Regional OTBs need better odds

Jeffrey Casale is president of Suffolk Regional Off-Track Betting Corp.

No one associated with the New York racing industry can be happy about the recent closure of the state-owned New York City Off- Track Betting Corp. The negative impact on an industry that has been in distress for many years is obvious. If the city OTB remains closed, it will likely lead to shutdowns across all racing interests in the state.

Unfortunately, following the failure of legislation to provide a "rescue" for the city OTB, finger-pointing, threats of retaliation and media spin have quashed rational discussion of how to solve the problem and prevent further crises in the industry. This is not how government should work.

Some have accused the state's five regional OTBs of trying to tag on to the city rescue bill in Albany at the eleventh hour, causing the defeat of the bill. We were further accused of not having "sacrificed" as those at the city OTB have. Both of these statements are simply not true.

For at least five years, the regional OTBs have sought changes in the outdated statutory payment scheme by which OTBs are required to send millions of dollars to subsidize private tracks in the state. Suffolk OTB sent them $10.3 million from 2006 through 2009, money which should have gone to Suffolk County and its taxpayers - as set out in the state constitution.

All of the OTB regions warned that, without legislative change to lower payments to private tracks, the OTBs would suffer serious financial harm. When the New York City OTB bill was introduced in Albany, it included almost every single change advocated for five years by the regional operations - except that the bill did not extend the reforms in the payment structure to the regional OTBs.

Recognizing the chance to both save the city OTB and prevent crises for the other OTBs, Sen. Andrew Lanza (R-Staten Island), with support from Minority Leader Dean Skelos of Rockville Centre, put forth a bill to extend the reforms being provided to New York City OTB to the regional OTBs as well. It was a refreshing legislative effort to solve problems before they become crises.

And the regional OTBs have tried to head off problems. Suffolk OTB has cut spending in several ways and our budget is at its lowest since 2001. We have cut staffing by 23 percent, from 348 positions to 267, since 2008. Administrative employees have received only one general raise in that time. Employees are now required to contribute to their health coverage - a rarity in the public sector. Corporate vehicles for staff have been eliminated and sold. Suffolk OTB has closed two of 14 branches. We have worked diligently to radically cut liability insurance costs.

The simple fact is that Suffolk OTB employees are doing a lot more work with a lot less, and they have given quite a bit to help keep the organization afloat. The other regional OTBs have made similar cuts.

These OTBs want to avert a crisis like the one New York City OTB faced. If we want the necessary changes in the statutory payment system - changes that were proposed only for the city but are needed throughout the OTB system - then we needed to cut costs, become more efficient and require our staff to sacrifice first. We did our part, but it seems there are those who would rather see another crisis before addressing the onerous payment scheme that OTBs face.

A report issued in May by the state comptroller after an extensive audit of the five non-city OTBs states that all of our efforts will be fruitless unless there are changes to the statutory payment scheme. Sadly, this report has been largely ignored - but it is a public and objective record of the truth behind the spin. It's a worthy read. (See tinyurl.com/3ax853u)

In the past few years, the racing industry has lurched from one emergency to the next, with both the city OTB and the New York Racing Association filing for bankruptcy protection. But name-calling, finger-pointing and misinformation in the debate won't solve anything. We need sitdown sessions guided by the sobering facts. And we need relief from an outdated payment system.