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Cash-strapped New York City Off Track Betting Corp. may have to answer to a newly created government agency designed to oversee its spending.
Last week, the state Senate passed a bill in committee that would create a new Franchise Oversight Board, which would oversee OTB’s policies, capital and operating plans, simulcasting and budget. OTB operates nearly 70 betting parlors across the five boroughs.
State Sen. Joseph Addabbo Jr. (D-Howard Beach), a member of the Senate Racing, Gaming and Wagering Committee, said the oversight board would have the authority to approve or disapprove many of OTB’s functions.
“This legislation amends the racing, pari-mutuel and breeding law to provide that NYC OTB shall transfer all wagering accounts to the new oversight board,” Addabbo said. “In addition, this proposal would prohibit the appointment of any former or current OTB member to the oversight board.”
NYC OTB was created in 1970 by the state as a quasi-government agency. It is run like a private enterprise, but is legally required to turn over a portion of its earnings to the state, as well as horse racing tracks, which have long complained that OTB cuts into their revenue.
While OTB flourished in the city in the 1970’s and 80’s, its popularity has waned in recent years.
In December, the agency filed for Chapter 9 bankruptcy protection, and said it was on pace to run out of money by March.
OTB later asked the state for $300 million in tax-free municipal bonds to finance its turnaround, a request that was denied.
In April, OTB laid off 35 non-union employees in an effort to cut costs. The agency said the layoffs help cut about $2 million.
Addabbo said that the days of “writing them a blank check financially” to continue operating are over.
“I think they’ll be treated similar to the MTA, we’ll try to help them to an extent, but we also want to see how they’re operating financially,” he said, adding that OTB has operated with little oversight in the past.
“We don’t want to be wasting money,” he said. “With this oversight board, the state can look at how they are operating and make recommendations if necessary on how they can operate more efficiently. And we can say that if they don’t comply, then future financial assistance may be in jeopardy.”
A spokesman for OTB said the agency would not be able to comment on the legislation at this time.
Under the provisions of the bill, a public bidding process would be undertaken to award the ability to conduct and manage account wagering to a third party.
Any fee derived from such management would be dedicated to pay off any outstanding obligations or liabilities on the part of OTB.
OTB would also be required to retain a unionized workforce pursuant to collective bargaining agreements.
Addabbo said the oversight board could be created and appointed by the end of this year, once the bill passes both the Senate and Assembly, and that the new agency would add a “much-needed” oversight to the OTB and increase revenues to the state.
“This is a win-win situation for both taxpayers and the racing industry in New York state.”
6 years ago
