The agreement with state legislative leaders was hammered out in the shadow of a Sunday deadline for shutting down the bookmaking operation. Mayor Michael Bloomberg had imposed the deadline, saying he would no longer subsidize a gambling operation that lost millions of dollars a year.
Bloomberg said late Friday that the city still intended to close OTB on Sunday unless "substantial legal and economic issues" are resolved.
"It is very disappointing that these concerns have not been addressed. Without a settlement of these outstanding issues, we will have no choice but to go forward with our plan to close the City's OTB parlors on Sunday. We hold out hope that a satisfactory solution can be reached," said Bloomberg. "I want to reiterate the City's position: We will fight to prevent gambling operations in the City unless they provide a public benefit to the City. Every other locality that has OTBs receives a benefit from them - and our legislative representatives in Albany should ensure we do as well."
Paterson said that if the city's OTB operations were shut down, it would have a "devastating impact," throw 1,500 people out of work and affect the horse racing industry all around the state.
As the news spread at an OTB parlor in midtown after Paterson's announcement, Tamu Siobis said he was happy to have a place to bet in the future - even though he had just lost $80 on wagers.
"If they closed, I would have written a letter to the government saying it's better to stay open. I come here and I forget my problems." He may still have to write that letter.
OTB operates more than 60 branches throughout the city where gamblers gather to bet on the day's races.
The organization takes in about $1 billion annually in bets but has been struggling for years. Bloomberg said he didn't want to spend scarce city resources to keep a "bookie" operation in business.
Paterson said he was also "mindful of the state taking on financial risks" in a shaky economy. But he said he was confident the state could make the betting operation profitable.
Plans call for moving the city OTB's headquarters from Times Square to the Aqueduct race track in Queens, which Paterson's office said would save $5 million per year in rent. The state also expects to save money by eliminating overlapping functions of the city OTB, five OTB branches around the state and the New York Racing Association.
OTBs were created in 1970 to generate public money and to thwart private bookies.
Off-track betting technically makes a profit, but it is mandated by law to hand over so much of its money to the state that it runs a deficit.
Between 1997 and 2001, the city received an average of $11 million from OTB. That number fell to just $1 million in 2002, and the city got no money in 2003 and 2005, according to a report by the city comptroller.
Last year, the city OTB reported a $13 million shortfall. Its directors, appointed by Bloomberg, voted in February to close the enterprise down.
