NYCOTB Takeover Plan Appears Likely

The state would take control of New York City OTB under a plan discussed June 13.

Negotiators in New York the afternoon of June 13 were putting the final touches on legislation in which the state would take control of the New York City Off-Track Betting Corp., thereby averting a shutdown of the city’s betting operations for the weekend.

A deal could be announced later in the afternoon, though staffs representing Gov. David Paterson, the legislature, and New York Mayor Michael Bloomberg were holding one last negotiating session at the Capitol. Paterson has scheduled a 3 p.m. EDT news conference to discuss the NYCOTB situation.

If the pending deal does not blow up, the state would take over NYCOTB in about 90 days. It also calls for a 1% increase in the pari-mutuel takeout on wagers.

Still uncertain is how much of a current surcharge would be retained by the city. Though it is giving up the NYCOTB, New York City has been making a pitch that it should keep some of the estimated $16 million-$19 million in annual surcharge revenue. State officials have pushed back on that idea, sources said.

Bloomberg has said the city will shut down NYCOTB June 15. He originally pitched for a change in how NYCOTB shares revenue with other entities, including the New York Racing Association, the state, and a Thoroughbred breeding fund. NYRA would have lost $13 million under a proposed plan by Bloomberg.

State negotiators rejected that idea, saying they want to hold harmless any of the entities that now get NYCOTB revenue from bets placed on racing. The takeover plan emerged earlier in the week of June 8 and gained steamed in the last 48 hours when neither side could settle on a solution.

It is unclear what the state’s control of NYCOTB would mean. In the short term, it would mean Paterson would have the authority to replace the corporation’s board, and presumably most if not all of the 200 or so non-union employees. There has also been talk of having NYRA run the operation, giving it access to the NYCOTB telephone account wagering system.

Senate Majority Leader Joseph Bruno said two of the bidders vying to run the long-stalled Aqueduct video lottery terminal casino project also expressed interest in running NYCOTB if the state takes it over. He did not name the bidders.

The Aqueduct VLT project has three groups bidding. They have been going through another vetting process by the state, and Paterson said he expects to have a background report on the entities June 16 from the state Inspector General’s office.