OTB Back On Track

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After weeks of on-again, off-again doom for Off Track Betting (OTB) in New York City, both Governor David Paterson and Mayor Michael Bloomberg have announced a deal which will keep the betting parlors open but have them run by the state.
Bloomberg had long insisted that Sunday, June 15 was OTB’s last day in the city, “period, end of story.”
However, at the press conference on Tuesday, June 10, he suggested, “If the state wants to take it over, fine, happy to let them do it.” Two days later, published reports held out hope that a deal was imminent.
On Thursday, June 12, Assembly Speaker Sheldon Silver emerged from a meeting with Paterson and Senate Majority Leader Joe Bruno and reportedly said that a deal which could guarantee the city “a minimum amount of OTB profits” could be reached “before the end of the week.” A source close to Paterson described “real progress” in negotiations.
Friday the 13th looked to be the lucky day for the city’s nearly 1,500 OTB workers, when Paterson announced that there was an agreement to keep the operation going. Standing with him, state legislators took credit for finally reaching an accord, which, Paterson insisted was not “a tentative agreement.”
“We are pleased to have played a key role in partnering with Governor Paterson, Mayor Bloomberg and the Assembly to craft a solution that keeps New York City OTB open and viable,” Bruno said.
Silver said, “There is simply no way that we could let New York City OTB shut down,” in a clear acknowledgement of the annual $1.1 billion it produced for the state.
The chairs of the Assembly and Senate committees which oversee racing in the state had praise for the agreement as did union leaders.
Paterson dismissed the fact that the mayor’s office was not represented at the announcement. “There are no horses here, there’s no one from OTB,” he pointed out. “We have an agreement, and we’re working out a few of the details,” Paterson said.
However, within hours, Bloomberg issued a terse statement.
“The City of New York still has substantial legal and economic issues that need to be settled before the future of off-track betting in the five boroughs is resolved - and it is very disappointing that these concerns have not been addressed.”
Bloomberg then declared, “Without a settlement of these outstanding issues, we will have no choice but to go forward with our plan to close the city’s OTB parlors on Sunday.
The “detail” boiled down to money. “We will fight to prevent gambling operations in the city unless they provide a public benefit to the city. Every other locality that has OTBs receives a benefit from them - and our legislative representatives in Albany should ensure we do as well,” Bloomberg declared.
Almost immediately, the governor’s office fired back.
“It makes no sense for the state to take over responsibility for the operations of New York City OTB and the $201 million of outstanding liabilities on OTB’s books, while allowing the city to continue to collect the roughly $18 million it currently receives from New York City OTB,” a Paterson spokesperson declared.
Saturday brought an admission from Paterson that he should have said the financial issues had yet to be worked out. But he expressed surprise at the mayor’s objections, saying he thought the state was doing the city a favor.
OTB parlors in the city opened on Sunday, June 15, for what may very well have been the last time, until a statement from Bloomberg’s office was released at 6:24 p.m. - announcing that the deal was made, less than two hours before their last closing time.
On Monday, June 16, OTB locations opened anew, as the Senate and Assembly passed legislation to create a new state public benefit corporation - the Empire State Off-Track Betting Corporation - to operate them.
The city will still receive payments relating to tracks within the city, which last year resulted in approximately $4.25 million. In addition, a three-year broadcast agreement will bring in $3.25 million annually, for the use of city channels 71 and 73 to air races.
The agreement also raises the “take out” on winning bets by 1 percent, to 21 percent, which will raise a projected $9 million to pay for the new deal.