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Plan would put NYRA, harness tracks in charge of New York City OTB

Posted: Monday, August 30, 2010 4:51 PM

by Paul Post

The New York Racing Association and the state’s harness tracks would take over New York City Off-Track Betting Corp.’s phone and Internet account wagering system under a reorganization plan outlined on Friday by New York City OTB President Greg Rayburn.

The tracks would sacrifice $32-million in “give-backs” to the company, which has debts totaling $95-million and owes NYRA—its second-largest creditor—more than $20 million.

New York City OTB is under a hard deadline to get the plan worked out by Tuesday so that it can opt into a state early retirement incentive program. Unions, however, are objecting to key points, such as elimination of Sunday double-time pay, while demanding that a set number of jobs be kept regardless of handle and revenue.

“We’re still talking,” Rayburn said during a conference call. “We’ve had ongoing negotiations with all of the parties.”

If a plan is not agreed upon, New York City OTB has two options—reject existing collective bargaining agreements with unions that almost certainly would trigger litigation, or liquidate the business, which handles more than $750-million worth of wagers per year.

Rayburn said he does not believe NYRA or the state’s five other off-track betting companies would be able to recoup all of the lost income, much of which could head out of state.

“Frankly, liquidating the business is a bad outcome for the racing industry in New York,” Rayburn said. “Massive loss of handle is going to have some downstream effects.”

Under the preferred plan, NYRA and the harness tracks would assume ownership of New York City OTB’s account wagering system on a pro-rated basis, based on the amount of income they generate. The tracks probably would hire an outside gaming company to operate the wagering platform.

Rayburn said New York City OTB’s account wagering system has an estimated value of $20-million, but would satisfy a $65-million debt to the tracks. The difference represents what New York City OTB is able to pay its creditors on the dollar, he said.

NYRA President Charles Hayward declined to comment.

“As a member of the creditors’ committee, NYRA cannot publicly discuss any negotiations or discussions that are taking place among committee members,” he said.

NYRA, however, long has lobbied for a merging of some operations between the tracks and off-track betting entities, which it says would cut costs and eliminate duplication of services. Shared marketing programs and tote contracts also have been suggested.

Paul Post is a New York-based Thoroughbred Times correspondent