Legislation Would Transfer NYCOTB Operations

Bill would move all wagering accounts of largest OTB system to state panel.

Legislation introduced April 2 would permit a New York state government panel to take over the operations of the New York City Off-Track Betting Corp. if it shuts down.

The bill, by Assembly racing committee chairman Gary Pretlow, would require NYCOTB to transfer all its wagering accounts, including telephone and internet wagering, to the state panel that oversees the finances of the New York Racing Association. The panel would then be permitted to enter into a management deal with NYRA to run those NYCOTB wagering operations.

Finally, the bill would expand the financial review powers of the Non-Profit Racing Association Oversight Board beyond NYRA to also include the NYCOTB. The panel, now headed by Robert Megna, who is Gov. David Paterson’s budget director, has sweeping powers to approve such things as contracts and certain spending.

The Blood-Horse last week reported on a plan by Assembly Democrats to permit NYRA to assume NYCOTB’s Internet and phone wagering business.

It was a plan dismissed April 1 by Paterson. On a radio interview, Paterson poked at NYRA, saying it has “not demonstrated any wizardry in financial management.” Referring to the lost revenues for NYCOTB, he said permitting NYRA to assume those wagering account businesses from NYCOTB “is really, in a sense, shutting it down.”

“We have a different plan. It hasn’t been worked out,” Paterson said on WOR radio. “It may go under,” he added of NYCOTB’s future.

Noting the state’s fiscal plight, which has Albany facing a $9.2 billion deficit, Paterson said of some calls to provide a bailout of NYCOTB: “Right now, the state is in no position to help anyone.”

NYCOTB officials say the entity will run out of cash April 11, and has sent layoff notices to 1,300 workers that it will shut down at the close of business that day. Sources close to the negotiations say NYCOTB is also planning to ask a federal judge overseeing its federal bankruptcy reorganization case to let it defer certain statutory payments to entities like racetracks to be able to stay open beyond April 11.

The bill introduced by Pretlow, as of now, has not yet been picked up in the Senate.

It is uncertain how the oversight board could operate NYCOTB – or if it would contract the business to another entity, such as NYRA -- if Pretlow’s bill passes and NYCOTB goes out of business. Pretlow could not be reached for comment.

The legislation says the oversight board could take over the operations if NYCOTB is terminated as an entity, or “declines to operate” unless it is the result of “strikes, acts of God or other unavoidable causes.”

The bill also would require NYRA and NYCOTB to “jointly negotiate all simulcasting contracts” with out of state entities. And it bans any current or former director or officer of the OTB from serving on the government oversight panel.

The state took over the money-losing NYCOTB in 2008 following a threat by New York City Mayor Michael Bloomberg that he would shut down the nation’s largest off-track betting group.

The Assembly has rejected a plan by NYCOTB to let it change how it distributes revenues to various entities, such as tracks and the state, and to close dozens of betting parlors and build five big entertainment centers to replace them. The Assembly has also rejected a plan to let the OTB place unstaffed betting kiosks around the city, such as in bars. NYCOTB also wants to borrow $250 million.