N.Y. legislature passes bill allowing Catskill OTB to operate in New York City

The New York Assembly and Senate passed a bill just before adjourning Thursday night that will allow Catskill Off-Track Betting Corporation to operate 10 betting parlors in New York City, but it is unclear if Gov. Andrew Cuomo will allow the bill to become law.

If approved, the bill would re-open New York’s five boroughs to offtrack betting less than two years after the New York City Off-Track Betting Corporation went bankrupt, taking 1,000 largely union jobs with it. The bankruptcy resulted in the shuttering of 55 locations in which bettors could place horse racing wagers.

Rich Azzopardi, a spokesman for Cuomo, said Friday morning that Cuomo would need to review the bill before deciding whether to sign it.

“This wasn’t part of a three-way agreement,” Azzopardi said, in reference to the unanimity between the governor’s office and two legislative houses that many times precedes passage of bills in New York.

If Cuomo decides to sign the bill, he would risk upsetting New York City Mayor Michael Bloomberg, whose administration has expressed concerns about re-opening the city to offtrack betting without major changes to state law. New York City OTB largely failed because of an outdated business model that relied far too heavily on bricks-and-mortar locations, and it was further burdened by enormous labor costs.

In addition, Cuomo has said that he wants to include OTB operations in a “major overhaul” of New York’s gambling policy. Giving Catskill the right to re-open OTBs in New York City in advance of the administration’s development of a formal policy for the state would undercut the process.

During its lobbying for the bill, Catskill had the backing of several of New York City’s largest unions. The company said that it would give preference to former NYCOTB employees when staffing the parlors, and lawmakers may have been unwilling to go against the union when voting in support of the bill.

Catskill OTB has aggressively sought approval to open betting parlors in New York at the same time that the New York Racing Association has explored in-roads to the New York City market under a decades-old law giving the association the right to open parlors there with the approval of the city. However, NYRA’s efforts have stalled in the wake of a shakeup of its management over the past few months and the fallout over intense criticism of the association’s management practices, an effort that has been led by Cuomo.

As a result of the criticism, NYRA agreed to dissolve its current 25-member board and replace it with a 17-member board that will be controlled by the state for the next three years. A bill providing for the dissolution and restructuring passed in the Assembly on Tuesday and the Senate on Thursday, and Gov. Cuomo will sign the bill, Azzopardi said.

Under the new structure, Cuomo will receive eight appointments, and the leadership of the Assembly and Senate will receive two appointments each. NYRA will receive the other five appointments.