05/20/2010 11:00PM

More signals pulled from New York OTB


The number of racing signals available to customers of the bankrupt New York City Off-Track Betting Corporation dwindled even further on Thursday with an order by state regulators to pull the signal from Hollywood Park, Churchill Downs, and Calder Race Course.

The order from the New York State Racing and Wagering Board reduced New York City OTB's Friday afternoon Thoroughbred menu to two New York tracks, Belmont Park and Finger Lakes - both are required to be carried by law - and Golden Gate Fields. In addition to ordering the signals pulled, the board also told New York City OTB that it would not approve the company's simulcast contract with Monmouth Park, which opens on Saturday.

In a letter sent to New York City OTB on Thursday, the board claimed that it "has no record" of approving simulcasting contracts with the tracks. The letter, which was released to Daily Racing Form after a request by the publication, said the board is "reviewing whether or not sanctions related to the simulcasting activity referenced should be recommended or imposed."

The latest orders by the board followed earlier orders that required New York City OTB to pull the signals from other highly popular Thoroughbred tracks, including Arlington Park and Pimlico Race Course. In addition to accusations that New York City OTB did not receive approvals to offer the tracks, the board notified OTB three weeks ago that it would not approve any other simulcast contracts until OTB "assures us that they are able to meet their financial obligations," according to Joe Mahoney, a spokesman for the board

New York City OTB, which filed for bankruptcy earlier this year, is owned by the state, and it is the largest single source of wagering in the U.S. The orders to limit the company's menu of tracks at its 60-plus OTB parlors and through its account-wagering operation will have significant impacts on both in-state and out-of-state tracks, as well as the financial health of the company.

Most significantly, the orders to pull the signals could drive many customers of New York City OTB to wager more on the signals that are still available, particularly Belmont Park, which is operated by the New York Racing Association. New York City OTB owes NYRA $17 million.

As part of its bankruptcy reorganization, New York City OTB has delayed making statutorily required payments to New York tracks on wagers made by its customers on out-of-state tracks. Regulators have cited that decision in making the case that they are uncertain whether the company is meeting its financial obligations.

Ben Branham, a spokesman for New York City OTB, said that OTB officials are currently discussing the OTB's cash-management policies with board officials.

"No one is saying we aren't going to pay them," Branham said. "These are just deferrals."

The racetracks that were pulled on Thursday afternoon have all been conducting live race meets for at least three weeks, and their signals had been offered by New York City OTB since the meets opened. Asked on Friday why the board did not order the signals to be pulled earlier, Mahoney said that the board "only just yesterday" became aware that the approvals were not granted.

Branham said that staff at New York City OTB had forwarded all of the materials for approval of the contracts to the board by May 14, several weeks after the meets began.

"We're in discussions to resolve these issues as quickly as possible," Branham said. "The customers are the innocent victims here."