Nassau Regional Off Track Betting Corp. has paid Nassau County $5 million in profits from nearly 600 dedicated video lottery terminals at Aqueduct Racetrack in Queens, but Nassau's fiscal control board expressed concern that OTB's payment timeline could contribute to a shortfall in the county budget.
OTB paid Nassau $5 million on Aug. 15 and agency officials said they plan to make same-sized payments on Nov. 15, Feb. 15, and May 15.
OTB General Counsel Arthur Walsh laid out the payment schedule to Nassau County Attorney Jared Kasschau in a June 21 letter. Walsh said the money will be paid subject to OTB, "finalizing its accounting records and calculation of profitability” for VLTs earmarked for Nassau OTB at Resorts World Casino at Aqueduct.
However, officials from the county’s fiscal control board and comptroller's office warned the final payment in May would be too late to count as 2019 revenue. Nassau has budgeted $20 million from Nassau OTB in this year's budget.
“The fourth quarterly payment will be remitted to the County on or before May 15, 2020, which is too late for it to be recognized as revenue in 2019,” NIFA officials said in a midyear report published in August.
How much Nassau is owed, and when the money is due, flummoxed county officials as they made budget projections for VLT profits over the past two years.
Nassau has received $3 million in VLT profits for each of the past three years under terms of a letter OTB sent to the county and its control board, the Nassau Interim Finance Authority, in 2016. The annual payment was to escalate to $20 million by 2019, according to the letter.
But the county has received less than its budgeted amount in the past.
Last year, Nassau County budgeted $15.8 million but received only $3 million from OTB, resulting in a $12.8 million shortfall in the 2018 budget. OTB said Nassau was due only $3 million that year because the number of terminals dedicated to Nassau at Aqueduct had yet to reach 1,000 authorized under state law. In April, Nassau OTB got a boost in revenue from Genting New York LLC, which operates Resorts World, and began receiving a flat $25 million a year, regardless of the number of terminals designated to Nassau OTB.
"Even with this payment, OTB still owes Nassau at least $10 million this year and has missed millions of dollars’ worth of payments in 2018, representing a major risk to the County’s financial health," Nassau Comptroller Jack Schnirman said. "We will continue to monitor this situation closely,”
Joseph Cairo, OTB president and chairman of the Nassau Republican Party, said, “I think it’s a win-win because at times like this when local governments are seeking revenues that don’t impose on taxpayers … we are giving the county $20 million that is not tax revenue.”
County spokeswoman Christine Geed said in a statement, "Nassau was pleased to get the first quarterly payment of $5 million and looks forward to receiving future payments on the agreed upon schedule. Nassau County had very productive discussions with OTB. We are confident that OTB will meet the County’s quarterly payment requirements.”
Officials of Suffolk County Regional Off-Track Betting Corp., which filed for bankruptcy in 2011, said they expect to pay off creditors by June 30, about three months earlier than projected. The agency then will be able to contribute about $25 million annually to Suffolk County government, up from this year’s estimated payment of $3.5 million, OTB said.
With Rachelle Blidner