Suffolk OTB's fate tied up in budget talks

ALBANY -- With its cash dwindling, Suffolk Regional Off-Track Betting Corp.'s fate is now tied up in negotiations over the New York State budget.

Suffolk OTB wants to file for bankruptcy to protect it from creditors while it reorganizes. But it needs approval from the State Legislature to do so.

The Democrat-led Assembly passed a bill to do just that late Monday, but the measure is on hold in the Senate -- where the Republicans in charge said they would prefer a bill that addresses all the state's OTB agencies rather than a specific one. Republicans have proposed tackling the issue as part of the state budget.

The issue has other complications. Lawmakers acknowledge that the Senate's refusal in 2010 to help New York City OTB file for bankruptcy and avoid a shutdown is hanging like a cloud over Suffolk's request.

Meanwhile, Suffolk OTB has said it might run out of cash in early April, key legislators said.

"Something needs to be done immediately -- because they're not going to survive much longer," said Assemb. Robert Sweeney (D-Lindenhurst), sponsor of the Suffolk OTB bankruptcy bill. "There's 230 people who don't know if they are going to have a job in couple of weeks."

Suffolk OTB spokeswoman Debbie Pfeiffer declined to comment on its cash flow but said: "Everybody seems to be on the same page in understanding the severity of the situation." She added that OTB officials "feel this is going to be resolved soon."

Suffolk OTB has been fighting for survival since March 2011 when it filed for Chapter 9 bankruptcy protection. Churchill Downs -- the venerable Kentucky horse racing track and one of the OTB's creditors -- sued to block that.

In December, a federal judge threw the bankruptcy petition into limbo by ruling that Suffolk OTB inappropriately sought authority from the county legislature, rather than going through the State Legislature and Gov. Andrew M. Cuomo.

In January, Sweeney and Sen. John Flanagan (R-East Northport) introduced a bill to remedy the problem. The Assembly overwhelmingly passed the bill late Monday. The Senate, instead, wants to insert into the state budget provisions that allow OTBs in general to file for bankruptcy. The budget is supposed to be adopted by April 1.

"We prefer a statewide approach," Flanagan said. "Over the course of budget discussions, we are going to be raising this."

Flanagan said the Senate wants to resolve the issue soon.

"We don't want to put them through the wringer," Flanagan said of Suffolk OTB. "We want to allow them to move forward and do what they have to do."

"Since no other OTB has an immediate problem, I would suggest solving Suffolk first, then moving on to the statewide issue" Sweeney said, adding, though, that he favors "anything that resolves this."

Cuomo aides declined to comment Tuesday.

In 2010, Senate Republicans refused to back a bill to allow New York City OTB to reorganize, leading to its shutdown. Then too, they said they preferred a "statewide solution.