09/18/2005 11:00PM

N.Y. board hesitant to allow rebates despite report recommending them


The New York State Racing and Wagering Board has no immediate plans to approve requests by the New York Racing Association and two offtrack betting companies to offer rebates to their account-wagering customers, despite a recent report from a monitor that oversaw NYRA's operations that "strongly" recommended the board approve the rebate program.

The report, submitted by Getnick and Getnick, a law firm appointed as monitor by a federal court as part of a deferred prosecution agreement with NYRA, said the rebate program would be a way for NYRA to compete with unregulated account-wagering companies. Earlier this year, NYRA cut off many unregulated account-wagering companies that offer rebates.

Dan Toomey, a spokesman for the racing and wagering board, said on Friday that "NYRA is only one of the many entities that the racing and wagering board regulates," and said that the board is still collecting input on the programs from racing interests in the state.

"There are diverse opinions . . . about whether cash rebating is something that should be allowed," Toomey said, reading a prepared statement. "Accordingly, the racing and wagering board is reviewing the best course of action."

NYRA filed its request for the board to approve the program on May 6, after outlining the program to racing and wagering board officials in February. The program would offer rebates to customers of NYRA's telephone betting operation, starting at 1 percent of handle for small bettors and running to as much as 7 percent on super-exotic wagers for people betting $6 million or more a year.

NYRA president Charles Hayward said Monday that he last discussed the plan with the racing and wagering board in late July, and that NYRA was hoping to schedule a meeting on the issue with the board on Monday, Sept. 26.

"The board has said they are still investigating the issues," Hayward said. "I'm hoping we can get a better indication of where they are on Monday."

Capital Off-Track Betting Corp. and Nassau Off-Track Betting Corp. - two of the six regional offtrack betting companies in the state - filed similar requests on May 6 to start rebate programs.

The rebate programs could potentially threaten account-wagering operations run by other New York offtrack betting companies. New York's racing law prohibits any company other than NYRA or the six state-owned OTB's from taking bets over the telephone from state residents, so the seven companies all compete for the same customers.

Though other offtrack betting companies in New York said they had not issued formal objections to the plans, officials at New York City OTB Corp. and Suffolk OTB Corp. said that they were concerned that rebating in general by New York bet-takers would cut into their revenue streams.

Anthony Appollaro, the president of Suffolk OTB, said that New York's offtrack betting companies were established in part to provide money to their local communities, and that rebating might run counter to the company's mandate.

"We can't reduce the money we're giving to our municipalities," Appollaro said on Monday. "We have to be careful that we're not just giving money away."

John Van Lindt, the vice president of New York City OTB, the largest offtrack betting company in the U.S., said that his company had conducted an analysis of NYRA's rebate plan shortly after the proposal was filed. He said the analysis showed that unless handle were to increase "substantially," New York City OTB would lose money if the rebate plan were implemented.

"I think it's an issue that has to be explored in depth," Van Lindt said. Although he said that New York City OTB had not issued any formal complaint to the racing and wagering board about the plans, Van Lindt said that rebating by competitors could jeopardize his company's telephone-betting business.

"If NYRA implements it on their telephone betting system, then you would think people would be inclined to seek rebates," Van Lindt said.

Joe Valachi, the director of public affairs for Nassau OTB - one of the companies that asked to be able to offer rebates - said Nassau supported rebating as a way to increase its handle by offering a product that is already widely available to technologically minded bettors.

"We have to keep up with the times," Valachi said. "That means we have to look at technology and what other companies are doing, and try to compete with them."