Suffolk OTB refiles for bankruptcy
ALBANY -- Suffolk Regional Off-Track Betting Corp. posted operating losses of about $24 million over the last five years and has more than $10 million in outstanding liabilities, according to documents it filed to reapply for bankruptcy protection.
The troubled gambling enterprise entity said it owes money to more than 200 creditors, including $3.3 million to the state retirement fund, $3 million to the New York Racing Association and $2.8 million to Yonkers Raceway. It also disclosed it is $107,000 in arrears on utility bills.
Suffolk OTB president Jeff Casale, in an affidavit filed in federal court, blamed its woes on the failing economy, stiffer gambling competition, increased payments due to racetracks and some specific Suffolk issues.
"Suffolk OTB faces greater operating costs, particularly increases in the cost of pension plans and postemployment benefits including retiree health care. Cash flow problems are also contributing to Suffolk OTB's financial distress," Casale said. "Suffolk OTB has debts substantially greater than its current ability to repay and is currently not paying its debts as they come due."
Suffolk OTB, which employs 215 people, has been fighting for survival since March 2011, when it filed for Chapter 9 bankruptcy protection. Churchill Downs -- the venerable Kentucky horse racing track and one of OTB's creditors -- sued to block the move.
A federal judge ruled in December that bankruptcy authorization had to come through the State Legislature and Gov. Andrew M. Cuomo first. Lawmakers obliged in March, approving a law specifically granting Suffolk OTB permission to seek bankruptcy.
Suffolk OTB has substantially reduced its operating and administrative costs, its comptroller, Celine M. Gazes, said in a separate affidavit. Those costs shrank from $26.8 million in 2008 to $20.6 million in 2011.
But the losses still accumulated. Suffolk OTB had operating deficits of $5.1 million in 2011, $5.7 million in 2010, $4.9 million in 2009, $4.9 million in 2008 and $3.5 million in 2007, according to Gazes.
Bankruptcy protection from creditors is "essential to salvage" Suffolk OTB, Casale said.
"Moreover, this Chapter 9 case represents a unique opportunity for an environment where Suffolk OTB can execute the changes necessary to transform Suffolk OTB into a successful, cost-effective business operation and position it as a catalyst for revitalization of the entire New York horse racing industry," Casale said.