NEWS
Union calls on state to reopen NYC OTB
Posted: Thursday, January 20, 2011 4:01 PM
by Paul Post
A union representing shuttered New York City Off Track Betting Corp. workers is calling on state lawmakers to pass legislation allowing the bankrupt firm to reopen.
But observers say that might be easier said than done.
Teamsters Local 858 President Barry Yomtov told union members that efforts are ongoing with legislators and Gov. Andrew Cuomo’s office to resolve issues needed for OTB’s reopening. He distributed a pre-printed letter to members on January 10, urging them to send it to their respective state leaders.
OTB closed on December 8, leaving about 1,000 people out of work.
“The closure of New York City OTB has had a devastating effect on them, our state’s economy and the New York state racing industry,” the union’s letter says. “New York City OTB is the backbone for the entire racing industry in New York state and the country. Approximately 50 percent of all the wagering on racing in New York state is done at New York City OTB. The closure … means that the vast majority of its bets will disappear as will the revenue it provides to support those 40,000 (racing industry) jobs. From food service workers at Belmont and Aqueduct race tracks to farmhands at more than a 1,000 farms across upstate New York, family after family is dependent on the revenue stream that New York City OTB provides.”
OTB had been handling about $750-million in wagers annually.
“Lost revenue to NYRA (New York Racing Association), harness tracks, the breeding funds – I don’t think that’s hit home yet,” said John Van Lindt, a former New York State Racing and Wagering Board chairman.
NYRA has captured some of the wagering OTB previously handled, but Van Lindt does not believe it is anywhere near the amount NYRA once got from OTB.
When OTB has handling $1-billion in bets, NYRA got $50-million per year. Even with OTB’s lower handle, NYRA was still supposed to net nearly $40-million per year, although OTB had been withholding payments since last spring.
However, Van Lindt said, “The more time goes by, the less compelling it is for the Legislature to act.”
“You don’t sustain a bankrupt corporation to create jobs,” he added.
In December, senate Republicans refused to pass a bill that would have kept New York City OTB open. Republican senators said the state’s other off-track betting firms should get the same reduction in statutory payments that New York City OTB sought.
“We are willing to work toward a solution that ensures New York City OTB is profitable,” senate Republicans spokesman Scott Reif said. “We’ve reached out to the governor’s office. There’s an attempt to bring everybody together to resolve this.”
In addition to political roadblocks, practical obstacles stand in the way.
“New York City OTB has nothing left to give their creditors,” said Bennett Liebman, a NYRA board member and head of Albany Law School’s Racing and Wagering Law program. “Before early December, they could give their account wagering business to the creditor-tracks. Now there is basically no money left in the accounts, and there would be little reason for the OTB creditors to accept the former resolution.”
Paul Post is a New York-based correspondent for Thoroughbred Times
READER COMMENTS
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Posted by: Tired of the diddle, Richmond, VA on January 22, 2011 at 11:36 PM
Get the thing out of the hands and the politicians, the unions and any and all others who have no fiscal accountability. Bankrupt is bankrupt. This is a great opportunity to make some sense.
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