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Sunday, November 28, 2010

Black Monday

Hope everyone had a fun and safe holiday weekend!

On the top of the agenda for Monday's special session of the New York State Legislature is this:

enacting a plan to provide for adequate savings and implementation of other measures to allow for the continued operation of the New York City Off-Track Betting Corporation;
The apparent lame duck Senate Democratic Majority will need all of their 32 members present in order to pass any legislation without unlikely help from the Republicans, and it's unclear if that will be the case, or if some will instead brood over their impending descent into the minority. It's also unclear what legislation will be taken up at all. "I think anything we take up should have a sense of urgency to it," [Assembly Minority Leader Brian Kolb] said. [] So, in an attempt to make sure the lawmakers sense urgency on the matter, OTB president Greg Rayburn roused state capital reporters from their Sunday off with a teleconference to emphasize the fact that NYC OTB will close in December should the bill fail. And with dire consequences.
Rayburn warned that closure would put the state on the hook for roughly half a billion in employee medical benefits and pension costs. In addition to the job losses directly resulting from a shutdown, the ripple effects from the loss of business to the racing industry would have ripple effects around the state and elsewhere. Rayburn said the total number of lost jobs could range from 40,000 to 70,000. [Capitol Confidential]
I've detailed the harness horsemen's objections to the plan. Their argument seems to have caught the ear of at least one influential legislator.
Assembly Racing and Wagering Committee chairman Gary Pretlow said the latest threat to close OTB is likely more real than past claims--including only a year ago by the former NYCOTB chairman. He said he has a number of concerns about the bill and what he called its "extraneous items," such as reducing the number of race dates at Monticello racetrack.
“What happened is because Rayburn wanted unanimity on everything (from the creditors committee), people stuck their noses in to benefit themselves at the expense of other entities," said Pretlow, who believes some of the concerns can be addressed by amending the Paterson-proposed bill. []
That last statement may be a reference to Jeff Gural, the owner of Tioga and Vernon Downs who is on the creditors committee by virtue of being the landlord of several buildings that lease space to OTB. The harness horsemen filed a formal objection to the plan in Bankruptcy Court last week.
They are asking state lawmakers to hold off on approving the governor’s proposed OTB bailout, which he calls “bordering on scandalous.”

[Standardbred Owners Association of New York president Joe Faraldo] said OTB owes Yonkers Raceway $22 million, 52 percent of which belongs to the horsemen. At Monticello Casino and Raceway, he said OTB owes $7 million, half of which is owed to the horsemen. But, in both cases, he said the raceways traded off the entire debt with OTB for an interest in an advanced deposit wagering system.

He also said under the governor’s plan, Monticello’s racing dates would be cut by 30 percent, and that “stinks to high heaven,” said Faraldo. [Mid-Hudson News]
As I've noted, the thoroughbred horsemen, with slots revenue (presumably still) on the way, are willing to take the hit and support OTB's plan.

A lot is at stake here, and the racing industry in this state will not be quite the same, no matter the result. Should the bill not be passed, the fallout will being immediately. Unlike Sandy Frucher's ultimately empty closure threat, I don't think these guys are joking around.
Closure notices will start going out Nov. 30 to the nearly 1,000 OTB employees, Schwartz said, if the legislature does not approve the bailout plan during the Nov. 29 special session. []

1 Comment:

jk said...

I think this is the fork in the road. If Albany punts (again) NYC OTB will shut down. Will the tail wag the dog once again?