Suffolk OTB to file for bankruptcy

Suffolk Off-Track Betting Corp. will file for bankruptcy before month's end, close half of its dozen branches and look to repay creditors over 18 months under tentative plans to remain in operation, top OTB officials said Wednesday.

OTB officials detailed the plans before county lawmakers, who held a special noon meeting to give OTB the green light to move forward with bankruptcy. County Executive Steve Levy signed the measure hours later.

"With Chapter 9 reorganization, we'll have the financial tools to do the things we need to do," said Jeff Casale, OTB president.

OTB officials say they expect the bankruptcy process to last six to eight months, during which time they will be protected from making payments to creditors for money owed prior to the filing. While in bankruptcy, officials say they also will be allowed to end leases early so they can close branches.

Casale could not say how much OTB owes, but said the agency is lagging payments to creditors and is running 90 days in arrears; in the past, payments were made in 30 days or less. He added that OTB officials have contacted 24 tracks and told them they intend to develop a "catch-up plan" to repay creditors within 18 months.

Officials of the New York Racing Association -- which operates the tracks at Aqueduct, Belmont and Saratoga -- declined to comment last night.

OTB officials say they have laid off eight employees and plan to close the Huntington OTB branch by March 31.

OTB's three most productive branches -- the Racing Forum in Hauppauge, the Sunrise branch in Bay Shore and the Airport branch, near MacArthur Airport -- will remain open, said Casale. But decisions on what five other branches will be closed will be determined both on performance and the proximity to other branches.

Anthony Pancella, OTB vice president, said the agency also plans to increase use of betting machines, known as Qwik Bets, in bars and restaurants. OTB currently has 18 locations, has plans for two more and wants to double the number. It also plan to increase its Internet betting operation, which began a year ago.

Levy, who earlier balked at authorizing an emergency resolution, said he was convinced that the bankruptcy would not hurt the county's bond rating or affect payments Suffolk gets from OTB -- about $1.8 million a year.

"It's hard to envision the younger generation placing bets on the horses as did previous generations because there is so much competition," said Levy. "They are going to have to be very innovative to survive."