1,300 OTB Workers Get a Reprieve

Gambling parlor operator rescinds shutdown order, delays layoffs

By MICHAEL GORMLEY
|  Saturday, Apr 17, 2010  |  Updated 4:30 PM EDT
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1,300 OTB Workers Get a Reprieve

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More than 1,000 OTB workers will still have jobs Monday.

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Off-Track Betting Corp.'s 1,300 workers will have jobs Monday under an emergency plan announced Saturday, but cuts are planned as the gambling parlor operator seeks a long-term solution to its fiscal crisis.

The city OTB will seek a permanent fiscal plan in cooperation with the racing industry, the New York Racing Association that runs thoroughbred tracks, the unions, the harness tracks and state government, said OTB Chairman Meyer "Sandy" Frucher.

The nation's largest OTB had been scheduled to shut down Sunday, following a week in which its board failed to negotiate a deal with the unions, Gov. David Paterson and the state Legislature.

That would have included reduced payments to harness tracks and some state cash that would have come from payments by a vendor eventually chosen to install video slot machines at Aqueduct race track in Queens.

Now, OTB officials say they can stay in operation by managing its cash flow to juggle bills, and delay some payments to the racing industry to meet payroll and other costs.

"They cried poverty one week and the next week they say they can keep their doors open for another year?" said Austin Shafran, spokesman for the state Senate's Democratic majority. "This demonstrates an overwhelming need for an honest and clear accounting of OTB's finances and operations before any taxpayer dollars spent."

The plan announced Saturday is scheduled to last one year, pending a long-term plan suitable to OTB's creditors in U.S. Bankruptcy Court, the industry and state government, under which the OTB operates.

The OTB takes $1 billion in bets annually and is considered important to the racing industry, especially in New York where racetracks and breeders employ tens of thousands of workers statewide.

Once a city government entity, the OTB is in bankruptcy court to reorganize its finances. It is supposed to return millions of dollars each year to the state and racing industry but has lost $45 million in the past five years, according to the agency. The corporation has been threatening to close since 2008 and has experienced decades of financial troubles.

Frucher, however, said that on Monday action will begin to close some of the traditional betting parlors and reduce the significant work force. They handled bets at the many OTB sites throughout the city in what some consider an outdated business model compared with more high-technology approaches that require fewer workers.

Frucher said the interim plan includes:

—Cutting costs "severely" and increasing efficiency through the reduction by two-thirds of the traditional "brick-and-mortar operations." That will include reducing its fleet of vehicles, "deep cuts in management," and a reduction in the work force.

—Paying what OTB considers market rates to tracks for taking bets on their races.

—Deferring payments to the industry, which could mean deferrals of payments to out-of-state tracks first.

Frucher said he still needs Albany to act.

"We need only one piece of immediate, interim legislation, which is necessary to protect our hardworking employees while accomplishing our goal legislation authorizing early retirement incentives for our employees, at no cost to the state or the taxpayer, to facilitate head count reduction while converting to a technology-based model," he said.

He said the interim plan is the result of a request by Paterson to find an administrative plan that could avoid the shutdown and layoffs.

OTB plans to submit a new budget and operational plan to the state Racing and Wagering Board within two weeks. The board regulates racing in New York.

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