by Paul Post

New York City Off-Track Betting has closed two more shops as it heads toward a possible June 16 shutdown.

The cash-strapped organization already has submitted a closure plan to New York City Mayor Michael Bloomberg, and layoff notices went out in early May to its approximately 1,500 workers.

The shutdown date is three weeks from Memorial Day, May 26, and a closure would send shockwaves through the racing industry because of the potential for lost revenues.

“Our 1,500 employees are getting extremely nervous,” said Dan Wray, New York City OTB’s director for legislative affairs. “It’s time to fix the largest gambling organization in the state. If we do close, all the tracks, horses, and breeders are going to be hurting.”

New York City OTB gives the New York Racing Association about $57-million per year. Last year alone, it gave $5.8-million to the New York Breeding and Development Fund, about 40% of its annual budget.

The most recent OTB closings were at 17 John St. in Manhattan, near the World Trade Center site, and in downtown Brooklyn. Both shops were closed about two weeks ago. In late winter, two other shops in Queens and Staten Island were closed.

Wray said there were no job losses related to the closings. Employees were transferred elsewhere. Both shops that closed this month were doing nearly $6-million worth of business per year.

“We were trying to save money on leases and some on expenses,” he said.

The closings leave New York City OTB with about 60 shops and three teletheaters. The firm has profits of about $125-million per year, but state-mandated payouts to the racing industry and government exceed profits by about $10-million.

New York City OTB’s fiscal year ends June 30, but Wray said the entity expects to run out of money by the tentative shutdown date.

“We’re fairly certain we’re going to be in the minus column by then,” he said. “We’re not looking for a bailout, a large check like NYRA or the harness tracks. We just want the business model changed. The mayor wants OTB fixed. He doesn’t want a band-aid, a bailout, a loan.”

Bloomberg has pledged not to subsidize OTB with city taxpayer money, in effect leaving the state to solve OTB’s fiscal problems.

Twice this spring, about 1,000 OTB workers rallied at the capital in Albany, New York, where state leaders pledged to avert a shutdown. On April 15, Governor David Paterson, Senate Majority Leader Joseph L. Bruno (R-Brunswick), and Assembly Speaker Sheldon Silver (D-Manhattan) announced jointly that they were directing staff to work with Bloomberg and New York City OTB to craft a solution that would allow OTB to keep operating.

That was five weeks ago and nothing has happened, Wray said.

Previously, Bruno proposed letting OTB delay monthly payments to the state—$1-million each for April and May. This would have allowed OTB to keep operating into summer when revenues are expected to increase, especially during the lucrative Saratoga Race Course meet from July 23 to September 1.

“That never went anywhere,” Wray said.

 “We continue to have discussions with the governor's office, the Assembly, and the city and are making every effort to resolve this issue,” said Scott Reif, a spokesman for Bruno.

Paterson’s staff was not immediately available for comment.

New York City OTB is one of six separate regional Off Track Betting corporations in the state.

Paul Post is a New York-based Thoroughbred Times correspondent