A bailout plan to rescue the bankrupt New York City Off-Track Betting Corp. was approved by key players Wednesday, ensuring gamblers can keep placing their bets.
Gov. David Paterson announced the agreement between his administration and a creditor’s committee. The state last year took over the corporation, which operates the city's 68 horse-race wagering parlors.
“This agreement is a tremendous achievement and will help to reassure communities in New York that rely on the horse racing industry,” Paterson said in a statement.
Part of the plan allows $65 million in debt to be wiped out in exchange for the corporation’s creditors, which includes various state racetracks, to take control of its advanced-wagering operation.
But as a result, 500 of the more than 1,300 off-track betting jobs are expected to be lost.
A bankruptcy court judge must still approve the plan.
“This is an agreement that involves shared pain across all of the participants in the process in order to arrive at a viable solution,” Greg Rayburn, CEO of NYC OTB, said in a statement.
NYC OTB filed for Chapter 9 bankruptcy in December after five years of losses worth $45 million. Established in 1970 by legislators as a public-benefit corporation, NYC OTB is required by law to pay a portion of its revenue to New York State, New York City and the horse racing industry.
The legislature increased the annual payment by an average $7.8 million from 2003 to 2005, which only worsened its financial standing, the corporation said.