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Deal on Video Streaming Approved in New York

New York City's off-track betting handled 40% of the state's pari-mutuel bets.

An agreement to permit tracks and OTB corporations in New York to stream live racing over the Internet was approved Dec. 22, government officials and industry negotiators say.

The deal, pushed by the state Racing and Wagering Board, came as the state’s pari-mutuel industry scrambled its way around after the death of the New York City Off-Track Betting Corp., which handled 40% of the state's pari-mutuel bets.

"We’re very pleased that the major financial stakeholders in the New York racing business came together and acted in their common best interests," said Racing and Wagering Board chairman John Sabini.

A draft agreement for the Internet streaming of races began circulating last week among the state’s racetracks and OTBs, but signatures were slow in coming. Officials pushed to get the deal before Christmas.

The streaming deal, blocked by long-battling forces within the racing and OTB communities, required unanimous agreement by all the different stakeholders in the state. The document  will be in effect for one year. It is uncertain how quickly the different entities will be able to get video streaming of races turned on.

Industry officials are looking for any avenues—from free bus rides to Aqueduct by the New York Racing Association to a quicker application process for ADW patrons—to keep NYCOTB customers from migrating to out-of-state bookmakers.

Internet and phone betting accounted for about $140 million of the $750 million in bets at NYCOTB over the past year, according to OTB officials.

NYRA has been the loudest critic of a racing board interpretation in 2006 of the state’s Internet pari-mutuel law that has permitted OTBs to block the track operator from streaming live video of races. Bettors could wager over the Internet, but had to settle for taped video of the races. It pushed many bettors to Betfair/TVG and other out-of-state ADW companies.

NYRA says the NYCOTB shutdown will cost it about $32 million in purse funds and operating revenues. But it says it can get a healthy portion of that money back if it can drive more bettors to place their wagers directly with NYRA. Video streaming, NYRA President Charles Hayward said recently, would be one of those tools.

As part of the liquidation of NYCOTB, the one-time betting giant planned to distribute this week 90% of $14.6 million it had in a special pot of funds known as "indirect commissions." The recipients included NYRA and other tracks in the state, as well as Thoroughbred and harness breeding funds. The remaining 10% is being held by NYCOTB "as a precautionary measure against unforeseen claims or expenses," the NYCOTB wrote to stakeholders last week.

The video streaming deal getting final approval says that the agreement is "in the best interest of each licensed pari-mutuel operator, both individually and collectively" to help ensure each stakeholder "has the ability and authorization" to give its bettors the live Internet coverage.