NYC OTB to Close?

[badcompany]

New York's Off-Track Betting Votes to Close Business (Update2)


By Chris Dolmetsch

Feb. 19 (Bloomberg) -- The board of New York City's Off- Track Betting Corp., the first legal off-site pari-mutuel wagering operation in the U.S., voted today to shut down the business at the urging of Mayor Michael Bloomberg.

Bloomberg, who controls the corporation's five-member board, said in November that the city is facing a $2.7 billion deficit in the coming fiscal year and couldn't afford to inject more money into OTB. He asked Chairman David Cornstein to draft a plan to shut it down.

OTB, which collects more than $1 billion in bets a year, is required by legislative mandates to compensate the racing industry based on gross revenue. In 2006, the business had a $125 million operating profit, yet had to pay the state's racing industry $98 million. City Comptroller William Thompson said OTB might run out of money by June.

``There was ample time, not just weeks or months, but actually years to find a solution to a broken problem, which is horse racing in New York State,'' Cornstein said at the board's monthly meeting today. ``Unfortunately, nothing was done to correct the situation. Instead, the people in Albany decided they were not able to chew gum and walk at the same time.''

Up to Albany

With today's vote, OTB will close in June unless state legislators in Albany come up with a plan to save it. City Councilman David I. Weprin, a Democrat from Queens and chairman of the finance committee, said he has introduced a resolution to change the formula to distribute OTB revenue based on net profit rather than gross profit.

According to the closing plan, operations would stop June 15 and layoffs would be effective the next day. Notices of job cuts would go out April 17. Two parlors, one in Astoria, Queens, and one in the New Dorp section of Staten Island, would close by March 1.

``When people criticize this operation as the only booking operation that does not make money, that is just not true,'' Bloomberg said during the meeting. ``They make money; the problem is, somebody takes away 120 percent of the money that they make.''

OTB was created by a referendum in 1963 to put private illegal bookies out of business and started operation in April 1971. It takes bets at about 70 locations throughout the city and via the Internet and telephone.

About 1,500 workers would lose their jobs in a shutdown of OTB, which has already put a freeze on hiring and salary increases and is limiting overtime in anticipation of closing. Since 2004, the business has cut 14 percent of its workers and closed six branches.

Hope for Settlement

``I've always felt optimistic,'' said Leonard Allen, president of Local 2021 of the American Federation of State, County and Municipal Employees, which represents about 1,300 OTB workers. ``I can't see a billion-dollar business being thrown in the trash. I don't know exactly what the solution's going to be, but I feel like in the 11th hour they will come up with something.''

Today's decision comes as state politicians near agreement on a $105 million plan to bail out the New York Racing Association, which operates thoroughbred horseracing tracks at Aqueduct, Belmont and Saratoga.

[classhandicapper]

I think this is still the "middle game" of the negotiation. There's way too much money on the line for OTB to be closed, but the OTB does at least have to demonstrate a willingness to make cuts.

OTB has already made substantial expense cuts during the last few weeks.

Several branches have been closed on Sundays (saving a lot of money because managers and betting clerks make double time on Sunday).

Branches that were very marginally overstaffed are getting fewer betting clerks and those that were marginally understaffed remain that way.

There are 4 branches in Astoria Queens (Ditmars, Steinway, Broadway/Crescent, Astoria Blvd). Several are fairly close. IMO, the Steinway branch is the one most likely to be closed. I am less familiar with what's going on in Staten Island, but it's probably a slow money losing branch that's being closed.

I am sort of surprised that one of either Manhattan Ave or Graham Ave is not being closed. They are relative close and both are very slow.

[Kelso]

Originally Posted by badcompany

With today's vote, OTB will close in June unless state legislators in Albany come up with a plan to save it. City Councilman David I. Weprin, a Democrat from Queens and chairman of the finance committee, said he has introduced a resolution to change the formula to distribute OTB revenue based on net profit rather than gross profit.

Oh yeah, THIS mental midget knows a lot about business management. Give OTB executives even more incentive to overpay themselves ... and maybe even throw triple-time to the clerks on Sundays.

Dollars to donuts, this moron's plan takes the City's cut out of Gross Profit. Whatever's left goes to the trough swillers, and only what they can't manage to piss away gets to NYRA.

[rokitman]

Double-time for Sunday? SUNDAY? Do they get double-time for Sunday at the Quickie Mart also? The players are paying double-time for that collection of misfits?! Absurd. Wonder why they can't stay in the black.

[richrosa]

Originally Posted by classhandicapper

There are 4 branches in Astoria Queens (Ditmars, Steinway, Broadway/Crescent, Astoria Blvd). Several are fairly close. IMO, the Steinway branch is the one most likely to be closed.

Yikes. I made my first wagers at the Steinway OTB.

[skate]

too much competition.

Along with the High rent area.

[AQUEBUCKS]

6%-8% VIG on winning wagers (if you don't have an account with >/= $300)
It's about time...

The best thing that could have ever happened to Aqueduct. Back in the day it wasn't unusual to get a crowd of 30K plus on a Saturday. Maybe now with the VLT's they can accomodate an around the clock facility, and maybe take action on Harness racing. It is certainly large enough. We'll see.

[mannyberrios]

Sad. Very sad.

[PaceAdvantage]

Originally Posted by AQUEBUCKS

The best thing that could have ever happened to Aqueduct.

I don't think so. How are you going to replace $1 billion in handle? I think given the choice, NYRA would want to see the OTBs remain open. If I'm wrong, somebody explain to me why....

Yes, NYRA gets a much higher percentage of ontrack handle, but $1 billion is $1 billion....

I know the OTBs aren't going to close, but let's say they do. This doesn't mean that everyone is going to rush back to the track. The OTBs are CONVENIENT, especially for folks with day jobs.

If anything, the closing of the OTBs will only serve to push folks FURTHER away, like to the internet, bookies, and off shore, where NYRA will see even LESS (if anything) than they did with OTB.

And besides, NYCOTB isn't going anywhere. You heard it here first....

[phatbastard]

nyra would love to see them open.....with nyra control...maybe then racing could go forward

[rufus999]

I go back to the time when OTB was the only game in town. It was poorly managed from the get go and I have no fond memories of my experience there. Plus the 8 percent vig they wanted on top of the track takeout always stuck in my craw. Today's OTB has turned into a hangout for computer illiterate retirees and nut jobs. I won't miss it.

rufus

Oh, and another thing that bugs me... its now the only place I can see the live simulcast for NY tracks thanks to the current blackout restrictions.

[lsosa54]

Originally Posted by rufus999

Today's OTB has turned into a hangout for computer illiterate retirees and nut jobs.

The one on 7th ave in Manhattan I think is reserved solely for the nut jobs.

[Cratos]

OTB as it is presently run should have never been allowed by New York or any other state. If an OTB system is to operate it should be like the one in Pennsylvania where I understand is run and owned by the racetracks.

OTB in New York was and is a political dumping ground for politicians.

Is an OTB system necessary? That question can be problematic, but it is an excellent opportunity if properly designed and operated to expand the customer base of racing. There are many people who will not and cannot go to the racetrack, but might go to an OTB betting facility if it was made to be more customers' friendly. The changes that can be made to an OTB facility are enormous and yes they will come at a cost, but the increase in attendance should more than offset the cost.

[skate]

Great point.

gracias