Suffolk OTB decries fee hike for Kentucky Derby

Victor Espinoza rides California Chrome to victory during Victor Espinoza rides California Chrome to victory during the 140th running of the Kentucky Derby horse race at Churchill Downs Saturday, May 3, 2014, in Louisville, Ky. Photo Credit: AP / David J. Phillip

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It looks like it could be red ink by a nose.

Suffolk Off-Track Betting lost money or just broke even on Saturday's Kentucky Derby, because of a sudden increase in fees charged to televise the race, Phil Nolan, president of Suffolk OTB, told lawmakers Thursday.

Typically, the race spurs one of the biggest moneymaking days for the county's off-track betting locations, Nolan said.

The county took in $2 million in total bets -- the handle. But the contract offered just more than a week before the race by Churchill Downs Inc. demanded an average of a 65 percent increase over the previous year's contract on wagers, Nolan said.

"They took any money and made us marginal," Nolan said.

Nassau got the same rate increase, but Nassau OTB president Joe Cairo said Thursday it was too soon to know how race day shook out. But total wagers were down about 5 1/2 percent. "With the increase in rates, it has an effect," he said. He said the Kentucky Derby historically has been one of the biggest days of the year for Nassau OTB.

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Churchill Downs Inc., which owns the Kentucky Derby, declined to comment on details of contracts, said John Asher, vice president of racing communications with Churchill Downs Race Track.

Suffolk's OTB has been losing millions of dollars a year and is currently in bankruptcy. It is hoping that planned video lottery terminals will help it break out of bankruptcy. It is currently in negotiations to purchase a site to operate the terminals.

Nolan told Suffolk lawmakers that the criticism of the OTB -- "that it is the only bookie in town that loses money" -- is unfair. The new Kentucky Derby contract is emblematic of costs the OTB can't control, he said.

Nolan called the new contract presented to the New York bookmakers a "sneak attack."

Suffolk considered not taking bets on the Kentucky Derby but decided against it.

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"If there's one race in America people know the name of, that's it," Nolan said. "You can't be in our business and not have the race available."

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