A number of groups, including the New York Racing Association, have approached state officials about taking over all or part of the New York City Off-Track Betting Corp.
“We’re moving at warp speed,’’ NYCOTB Chairman Larry Schwartz said of a process to reorganize the money-losing operation in its seven-month-old Chapter 9 bankruptcy case.
Schwartz, who is also the chief of staff to New York Gov. David Paterson, said NYRA and others have expressed possible interest in taking over the NYCOTB’s betting platform or managing betting branches.
“I believe the only way New York City OTB survives is if somebody takes it over or we create a partnership,’’ Schwartz said.
The new OTB chairman said a number of top officials at the agency, which has been owned by the state for a couple of years, have been let go. They are also getting rid of OTB’s controversial fleet of cars as well as several consulting contracts, and are actively planning the closure of at least 11 betting parlors.
“The things we said… should have been done a year ago have begun," Schwartz said.
NYRA in the past has expressed interest in getting a piece of t NYCOTB’s betting operations, and there has long been talk about the various OTBs in the state merging with NYCOTB.
“It can’t be any longer 'let’s talk about it, meet about it.’ And then everybody gets into a turf battle. I’m not going there. I’m determined, on behalf of the governor, to solve this problem before he leaves office,’’ Schwartz said. Paterson’s term ends Dec. 31.
Besides NYRA, Schwartz said some OTB agencies and harness tracks have discussed having a possible role or stake in NYCOTB. He did not name them. He said he was doubtful there could be enough administrative- or legislative-approved savings to permit OTB to remain as a stand-alone corporation.
“The corporation is in bankruptcy, and we’re not going to get out of bankruptcy unless we restructure and reorganize the organization,’’ the OTB chairman said. “Part of that is reducing costs, eliminating inefficiencies.’’ He said at least 11 branches will close within the next one to four months; how far the workforce will be cut to save money is uncertain.
“Everything is on the table,’’ Schwartz said of an OTB reorganization plan. He added, “So, if you want to be part of the solution you’ve got to get on the same path. We’re not interested in having prolonged discussions.’’
Greg Rayburn, the new president of NYCOTB, said the first task during his first week on the job has been to deal with the corporation’s immediate cash-flow problems. “In my line of work, cash is oxygen. I need to maximize the oxygen so we can be viable long-term,’’ said Rayburn, a corporate reorganization expert whose most recent stint was at Magna Entertainment Corp.
Rayburn said that has meant some high-level terminations at the agency over the past week and making plans to close “negative cash flow’’ branches.
“The company is living on borrowed time,’’ Rayburn said of the cash-flow crunch affecting its bottom line. He said it is uncertain where OTB is headed--whether it will be privatized or face some sort of cooperative deal with NYRA or other OTBs in the state. But he said it will take the backing of its bankruptcy creditors, the unions that represent its 1,000 or so workers, and the legislature.
“Before we go out and start negotiating a plan and a vision, we have to do everything we can on the internal things we can control,’’ Rayburn said.
Rayburn was appointed to what state officials say will be a temporary job overseeing NYCOTB's restructuring. He is making $125,000 a month.
