NYRA Preparing for Bankruptcy

- The Albany Times-Union today reports that NYRA has engaged noted bankruptcy firm Weil, Gotshal & Manges. One wonders how they have the money even for that. NYRA’s Peter Karches explained that NYRA has taken this step because "we need the state to help us."

The paper is also saying that state officials have “panned” NYRA’s planned land sale; I’m not sure if that means that the sales have been officially denied.

Karches reiterated NYRA’s opposition to an increase in the takeout, saying that an increase of 1% would result in only about $140,000 a month in extra revenues over the Aqueduct meet. But one OTB head sees things a different way.

Ray Casey, president of New York City OTB, said a 1 percentage point increase in takeout could result in $3.5 million for NYRA based on the on-track handle in a year of racing at the three tracks. A bigger tax increase could be meaningful, he said.

I wonder if Casey is taking into account any losses in handle due to bettors around the country no longer being attracted by the lowest rates in the country.

Matt Hegarty reports in the Form of a new study by Friends of NY Racing (FNYR) that points to declining revenue for the state’s OTB. Officials of the various regional OTB’s seized on the report to highlight their plight. The general counsel of NYC OTB said that "you can't keep being required to pay out everything you generate in revenues and miraculously be expected to have leftover money for the city.” And Larry Aaronson, the head of Nassau County OTB said:

Revenue has declined because of higher statutorily required fees to NYRA and the state, combined with the effects of lower takeout rates on NYRA's races as of 2001. OTBs keep the difference between the takeout and the fees, so any reduction in takeout puts a squeeze on the bottom line.

As an example, Aaronson said that Nassau OTB has increased betting at its parlors from $252 million in 2001 to $310 million in 2004. However, Nassau's revenues have fallen 25 percent in the same time period [blah blah]..... [DRF]

OK, that’s enough of that. Cry me a FUCKING river, guys. For one thing, those of you who have been in a NYC OTB parlor know that if Libby Lewis was told that he was facing some hard time in one of them, he’d be singing like a contestant on American Idol about how much of a lying prick Dick Cheney is. And furthermore, in an age in which the industry is moving towards giving money BACK to bettors in the form of rebates, NY State OTB’s continue to take a 5% surcharge on most winnings on bets made at the windows. So do you really think that ANY serious gambler is going to be frequenting OTB’s instead of betting through phone accounts with any number of providers, both legal or otherwise? Perhaps with some habitable parlors with facilities fit for human beings, legal computer wagering, and a progressive program of rewarding bettors instead of taking even more money from them, the handle would be up enough to compensate for increased expenses and lower takeout.

Yeah, I know, it’s the state that has to lead the way to implement these changes. But don’t give me this crap about increasing the takeout for a short-term fix. The entire system of these OTBs needs to be scrapped and redone from scratch. Nassau’s Aaronson said he favored a "regional" approach that would limit competition between NYRA's tracks and the OTB companies. Yeah, and that would protect his high-salaried job too.