05/28/2010 11:00PM

New York OTB allowed to reinstate signals


New York City Off-Track Betting Corporation on Friday afternoon began offering its customers the ability to wager on 17 signals from Thoroughbred tracks that had been previously unavailable after state regulators lifted restrictions on the signals earlier that morning.

The signals included those from some of the most popular racetracks in the U.S., including Churchill Downs, Hollywood Park, and Monmouth Park. The New York State Racing and Wagering Board began prohibiting OTB from offering the signals over the past several weeks because of concerns over New York City OTB's cash-management practices and a contention that the board never approved some of OTB's simulcasting contracts.

New York City OTB filed for bankruptcy earlier this year. In the last month, the company began delaying statutorily required payments to the New York Racing Association and other racetracks in the state for wagers placed on simulcast races by making the payments in a 90-day cycle instead of a 30-day cycle. Racetracks and breeding organizations in the state have criticized the policy change.

Ira Block, the general counsel for New York City OTB, said that OTB officials had issued assurances to the board that the company was meeting its financial obligations in an effort to get the restrictions lifted. However, Block would not provide details about those assurances, which came in a letter sent to the board on Wednesday.

"It provided a mechanism for the board to have assurances that we would be in a position to make the payments that are required," Block said. When asked if New York City OTB had made any modifications to its cash-management policy to provide payments on the 90-day cycle adopted last month, Block said, "Not substantially, no."

John Sabini, the chairman of the racing and wagering board, said that the board granted the approvals after New York City OTB agreed to put the money owed to the racing industry on out-of-state signals into an escrow account that the board will monitor. However, the money will not be paid out on a different schedule, Sabini said, because of federal labor laws that require New York City OTB to have a specific amount of cash on hand in order to fund employee obligations while in bankruptcy, Sabini said.

"They're making a good-faith effort to put the money in the escrow account, and we can watch it from there," Sabini said. "That gives us some comfort. I think we made our point.

The restrictions had limited New York City OTB to offering the signals from Belmont Park, Finger Lakes, and Golden Gate Fields for the past week.

Block said the restrictions had had a negative impact on wagering at New York City OTB's parlors and through its account-wagering operation, though he declined to provide specifics. He also said that the OTB did not believe that customers of the organization had migrated to other companies that would have been able to offer wagering on a wider variety of signals during the blackout.

"It seemed to have a negative effect throughout the state," Block said.

According to figures provided by an industry official who has access to handle numbers, wagering by New York City OTB customers on the Belmont Park signal was lower on five of the last six racing days when compared to the same days last year. However, the dates are not exactly comparable because last year the Memorial Day weekend fell a week earlier on the calendar. Wagering figures are typically higher on Memorial Day weekend because of the quality of racing offered at Belmont.

However, the figures show that wagering was down a total of 5.8 percent during the last week of the blackout on Belmont's races, indicating at least that bettors at New York City OTB did not focus more of their wagering dollars on the local signal in the absence of out-of-state signals. The average handle by New York City OTB customers during the period on Belmont Park was approximately $982,000 a day this year, compared to $1.04 million a day during the same period last year, according to the figures.

The other signals that were restored on Friday included Calder Race Course, Indiana Downs, Thistledown, River Downs, Prairie Meadows, Chester Casino and Racetrack, Delaware Park, Fort Erie, Suffolk, Presque Isle, Pocono Downs, Woodbine, Mohawk, Arlington Park, and Colonial Downs.