The head of the embattled New York City Off-Track Betting Corp. has resigned at a time when the betting giant is attempting to create a financial survival plan, sources close to the matter said the evening of June 4.
Meyer “Sandy” Frucher, chairman of NYCOTB, has been on the job less than a year but has created a laundry list of foes at the state Capitol and within the racing industry over his ideas for salvaging the nation’s largest offtrack betting enterprise.
Frucher, appointed last June by Gov. David Paterson to the state-owned entity that handles nearly $1 billion in bets a year, found himself on the outs with top advisers to the governor, as well as legislative leaders, following the recent battle over a financial bailout plan.
Uncertain is who might take over the NYCOTB board. One name floated on an interim basis is Larry Schwartz, who serves as secretary to Paterson. Also being raised is the possibility the New York Racing Association is positioning itself to take over some of the NYCOTB’s more lucrative business, such as phone and Internet wagering, which would position NYRA well into to the future.
The racing industry was thrown into turmoil earlier this spring when Frucher and the NYCOTB board threatened to close the operation, which has been under Chapter 9 federal bankruptcy reorganization protection since last year. Frucher won no allies in state government during the controversy, during which the matter took center stage at the Capitol.
Frucher in an interview at the time insisted he was following by his legal fiduciary responsibilities, and needed to make changes to the money-losing corporation, such as reducing the number of parlors and favoring more sprawling entertainment centers and facilities for automated teller machines.
After asking for a state bailout and bonding authority, NYCOTB suddenly reversed course on its shutdown threat, which left many key lawmakers upset. For some time, NYRA has been interested in taking over NYCOTB’s Internet wagering operations.
Frucher said NYCOTB would work out its financial problems on its own and in bankruptcy court with its major creditors, which include NYRA. It then began delaying more statutory payments to tracks, a move that put it further up against the powerful interests of NYRA, which claims NYCOTB owes it more than $17 million in back payments.
NYCOTB, which employs more than 1,000 employees, was owned by the New York City government until the state stepped forward and took over the entity.
Speculation is rampant. One plan has Frucher putting together his own NYCOTB ownership team to take the betting entity out of bankruptcy.