The board of the bankrupt New York City Off-Track Betting Corporation on Wednesday approved a plan that would allow the company to cease operating at the close of business on Friday, ratcheting up the stakes for legislators who failed earlier in the week to pass a bill containing statutory changes that are fundamental to the corporation's current reorganization plan.
The unanimous vote during an afternoon board meeting came one day after the state-owned corporation announced its intention to implement the Friday closing plan. One day earlier, the state General Assembly had passed a bill containing the statutory changes the company is seeking, but the Senate had already left Albany. After recessing, Senate Republican and Democratic leaders indicated they did not support passing the legislation during a hastily arranged lame-duck session.
The motion adopted by the board included a reference to the Senate's failure to pass the bill, and contained language that said the closure would be averted if the Senate approved the legislation prior to the close of business on Friday.
Following approval of the motion, David Cornstein, a former chairman of the board and a current director, implored the Senate to take up the bill prior to the Friday deadline after admonishing the legislators who failed to approve it before recessing.
Cornstein cited the support of the Thoroughbred industry, Standardbred tracks, and the company's union for the legislation before chastising "the 32 guys and women [in the Senate] who can't get together in one room to support something everyone else has agreed to."
The threat to shutter the company on Friday is the third that the corporation has issued since filing for bankruptcy late in 2009. On the previous occasions, the company backed away from the threats even though legislators took no tangible actions to address the company's problems.
The Senate currently has no plans to reconvene, but it could assemble on a moment's notice to address the legislation, according to Jessica Bassett, a spokesperson for Gov. David Paterson. Paterson has supported the reorganization plan, but his administration has failed to garner enough support from the Senate's Democrats or Republicans as his tenure as governor draws to a close.
On Jan. 1, Paterson will be replaced by governor-elect Andrew Cuomo, and Republicans will take over leadership of the Senate, complicating efforts to get any significant legislation passed prior to 2011.
The effort to pass the bill in the Assembly was led by J. Gary Pretlow, the chairman of the Assembly Committee on Racing and Wagering. Pretlow had earlier expressed reservations about the legislation, but he said on Wednesday that he felt compelled to pass the bill because of concerns about the shutdown related to the layoff of more than 1,000 employees.
"It had to be done because of real concerns over maintaining the jobs, pensions, and benefits of the workers involved," Pretlow. "I had issues with it, and I still have issues, but those issues were not enough to jeopardize those workers' livelihoods."
Under the legislation, New York City OTB's statutory obligations to the Thoroughbred and Standardbred industries would be cut approximately 50 percent in the first two years of the plan's implementation. The cuts would cost the industries at least $30 million a year. Despite those cuts, the Thoroughbred industry has supported the plan, although Standardbred horsemen remain in opposition.
Also under the plan, New York City OTB's account-wagering platform would be transferred to its racetrack creditors to satisfy $65 million in outstanding debt. The New York Racing Association, the operator of Aqueduct, Belmont, and Saratoga, would receive the largest stake in the operation, at 45 percent.