NEWS

Industry News

Most Popular Stories

Most E-mailed Stories

New York off-track betting officials respond to audit report

Posted: Friday, May 21, 2010 7:53 PM

by Paul Post
 
Several of New York’s regional off-track betting entities are calling for state lawmakers to take immediate action on a comptroller’s audit report released on Thursday.

The study urges legislators to remedy a variety of problems affecting New York’s financially troubled off-track betting system, including inflated payments to harness tracks to unfair competition from out-of-state account deposit wagering companies such as YouBet.com Inc. and HorseRacing TV.

State Comptroller Thomas DiNapoli’s audit said handle at the five off-track betting outlets outside of New York City declined $103-million or roughly 10% from 2004 to ‘09.

“Extensive cost-cutting by OTBs can yield only so much benefit,” the presidents of Capital, Catskill, Suffolk, and Western Off-Track Betting said in a joint statement. “Without a dramatic overhaul of the current distribution formulas by the state legislature, the financial viability of these OTBs, as well as their ability to support local government, may be in jeopardy.”

The audit and a January 2010 report by the state Task Force on the Future of Off-Track Betting also called for closer cooperation between the OTBs, urging them to consolidate services such as marketing, tote contract, television system and account wagering platforms. In addition, DiNapoli said all OTBs should try to expand Internet wagering, which has more growth potential than traditional betting shops.

“Three regions, Capital, Nassau and Suffolk, already offer online wagering to their customers,” Suffolk OTB President Jeffrey A. Casale said. “Catskill and Western will offer such services in the near future, and all five regions are exploring a group internet wagering platform.”

Capital OTB has converted some branches to self-service locations while Catskill and Western have closed three branches and Suffolk two. All four regions have reduced hours at several branches.

However, the outlets never will by profitable until the state changes the level of statutory payments the companies are required to give racetracks, state, and local government, the statement said.

“Given the significant amount of upfront payments the corporations must make to the racing industry and government and the extent to which these payments reduce operating revenues, we believe that the corporations will be unable to cut expenses fast enough to continue as financially viable entities if no action is taken to reduce these required payments,” the audit said.

Paul Post is a New York-based Thoroughbred Times correspondent