02/19/2008 1:00AM

New York OTB approves closing


The board of directors of the New York City Off-Track Betting Corporation on Tuesday approved a plan that would provide for the shutdown of the company's branches beginning in mid-June, according to city officials.

The board approved the plan after being addressed by New York Mayor Michael Bloomberg, who has contended that the city-owned corporation should be closed if it cannot return more money to the city. The plan was prepared by officials of the offtrack betting company in January and, if enacted, would result in the closing of 65 offtrack betting facilities in New York's five boroughs, as well as the company's account-wagering operation.

Whether the plan will be enacted is unclear. OTB officials have been pressing state legislators to amend the racing law to allow the betting company to retain more money from its handle, and many legislators have said they are willing to listen to the company's arguments. In addition, Gov. Eliot Spitzer said on Tuesday that he would work with the the company on possible solutions to its problems.

Bloomberg has contended that OTB will operate at a loss as of June 15, and he has repeatedly cited the company's 2006 operating deficit of $6 million as proof that the city subsidizes the company. The offtrack betting corporation, however, also distributed $17 million to the city in 2006 as a surcharge on winning wagers, net of the loss. The company treats the distribution as an expense on its financial statements.

In a statement released on Tuesday after the vote, Bloomberg said that New York City "has no business subsidizing betting parlors at the expense of city taxpayers, especially at a time when we're asking all agencies to cut their budgets."

Bloomberg first broached the idea of closing New York City Off-Track Betting in November, when legislators were in negotiations with the New York Racing Association over legislation that would extend NYRA's franchise. A bill extending the franchise for 25 years passed last week, but the legislation did not offer any relief to the state's six offtrack betting corporations.

Ray Casey, president of New York City OTB, said on Tuesday that the company will continue to press its case in Albany to retain a higher share of its revenue. It takes in approximately $1 billion in bets each year, and in 2006, the company distributed $97 million to racetracks, owners, and breeders. The company employs 1,500 people.

"We're hoping between now and June that the rules to the game are changed," Casey said.

The New York legislature adjourned on Wednesday but is expected back into session Feb. 25.