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Suffolk OTB, Jake's 58 owners, settle suit over casino's operation

A packed parking lot at Jake's 58 in

A packed parking lot at Jake's 58 in Islandia on March 13, 2020. Credit: James Carbone

Suffolk OTB and the operator of Jake's 58 video lottery casino in Islandia said Monday they settled their legal differences and will continue running the successful betting operation together.

In a joint statement released by Delaware North, the casino's Buffalo-based owner, officials said they have "agreed to resolve their disputes," but did not disclose details. The casino has been closed since March because of the coronavirus pandemic.

Suffolk Regional Off-Track Betting Corp. sued Delaware North in federal bankruptcy court last October, alleging the entertainment conglomerate had used Jake's 58 — a hotel and casino on the Long Island Expressway North Service Road — as a "piggy bank" and "slush fund," paying itself inflated sums out of OTB accounts at the expense of Suffolk taxpayers.

Delaware North countersued in November, accusing OTB of contriving "false claims" in an attempt to terminate the firm's contract to manage the casino.

Monday's statement said the parties "have taken the steps necessary to move forward."

"Working together with Delaware North, we have built one of the most successful casinos in New York State," Suffolk OTB President Phil Nolan said, in a statement included in the news release.

" … This agreement allows us to move forward together and add to that record of success. We now look forward to welcoming back our hundreds of thousands of loyal customers, and we will continue to work together with Delaware North and state and local health officials to make sure Jake’s 58 is ready to reopen as soon as we receive the green light to do so.”

Before the pandemic, Jake's 58 was among the most successful video lottery casinos in the state, grossing more than $6 billion for Suffolk OTB and Delaware North since it opened in February 2017. Suffolk OTB filed for bankruptcy in 2011 and owes an estimated $15 million to creditors.

Income from the casino is distributed to numerous beneficiaries, including the state public education fund, the horse racing industry, the Village of Islandia — which is due to receive $47 million over 20 years from Delaware North — and OTB creditors. OTB furloughed most of its 300 workers in May because of closures forced by the pandemic. 

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