NYS takes over city's OTB

NY state takes over city's Off-Track Betting operations
June 16, 2008 2:32:09 PM PDT
Off-Track Betting parlors opened for business Monday after Gov. David Paterson and Mayor Michael Bloomberg negotiated down to the wire to save the financially troubled bookmaking operation. "I'm thrilled about it," said Gabriel Yudman, who was taking wagers at an OTB branch in Manhattan's garment district. "It's my livelihood."

Like the other 1,500 OTB workers, Yudman, who is 80 and has worked at OTB since it opened in 1971, wasn't sure he still had a job until the deal was announced Sunday.

Bettors watching races on a dozen televisions said they were glad he did.

"I'm happy for the people who work here because some of them are really nice," said Ralph Esposito, of Floral Park, on Long Island, who walked over from his job at a nearby bank to place his bets.

Full-time betting clerks at OTB earn from $33,000 to $38,503 a year.

Lillian Roberts, executive director of District Council 37 of the American Federation of State, County and Municipal Employees, their union, said the uncertainty the workers went through over the weekend "is something no public servant should ever have to experience."

Under the agreement, a newly formed state corporation will take over financial responsibilities for OTB while the city continues to receive part of a surcharge related to wagers placed on races at tracks within city limits, which last year amounted to $4.25 million.

Bloomberg had feared that the costs of financing OTB would outweigh the city's revenue next year, which would have forced the city to use taxpayers' money to keep the 68 parlors open.

"This is a very good deal economically for the city," Bloomberg said Monday. "We're out of the gambling business. ... We don't have to put cash in, which was what was going to happen by the end of this year."

Paterson credited a good relationship with Bloomberg with getting the deal done. He said the weekend discussions were over "money details."

Under the agreement, the city will continue to broadcast horse races on behalf of OTB for three years on two television channels, and OTB will pay the city $3.25 million per year. After the three years, the city and state will negotiate the possible continuation of the broadcast agreement.

The Off-Track Betting Corp. technically made a profit but it was legally obligated to hand over so much money to the state that it ran a deficit. OTB takes in about $1 billion a year in bets but has been struggling for years.

Between 1997 and 2001, the city received an average of $11 million a year from OTB. That number fell to $1 million in 2002, and the city got no money in 2003 and 2005, a report by the city comptroller said.