfway Park in 1993. The business operated OTB facilities in Corbin, Jamestown, and Maysville.

"This has been talked about for awhile," said Laura Prewitt, KOTB's general manager. "We didn't hit a breaking point, if you will, it has been part of a trend. The bottom line is that it is not profitable and does not make economic sense to keep operations going."

The main impetus behind the partnership's creation was to generate money for Kentucky purses. As determined by the legislature, 46.5% of what passed through KOTB's windows went to purse accounts. Ten years ago, the KOTB network handled $25.7 million. The annual handle, however, has steadily dropped since then to $10 million in 2012, according to Prewitt.

While KOTB kept 13.5% for operations, its cut of the handle has never been enough to fully cover expenses, Prewitt said. Racetrack executives have been keeping the network solvent by contributing a portion of their 30% cut of the handle.

"We have stayed open at the expense of the owners because of our commitment to our faithful patron base, and to help add to purses," said Prewitt.

KOTB's first outlet opened in April 1993 in a Corbin Holiday Inn. The outlet moved in 1999 into freestanding building off I-75 and attracted a lot of patrons from Tennessee.

An OTB in Jamestown was opened in July 1993 and is located close to Lake Cumberland State Park. The third OTB opened in Maysville in August 1993 in a historic building on Second Street, the facility contributing to the downtown area's revitalization. The final OTB was built in Pineville in 1996 before being closed in June 2010 due to decrease in simulcast handle.

The cities where the OTBs were located received 0.75% of the handle and the counties received 0.25%.

"We've built relationships with both our employees and our communities, and we fully understand the impact this will have on them," Prewitt said. "It is imperative that we look critically at our industry and business models to find ways to grow the sport, and it would be irresponsible to continue ventures that are not profitable."

Approximately 20 full and part time employees will be affected by the closings. Prewitt said that KOTB will offer employees outplacement assistance.