Suffolk OTB completes purchase of Jake's 58 casino-hotel for $120M
Jake's 58 in Islandia on March 13, 2020. Credit: James Carbone
Suffolk OTB on Thursday announced it had completed a $120 million purchase of Jake's 58 casino and hotel in Islandia, opening a new chapter in the formerly bankrupt agency's foray into electronic gambling, officials said.
OTB bought the 228-room hotel and video-lottery gambling parlor from Delaware North, more than four years after the Buffalo-based entertainment conglomerate opened Long Island's first casino in the former Islandia Marriott Long Island hotel.
OTB officials said they would take out loans to fund the purchase. Delaware North officials confirmed the sale.
Buying the hotel-casino is expected to save Suffolk County Regional Off-Track Betting Corp. about $13 million a year in rental and management fees paid to Delaware North, which had held a 50-year contract to manage the casino for OTB.
In a statement, Suffolk OTB president and chief executive Jim LaCarrubba said there would be a "seamless transition" as OTB takes over the facility.
"Owning and managing Jake’s 58 will allow Suffolk OTB both in the short term and the long term to deliver to our beneficiaries in the state and county," he said. "We are grateful to Delaware North for partnering with us to make Jake’s 58 such a success and for ensuring a smooth transition."
Suffolk OTB's purchase of Jake's 58 comes about a year after it escaped bankruptcy and about two years after OTB and Delaware North filed dueling federal lawsuits against one another. The suits were settled out of court last year.
Suffolk County Executive Steve Bellone on Thursday called the purchase "outrageous" after he had asked the OTB last month to delay the deal pending an independent review of the terms.
"This is not Monopoly money they are playing with," Bellone said in a statement. "This money belongs to the taxpayers of Suffolk County."
But some Suffolk County Legislature leaders said they supported the purchase, noting Jake's 58 had been one of New York's most successful gambling halls since opening in February 2017.
"They’re doing better than anyone else in the state," said Presiding Officer Rob Calarco (D-Patchogue). "I’m not concerned about their ability to pay back the loan."
Minority Leader Kevin McCaffrey (R-Lindenhurst) said OTB might have been better off owning the casino from the beginning, adding the video lottery terminals "have been able to gross more than anybody imagined."
The new manager of Jake's 58 is Michael Bonakdar, a 30-year gambling industry executive who has worked at MGM Grand and Caesars Palace in Las Vegas, OTB officials said.
A lawsuit filed by casino opponents, including a group of Islandia and Ronkonkoma residents, is awaiting a hearing before a federal appeals court judge, said Paul Sabatino, an attorney representing opponents. No date for a hearing has been set, he said.
Carl MacGowan is a Long Island native who covers Brookhaven Town after having previously covered Smithtown, Suffolk County courts and numerous spot news and feature stories over his 20-plus year career at Newsday.
