New York City OTB

New York City OTB

Courtesy NYCOTB

NY Senate Walks; NYCOTB May Shut Down

State leaders failed to pass a plan Nov. 29 to reorganize New York City OTB.

A plan to reorganize the money-losing New York City Off-Track Betting Corp. failed to pass the state legislature Nov. 29—a move aides to the governor said will force its shutdown in the coming month.

The state Senate left town without considering the bill, which saw growing opposition in recent days from some racetracks, other OTB corporations, and horsemen’s groups. Lawmakers said threats to close NYCOTB—which officials said would cost thousands of jobs in the industry—have come and gone before over the past couple years.

But Larry Schwartz, NYCOTB chairman and chief of staff to Gov. David Paterson, reiterated his threat shortly before the Senate left without considering the bill that the corporation will run out of money in the coming weeks and can’t remain open. Schwartz said pink slips to NYCOTB employees will have to be issued without final passage of the reorganization plan.

The Assembly approved the legislation on an 83-46 vote Nov. 30, though it can't become law without the Senate’s approval. The Senate left town, though there was some talk of coming back to Albany in mid-December to take up a number of unresolved issues.

Aseembly Speaker Sheldon Silver said his chamber was set to pass the NYCOTB reorganization bill Nov. 29-30. He said the bill will be waiting for the Senate to consider if members return to the statehouse in December.

"The Senate says they will come back. I believe they should come back," Silver said.

Silver said the NYCOTB bill "avoids state obligations in the future by doing it now." He said it also calls for several hundred layoffs but preserves about 700 current NYCOTB jobs.

"Absent that, basically the place just closes," Silver said.

But some intrigue developed at about 4 a.m. EST Nov. 30 when the NYCOTB bill, which was on the Assembly floor for a vote, was suddenly pulled off the agenda. Sources said there were not enough Democrats from the majority on the floor at the time to get the measure passed.

In the Senate, the governor failed to be convincing, lawmakers said, with his threat to shut down NYCOTB. Senate Republican Leader Dean Skelos said regional OTB corporations would be hurt by the reorganization plan, which he said would affect local taxpayers. (OTB revenue is shared with local governments.)

"I don't believe there's a need to do it right now," Skelos said.

Austin Shafran, a spokesman for Senate Democrats, said there is too much money and too many jobs at stake for a rushed decision. “Once again however, the governor did not provide lawmakers with enough information to act in a timely fashion," he said. "Throughout the day (Nov. 29) the Senate received changing versions of a reorganization bill, and late (in the day) members still had not received a final version to fully study the fiscal impacts of the legislation and the consequences for the industry."

Shafran said the Senate is ready to be "a partner" but that there has to be a "thorough and deliberative process" undertaken by the governor.

The proposal calls for cuts in statutory payments to racetracks, but makesNYCOTB’s Chapter 9 racetrack creditors in the state, including the New York Racing Association, part of a new corporation to assume the corporation's advance deposit wagering operations. It also expands free-play programs at racinos and gives NYCOTB the authority to negotiate out-of-state simulcasting deals on behalf of all New York tracks.

The measure that died in the Senate also permits the New York Racing Network—the consortium of New York tracks taking over the ADW operation—to take over control of NYCOTB if it defaults by failing to meet commission payment schedules or failing to have a balanced budget.

Lawmakers bristled at the plan, and called it a bailout for a state-owned entity that New York City government turned over several years ago because of its money-losing ways.

“I don’t think it’s a bailout plan,” Paterson said before the Senate left town without taking up the bill. He said “everybody takes a haircut in this plan. The tracks take it, the unions take it. Everybody has to reduce their consumption to make the plan work.”

If NYCOTB shuts down, the state would be on the hook, Paterson said, for $100 million to creditors, as well as another $500 million in accrued pension and health care employee benefit obligations.