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Report casts doubt on future of OTBs amid mounting losses

ALBANY - A decline in interest in horse racing, competition from online gambling, and the state's own explosion of lottery games and casinos has pushed off-track betting to the "risk of insolvency," according to a state comptroller's report.

The decline of off-track betting revenue and its uncertain future impacts taxpayers who benefit from a share of gambling in payments to local counties. Off-track betting also employs 1,200 workers statewide on a payroll of $55.8 million a year, the report stated.

Suffolk County OTB, which is trying to emerge from bankruptcy, and Nassau County OTB are betting their future on a shared video slot machine center which state Comptroller Thomas DiNapoli says is among the best hopes for off-track betting.

Suffolk OTB had the largest percentage decline in "handle," or revenue from bets, from 2009 to 2013 statewide. Suffolk's handle decreased 25 percent, while the statewide average decline was 18.7 percent during those years, to $664.3 million in 2013, the report stated.

The Nassau-Suffolk center with video slot machines the state calls video lottery terminals which is now being planned "will likely provide a significant new revenue stream for the two Long Island OTBs as they continue to see less revenue from horse wagering," the report stated.

Earlier this week, however, the head of Nassau's financial control board and some county lawmakers were skeptical that the video slots center can boost revenue by $20 million in 2016 as planned by County Executive Edward Mangano.

Statewide, nine of these gambling centers, called racinos when they are located at race tracks, have kept OTBs afloat in years of decline since off-track betting was created in New York in 1970s. That first OTB operation, in New York City, closed in 2010 after filing for bankruptcy after years of losses.

The average betting handle dropped 5 percent annually from 2009 to 2013. But the benefit that local governments depend upon in their budgets dropped 12.8 percent during the same time. The decline has cost local governments millions in revenue.

As for options, the report notes Kentucky in 2013 closed its off-track betting facilities after they failed to run at a profit and New Jersey operates its off-tracking betting through a private sector gaming operator with some success at sports bars and race tracks.

The New York State Gaming Commission in its report in 2010 found similar concerns, saying handle at off-track betting facilities statewide has declined since at least 2004.

There are OTB operations in the Albany area, Catskill and Western New York in addition to Nassau and Suffolk counties. Each is operated separately under political appointees made by the counties the OTBs serve.



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