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Wednesday, September 02, 2009

As Easy As Bank-Rupt-Cy

I'm reading about this bankruptcy deal for New York City OTB....

The move will allow OTB officials to sharply reduce staffing at the money-losing bookmaker and break at least some of the leases now in place for the operation of underused OTB parlors, according to the sources.

The bankruptcy will also permit OTB to break its existing contract with District Council 37, the large public employees union, and begin using state-of-the-art remote and automated betting systems that require little, if any, supervision. [NY Post]
....and I'm thinking.....that's all it took to finally bring about the kind of changes, as painful as those affecting employment may be, that we've all known for years are long overdue (and which OTB officials fought tooth and nail in Comptroller Tom DiNapoli's recent report)? Just a little bankruptcy filing? Why didn't someone think of this sooner?

Bloomberg reports that this will be a Chapter 9 filing for Municipal Bankruptcy.
The filing, the first involving a New York State-run gambling operation, won’t halt operations. It will include the planned sale of $250 million of bonds to repay some accumulated debts and allow spending on new technology, said Meyer Frucher, whom Paterson appointed to develop a rescue plan.

With updated technology, “We could go head to head with pornography and win,” Frucher said, referring to possibilities such as an around-the-clock horse-racing channel or virtual racing. [Bloomberg]
Hmmmm.....porn or the 8th at Flemington.... I know which one Handride would pick.

Frucher used the strategy of investing in new technology as CEO of a struggling Philadelphia Stock Exchange around the turn of the century, and ended up selling the exchange to NASDAQ for over $650 million in 2007. So he does have some experience with this sort of situation. He also seems to get it. When's the last time you heard an OTB chairman say things like: "Other states have them working together....Here we have a system that competes with itself. It was bad from the start." [Thoroughbred Times]
"There is no reason, candidly, to have seven totes, more than seven totes. Every track has its own tote. Every OTB has its own...it’s done seven times and it has to be done identical."

"It really comes down to a bit of redundancy. I mean, how many presidents of OTBs do you want to pay for?" [Daily Politics]
One thing that I think you can bet will be going is that fleet of cars which was a subject of DiNapoli's report. The New York Times reports today that the costs of maintaining that fleet has cost OTB far more than just the gasoline.
Part of OTB’s payroll reads more Nascar than Triple Crown. It has employed three automotive mechanics, seven drivers and a motor vehicle supervisor, who, combined, earned $500,000 a year. In addition to those salaries, the state comptroller found that gas, insurance and outside repairs cost $585,000 a year.

Though much of its fleet has aged, OTB bought four new Ford Explorers in 2007. One went to its in-house lobbyist. That came as OTB hired Park Strategies, a lobbying firm founded by former Senator Alfonse M. D’Amato, under a no-bid contract for $12,000 a month, a move also criticized by the comptroller. [New York Times]

4 Comments:

Anonymous said...

You mean there won't be four employees manning the one window at my local OTB restaurant on a tuesday anymore, how will I survive?

And there might be more than two automated machines in a place that sometimes has more than one hundred folks gambling on a Saturday afternoon, of course with the exact same four employees and one window open with 15mtp of the weeks big race?

I'll believe it when I see it.

Anonymous said...

So now your favorite horse owner Jess Jackson indicates the Woodward may be the final 2009 start for Rachel, I have defended him from the start but if this is the case then I will completely jump on your bandwagon and campaign against her for HOY.

Anonymous said...

Looks like NYCOTB finally coming to a head. Charlie Hayward and the NYRA gang appear like vultures circling their prey! It does make all the sense in the world for the NYRA and OTB to work together, but how does the State of New York receive the most benefit from this combination? I'm not sure it's as easy as just flipping the NYRA the keys and saying "have at it." NYCOTB is still a municipal organization, so either it is privitized and sold to the highest bidder, or enough administrative oversight is retained in order to keep a watchful eye on the NYRA or any other racetrack operators that would like to control nearly $1 billion in wagers! Who wouldn't?

Handride said...

PORN!!!!!