NYCOTB Asks For Help From Tracks, State

The state-owned entity is under federal bankruptcy protection

With talks to avoid a shut-down of its operations so far stalled, New York City Off-Track Betting Corp. has floated a plan to state officials to permit it to withhold certain payments to tracks and others to remain solvent the next three months.

NYCOTB, a state-owned entity that is under federal bankruptcy reorganization protection, is threatening a March 31 closure, which government and industry officials say could harm the operations of tracks and other OTBs across the state.
OTB Chairman Meyer Frucher said March 12 he has asked the Legislature to approve an interim plan to let the OTB delay statutory payments—which would include fees it makes to tracks and the state—for up to three months while negotiations continue at the Capitol for a long-term solution.
“Our employees are caught in a very vulnerable position, and they are our top concern,’’ Frucher said of the more than 1,000 OTB workers, whose jobs would be protected during the three-month period if the payment delays are approved.
An estimated amount for the payment delays was not immediately available.
The proposal comes as Senate Racing Chairman Eric Adams, a Brooklyn Democrat, has called an emergency meeting for March 15 in Albany with the leaders of all the state’s off-track betting corporations. Adams said he wants to impress upon the group that NYCOTB’s insolvency would hurt all stakeholders, including the other OTBs.
“Everybody is tied to New York City OTB, whether they like it or not. If New York City goes under, everybody is going to feel it,’’ Adams said.
The NYCOTB plan for a timeout for some of its legal payments while talks continue would need legislative approval. The three-month breathing room plan would stretch until the end of June—which is about when the Legislature’s 2010 session is due to come to an end.
NYCOTB has run into fierce resistance, especially in the Assembly, with its long-term restructuring plan, which off-track officials say is necessary to keep the entity alive. The New York City government, threatening to shut it down at the time, unloaded the money-losing operation two years ago to the state.
Officials at NYCOTB say its business model, as dictated by law, is broken. Frucher has proposed a controversial plan to change the method by which the OTB’s statutory payments are distributed—a proposal that the New York Racing Association and others say would permit NYCOTB to stop making needed payments to them.
Frucher also wants to shut down a number of betting parlors, and open five, large entertainment betting centers in each of the boroughs and to permit betting kiosks in places like bars and restaurants. His plan also includes a $250 million borrowing component.
“The entire plan is bad. Other than that, it’s great,’’ said Assembly Racing Committee Chairman Gary Pretlow, a Westchester County Democrat.
Pretlow said NYCOTB’s long-term distribution formula change “would be the downfall for racing because tracks wouldn’t get anything.’’
Pretlow said the Assembly will not back such an expansion of gambling as Frucher calls for with the kiosks, and questioned how it would get out of more than four dozen leases for space now rented as betting parlors.
Adams, however, said he could be open to the kiosks, and noted that the state lottery games would be sold in far more places in New York than under the NYCOTB kiosk proposal.
The debate over NYCOTB’s future came as three regional OTBs announced March 12 that they had entered in an agreement to begin a number of cooperative ventures, including a common Web site for bettors and merger of tote operations. It is uncertain how many of the ideas pushed by the heads of Capital, Suffolk, and Western OTBs would need legislative approval.
The three OTB presidents called on others, including NYCOTB, to join its push for a more cooperative off-track betting industry in the state.
The OTB leaders called for creation of what they called a statewide Racing Council. The agreement the three OTB corporations signed call for either a single statewide tote operator or better communication between existing tote companies to expand betting options, a statewide television racing station and internet broadcast signal, and a cooperative marketing program between the OTBs. It also envisions an upstate and downstate phone wagering center to merge the current duplicative efforts across the OTB regions.