New York City Off-Track Betting Corp. planned to shut its doors permanently Tuesday night, laying off more than 800 employees, creating a vacuum of wagering opportunities for the racing industry, and putting the state another $600 million in debt, after the state Senate earlier in the day failed to pass a bill that would have brought the company out of bankruptcy.
"Unfortunately this afternoon the New York State Senate chose not to pass the bill passed by the Assembly that would have saved New York City OTB," read a statement on the NYCOTB website. "Therefore, due to a lack of unrestricted funds to continue in business, NYCOTB will be ceasing all parimutuel wagering operations [Tuesday] ... as per our board of directors vote, and will proceed to the orderly winding down of its business affairs."
Three branches -- one each in Brooklyn (West 8th Street), Queens (Forest Hills), and Manhattan (38th Street) -- will remain open through Monday for customers to cash tickets and settle their accounts.
Though the vote was 29-21 in favor of the bill, the legislation needed 32 votes to pass. The same bill had passed the Assembly last week and had the support of Gov. David Paterson as well as several facets of the racing industry, including the New York Racing Association.
The bill would have approved a bankruptcy reorganization plan that would reduce the amount of money New York City OTB had to pay to the racing industry by as much as $30 million over the first two years of the plan. In exchange, NYCOTB's phone and Internet wagering platforms would have been turned over to a new company -- the New York Racing Network -- made up primarily of the tracks in the state who were NYCOTB's largest creditors.
The New York Racing Association, which operates Aqueduct, Belmont, and Saratoga, is OTB's largest creditor, being owed $27.5 million since the company went into bankruptcy in December 2009. In post bankruptcy petition payments, NYCOTB has paid an average of $1.5 million per month to NYRA, though that represents only 50 percent of its statutory obligation.
NYRA officials were unavailable for comment following Tuesday afternoon's Senate vote.
The bill failed to pass in large part because of negative votes from Senate Republicans who floated their own bill that would have extended the same provisions given NYCOTB to all of the state's regional OTBs, none of which are in bankruptcy. That, NYRA officials said in a press release Tuesday morning, would have ultimately led to NYRA having to go into bankruptcy and forcing it to shut down.
With Democrats still in charge of the Senate until Jan. 1, the Republican bill was not put on the floor for a vote, which agitated the bill's sponsor, Staten Island Republican Andrew Lanza.
"The Senate Democratic majority is putting this bill on the floor knowing they don't have the votes for passage, so why then are we voting on this bill?" Lanza said. "For only one reason -- politics. 'Let's stick it to the other side, let's be able to blame them.' I got another piece of legislation -- if you believe this bill is a good bill, then you've got to really love my bill."
Lanza also called on Paterson and NYCOTB chairman Larry Schwartz not to shut OTB down and let negotiations continue until a solution is reached.
"There is no reason for you to pull the plug, no legal reason, no actual reason for that to happen," Lanza said. "That's absolute baloney."
Democratic senators said Tuesday's vote will impact more than just OTB.
"A no vote on this bill lights the wick to a stick of dynamite that will blow up our racing industry," said Sen. Eric Adams (D), who also is chairman of the Racing, Gaming and Wagering Committee.
The state took over control of NYCOTB last year and thus is responsible for $600 million in future pension payments to the now ex-employees of the company.entual closure of their own corporations, and the elimination of Thoroughbred racing in New York State."