NYC OTB bailout vote fails in State Senate

Men watch televised horse racing at an Off Track Betting... — Men watch televised horse racing at an Off Track Betting (OTB) site in New York City. (Dec. 1, 2010) Credit: Getty Images

By JAMES T. MADOREjames.madore@newsday.comDecember 7, 2010

ALBANY - The New York City Off-Track Betting Corp. began shutting down wagering parlors and stopped taking bets over the telephone and Internet last night after a bailout failed in the State Senate.

Lawrence Schwartz, OTB chairman and a top aide to Gov. David A. Paterson, said he expected all operations to cease by midnight. He predicted the closure of harness tracks across the state and possibly no horse racing at Belmont Park next spring without NYC OTB, which took in $840 million in bets last year.

More than 1,000 OTB employees were expected to be out of work.

"We are out of cash," Schwartz said. "We are out of business today because the Senate didn't act."

The bailout needed 32 votes to pass but garnered only 29: all Democrats and two Republicans. There were 21 "no" votes - all Republicans.

Bill passage was made more difficult because six of the 60 senators didn't vote and another four were absent all day.

Minority Leader Dean Skelos (R-Rockville Centre) urged Schwartz to reconsider the shutdown. "Rather than focus on closing down OTB and putting people out of work, Larry Schwartz should keep open negotiations with all parties involved to get a positive result," Skelos said.

Last week, the Assembly narrowly adopted the bailout measure, which frees NYC OTB from making payments to tracks and from certain wage benefits for employees. The telephone and Internet betting operations would be transferred to the tracks and the New York Racing Association.

The Nassau and Suffolk OTBs, along with others, lobbied for similar help, citing financial woes tied to less interest in racing. They backed a bill put forward by Sen. Andrew Lanza (R-Staten Island).

Referring to the Lanza bill, Sen. John Flanagan (R-East Northport) said, "This should be done on the merits or we will be back here again with New York City OTB, Nassau OTB and the others that are having problems."

NYC OTB, which is state-owned, filed for bankruptcy last December. It has lurched from one crisis to another for years, with at least three threatened shutdowns averted at the last minute.

Sen. Kenneth LaValle (R-Port Jefferson) said he couldn't back legislation that aids just NYC OTB. "Suffolk County OTB is in trouble and they are not being represented," he said.

Of Long Island's nine senators, only Craig Johnson of Port Washington and Brian X. Foley of Blue Point, both Democrats, voted "yes." Foley said, "This is about jobs, this does have a statewide impact."

The shutdown of NYC OTB will likely add to this year's $315-million state budget deficit. Schwartz said it would cost "millions of dollars" to shutter the parlors and lay off employees. He also said the state would be responsible for $100 million owed to creditors and $504 million in pension and health benefits for OTB workers.