Levy balks at OTB bankruptcy resolution

County Executive Steve Levy has balked at allowing the Suffolk County Legislature to consider an emergency resolution Tuesday permitting Suffolk Off-Track Betting Corp. to file for bankruptcy, saying he needed time to determine the effect on county finances.

Levy declined to issue a certificate of necessity -- the authorization that would have let lawmakers vote on an emergency resolution without having to go through committee.

"This a major step and I want to make sure we do our due diligence," Levy said after an hourlong meeting with OTB officials, including president Jeff Casale. Deborah Pfeiffer, an OTB spokeswoman, said the agency would provide Levy with any information he needed.

Levy said OTB officials expressed concern that the state Racing and Wagering board might pull their license to carry video of races, a move that could severely damage operations. But Levy called their worries "unrealistic" because the board has never taken such action before.

Joseph Mahoney, a Racing and Wagering spokesman, declined to react to Levy's comments, but said, "Our monitoring is ongoing and our team is in touch with [OTB] people every day."

Without emergency action Tuesday, an OTB resolution will not come up for a vote until March 22, if it is voted out of committee.

The three-member OTB board two weeks ago voted to authorize top officials to file for bankruptcy, but the county legislature must also authorize the action. State sources and New York Racing Association say OTB has debt of $750,000 to $1 million.

Officials say the snowy winter, along with a slow economy, a diminishing pool of bettors, the rise of Internet betting and heavy payments to tracks and breeders have led to the current cash crunch. Suffolk OTB's annual betting handle - the total number of bets waged - has dropped a dramatic $50 million over the last five years to $139 million last year.

Levy spokesman Mark Smith said Levy is concerned about the bankruptcy's impact on the county bond rating and revenues the county receives from OTB. But Richard Tortora, Suffolk's financial adviser, said an OTB bankruptcy would be "inconsequential" to Suffolk's credit rating."OTB is a separate and distinct entity and the county is not liable for any of OTB's debt," Tortora said. He noted that annual revenue from OTB is small - some $2 million in a $2.6 billion budget.