06/15/2008 11:00PM

Mayor still wants to close New York City OTBs


New York City Mayor Michael Bloomberg is disputing that the city has made a deal for the state to take over New York City Off Track Betting Corporation, directly contradicting an announcement Friday by state legislators and Gov. David Paterson.

In a statement released Friday night, Bloomberg said that issues surrounding the OTB’s operation remain unresolved, and that the city still intended to shut the parlors after Sunday unless it wins concessions from the state.

“The City of New York still has substantial legal and economic issues that need to be settled before the future of off-track betting in the five boroughs is resolved – and it is disappointing that these concerns have not been addressed,” Bloomberg said. “We will fight to prevent gambling operations in the city unless they provide a public benefit to the city.”

The statement indicates at the least that Bloomberg will pressure lawmakers to cut the city in on some of OTB’s revenues in the event of a state takeover, which would need legislative approval. Legislators said Friday that they intend to pass a bill authorizing the takeover on Monday.

A spokesman for the mayor’s office who spoke on the condition of anonymity said Saturday that the state has the legal authority to takeover the OTB company if it passes the legislation but the city would fight to keep a portion of the revenues for the city budget. City and state officials are involved in negotiations over a deal, according to the spokesman.

At issue to the city is the money collected through a surcharge on winning bets, which amounts to approximately $17 to $19 million annually. Late on Friday, legislators said that city officials were lobbying to keep the surcharge revenues even though the state would be responsible for OTB’s operations.

During the Friday announcement, Paterson said that the state “has a deal,” but he conceded that negotiations were continuing on the details. No one from the mayor’s office attended the announcement.

An official close to the negotiations said that the OTB’s board of directors is scheduled to meet Monday morning to discuss the state deal and any progress in negotiations over the weekend. “They’ll decide what course of action to take then,” the official said.

The surcharge revenues have played a complicated role in the negotiations. Bloomberg and members of his administration contend that the OTB will need to be subsidized by city taxpayers because it has become a cash-negative operation – but the city’s own analysis does not account for the money raised by the surcharge. When the surcharge revenues are included, OTB’s operations result in a net gain for the city.

According to NY1 News, Paterson released a statement on Friday night saying that Bloomberg’s objections to the state takeover were “distressing.” The statement said that it makes “no sense for the state to take over responsibility for the operations of NYCOTB – while allowing the city to continue to collect the roughly $18 million it currently receives from NYCOTB.”

Also on Friday, Paterson said that he has appointed State Senator John Sabini, a Democrat from Queens, as chairman of the Senate Racing, Wagering, and Gaming Board, replacing Sen. William Larkin. Sabini said on Friday that the committee would work over the next three months to restructure the state’s OTB system. In New York state, the six regional off-track betting operations are owned by counties. Sabini said that the corporations may be consolidated into one entity as part of the overhaul.

As part of the takeover, Paterson said that New York City OTB’s headquarters may relocate to Aqueduct, the Queens track operated by NYRA. The current headquarters is in high-rent Manhattan.

New York City OTB is the largest bet-taker in the U.S. The company employs 1,500 people and takes in a little more than $1 billion in bets annually, with revenues exceeding $250 million. In the last fiscal year, it contributed $57 million to the New York Racing Association for purses and operating revenues.