OTB Corp. Gets OK to Operate New York Track

Permission has been granted for the first time ever in New York for an off-track betting corporation to run a racetrack. After years of battling industry opposition and eventually paying hundreds of thousands of dollars to make the critics go away, Western Regional Off Track Betting Corp. was given approval by state regulators Feb. 27 to reopen Batavia Downs.

The Standardbred track, which had been the nation's oldest nighttime pari-mutuel harness facility when it closed in 1998, will offer its first of 85 nighttime races July 29. The approval by the state Racing and Wagering Board positions the track to join others in the state that will offer video lottery terminals, probably by the end of the year.

Michael Hoblock, chairman of the state Racing and Wagering Board, said the track was given permission to open in July even though Western OTB has not yet hired required employees, including a track veterinarian and photo-finish workers. He said the track won't open without such licensed personnel, which he expects to be in place by a practice run in early July.

Western OTB officials said they would spend about $6 million between now and opening day on a host of improvements at the track, located in the small city about an hour east of Buffalo.

Hoblock said he does not know if Western OTB can turn around a track that had fallen on such hard financial times over the past decade or so. But he said the significance the OTB corporation running Batavia Downs is that "it's the first move toward OTBs and tracks being on the same page in New York."

The competition between OTBs and tracks over the last 30 years in New York "has been what's kept the industry from truly growing in New York."

Western OTB bought Batavia Downs for $2.5 million four years ago after state regulators shut down the financially ailing track. It was blocked by other racing interests concerned about having to compete with a quasi-government entity critics say helped put Batavia Downs out of business in the first place.

Western OTB hired a small army of well-connected lobbyists to help its cause, and spent hundreds of thousands of dollars to cut deals with tracks to allay their concerns about competition.

Martin Basinait, chief executive officer of Western OTB, said he expects purses will average $20,000 nightly when racing begins this summer. But a year from then, when the VLT program is under way, he expects purses to double. He said he does not expect live racing to make a profit for the corporation, but money will flow with VLTs if state regulators agree to let tracks have a larger cut of revenue.