A day after New York's Senate failed to act on a rescue plan, New York City Off-Track Betting Corp. announced it will close its offices "permanently" at the close of business Friday.
The public benefit corporation created to handle horse racing bets away from tracks says it will lay off about 1,300 employees and close its many betting parlors and teletheaters. Closing OTB and eliminating the revenue from bets that goes to New York's racing industry could threaten many more jobs, according to OTB.
Gov. David Paterson has proposed a broad reorganization of the sprawling gambling operation to modernize and streamline its services. Although the Assembly approved Paterson's plan Tuesday, the Senate has decided it needed more time to consider the complex proposal.
The Senate's Democratic majority adjourned Monday's special session and didn't return Tuesday, as the Assembly did.
Now, OTB is giving official notice to the unions representing its workers that it indends to shut down.
"This action is necessary because (OTB) will have exhausted all unrestricted funds available to continue its operations beyond that date unless circumstances materially change," OTB officials wrote its unions. New York City OTB "plans to permanently shut down all of its work sites, which will result in the layoff of all (OTB) employees represented by your union and these layoffs will be permanent."
"With thousands of jobs and millions of taxpayer dollars at stake, a potential bailout cannot be rushed," said Austin Shafran, spokesman for the Senate's Democratic majority. "If the Senate is going to act and protect the best interests of taxpayers and workers, there must be a thorough and deliberative process for public review and input. We stand ready to be a partner in that process," Shafran said.
The Senate has no scheduled return to Albany.
"Without the passage of the bill we run out of cash very quickly and we will have no alternative but to cease all operations," said Greg Rayburn, CEO of New York City OTB, in a memo to workers.
Rayburn said he still hopes the Senate will pass the measure, "but at the same time we have to plan for the worst."
The state-owned New York City OTB has long handled as much as $1 billion a year in horse racing bets. Yet it's been kept in fiscal crisis by competition from casinos and other gambling operations, OTB's payouts to governments and the horse racing industry, and concern over its management criticized in state audits.