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More control of OTB a wise bet

Suffolk OTB plans to purchase the Jake's 58

Suffolk OTB plans to purchase the Jake's 58 casino in Islandia. Credit: James Carbone

When public authorities and governmental agencies operate well, and when they don't, taxpayers should have someone to congratulate or blame.

On Long Island, they often don't. If we want transparency and accountability from our quasi-county agencies, county executives must have some say in their leadership. That’s the broader issue in the argument initiated by Suffolk County Executive Steve Bellone over the future of Jake’s 58 casino, operated by the Suffolk Off-Track Betting authority.

Suffolk OTB wants to buy out the remaining 46 years on Delaware North's casino management contract as well as its ownership of the casino and hotel. The OTB wants to borrow $120 million to do so and run the operation itself.

OTB currently pays Delaware North $13 million a year to operate the casino, where the wildly profitable machines are throwing off more than $15 million a month, even at the half-capacity mandated by COVID-19.

Based on those numbers, OTB management gets kudos for nailing down a reasonable purchase price. The number was agreed on in a settlement over accusations Delaware North was taking financial advantage of OTB by paying itself for free hotel rooms players did not want or need.

But Bellone wants to put on the brakes. He argued in a letter to the county legislature that because revenue flows to the county from OTB's profits and "Suffolk OTB intends to amass $120 million in new debt as part of a plan that has not been subject to public review and scrutiny," a gaming consultant should study the deal. However, other than making a request to OTB and the legislature, Bellone has no power to stop the deal and OTB officials say time constraints in the settlement won’t allow such a delay.

The controversy is partly due to outmoded state laws as well as the long-standing grudge between Bellone and county Democratic Party Chairman Richard Schaffer, who largely controls the appointment of OTB board members, just as he does at the county's community college, water authority and other agencies because his party has the legislative majority.

That structure is a holdover from the days before legislatures, when Nassau and Suffolk counties were run by boards of town supervisors, and it needs to be changed by state legislation.

In Nassau, where the system is largely the same, Joseph Cairo, the county Republican chairman who works the county legislature's levers and pulleys, is himself the OTB president. But in both counties it's the county executives who live and die with the finances of OTBs, and who have the strongest incentives to ensure good management of the community colleges and other public entities and limit the patronage and pork that are a party leader's most vital currency.

County executives should choose the candidates, and thus be accountable for their operations, while the legislatures should vote to confirm them as part of their oversight, so they all can share the praise or blame when those entities soar or falter.

— The editorial board