City OTB poised to shut down without bailout

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ALBANY - The New York City Off-Track Betting Corp. will shut down Friday unless the State Senate joins the Assembly in adopting a bailout plan, officials said Tuesday.

In letters to union leaders and Mayor Michael Bloomberg, OTB chief of staff Sylvia Hamer said the agency "will have exhausted all unrestricted funds available to continue its operations beyond" Friday without passage of the rescue plan.

She said 1,034 employees would be laid off and betting parlors closed throughout the city.

The Senate adjourned a special session Monday night and has no plans to return to the Capitol immediately. Austin Shafran, a spokesman for the Democratic majority, said that approving the bailout was "not a decision that government should rush." He added senators needed time to examine the proposal, which they received late Monday, a contention disputed by Gov. David A. Paterson.

The shutdown warning was at least the third in five years. NYC OTB, owned by the state, hopes to emerge from bankruptcy. Its demise could imperil horse racing at many tracks, including Belmont Park.

The Assembly, in an 83-46 vote Tuesday, backed a bailout bill that frees OTB from making payments to harness tracks and from certain wage benefits for employees. Its telephone and Internet betting operations would be transferred to the tracks and the New York Racing Association.

Of the 21-member Long Island delegation, only Michelle Schimel (D-Great Neck) and Earlene Hooper (D-Hempstead) endorsed the measure. Ginny Fields (D-Oakdale) and Thomas McKevitt (R-East Meadow) didn't vote.

Nassau and Suffolk OTBs fought the bill, saying they too need help. They pushed for aid for all OTBs.

"The Nassau and Suffolk OTBs tell us legislators that they face a similar situation as New York City OTB - in having to close branches and lay off people," said James Conte (R-Huntington Station).

Dean Murray (R-East Patchogue) added it would be better for New York State to adopt a holistic approach instead of a piecemeal one. "We have an opportunity to help the regional OTBs before they get into trouble," he said in the debate.

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Asked about postponing the NYC OTB rescue so others could be included, Paterson said it was foolhardy and would increase the debts of NYC OTB. He said he would consider bailout proposals from OTBs in Nassau, Suffolk and elsewhere if they agreed to more state oversight.

On closing this year's $315-million budget deficit, neither Governor-elect Andrew Cuomo nor Paterson expects lawmakers to act before Dec. 31 - the main objective of Monday's special session.

Cuomo said, "The state government has once again failed to perform, and that's what has to change next year."

Paterson told Newsday he couldn't act unilaterally to stanch the red ink because he had already eliminated too many jobs at state agencies. He blasted lawmakers as "a bunch of people who have already been more known for their indecisiveness than anything they ever did."

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