NY OTB TASK FORCE: Productive suggestions -- Van Lindt on ATR tonight

[Kasept]

Below is the press release from the NY OTB Task Force that appears to actually have worked hard and thought seriously before issuing recommendations. Some really positive suggestions if they can be acted upon...

Also below is Matt Hegarty's DRF piece that outlines NYC OTB's latest hollow threat to close...



OTB TASK FORCE: NY MUST OVERHAUL OFF TRACK BETTING NOW

The Task Force on the Future of Off-Track Betting today called for a
sweeping overhaul in the way New York State's six regional OTB
corporations operate and urged state lawmakers to require them to
centralize tote systems, account wagering services and simulcasting and
marketing efforts.

The Task Force also urged the Legislature to amend state Racing Law to
require out-of-state advance deposit wagering operators that accept
wagers from New Yorkers to be licensed by the state Racing and Wagering
Board.

In its 197-page, data-packed report, the Task Force also recommended
that:

** OTBs consolidate their marketing and business functions in order to
provide a more efficient and cohesive approach that will benefit all
pari-mutuel stakeholders.

** Out-of-state betting concerns be required to pay the same regulatory
fees, Breeder contribution fees and host fees on each wager accepted
from New York as the New York-based OTB companies.

** The streamlining of management positions throughout the OTB network
in order to cut overhead from a system that currently spends more than
$10 million per year for total executive compensation.

** Set the stage for having the tracks earn a higher rate for their
simulcast signals exported to out of state entities by setting a single
rate for what all OTBs - those in-state as well as out of state -- pay
for the signal. Those entities and states that refuse to pay the higher
rates would be blocked from accessing the entire New York State
platform.

** Eliminate current restrictions on in-home simulcasting and internet
video streaming.

"The time for streamlining OTB in New York is long past overdue," said
Task Force Chairman John Van Lindt. "Having a vibrant and efficient
network of OTB operations is critical to the future of New York's
Thoroughbred and Standardbred racing -- as well as to the taxpayers. I
thank Governor David A. Paterson for giving us the opportunity to
conduct this study and I urge our state legislators to give
consideration to our conclusions."

The Task Force urged lawmakers to only consider privatizing New York's
OTB corporations if they rejected the panel's recommendations.

"We have identified many ways to make OTBs more efficient and help them
better producers of revenue, with one great example being the lifting of
certain restrictions that put both the OTB corporations and the tracks
in better position to compete with out of state ADWs," said Task Force
member John Crotty.

In another major proposed revision to state Racing Law, the Task Force
recommended the elimination of the requirement that the OTB corporations
make dark day, maintenance of effort and hold harmless payments to those
tracks with video gaming operations in operation for 24 months or
longer.

"These protectionist payments are no longer needed by the harness
tracks, in part because the introduction of video gaming has provided
great financial benefit to their racing operations," said Task Force
Member Jerry Skurnik.

Among new efficiencies sought by the Task Force are the streamlining of
management operations and cost-cutting throughout the OTB structure. The
Task Force noted that, when combined, the salaries for managerial staff
at the six OTBs comes to more than $10.5 million, not including
benefits.

At a series of meetings that began in May 2009, the Task Force solicited
comments and proposals from local government representatives, racing
industry executives, breeders, horsemen, the betting public, video
lottery parlor operators and OTB executives.

The Task Force, while accepting some changes sought by the OTBs,
rejected a proposal that statutory amounts be paid after paying all OTB
operating expenses. "If this idea were to be adopted, there would be
little incentive for the OTBs to reduce overhead," said Task Force
Member Thomas Casaregola.

To strengthen New York's native breeding and racing industries, the Task
Force recommended that OTBs be required to prominently display and give
preference to all live New York State races.

"From the beginning, OTBs were authorized to operated in a manner that
is compatible with the interests of breeders and other stakeholders,"
said Task Force Member Skurnik. "It is crucial that New York's own
racing product be given prominent display at the New York OTBs."

"Despite all the national challenges facing the sport of racing, the
pari-mutuel wagering industry remains a vital part of the New York
economy," said Task Force Member Bradley Fischer. "These
recommendations, if implemented, will help us achieve a greater public
benefit from the OTBs. " Added Task Force Member Thomas Casaregola: "We
greatly appreciate the input we received from those who did cooperate
with us in our quest for comment and input."

Three members of the Task Force were appointed by Governor David A.
Paterson: Mr. Van Lindt, Mr. Crotty and Mr. Casaregola. A fourth member,
Mr. Skurnik, is the appointee of Assembly Speaker Sheldon Silver. The
fifth, Mr. Fischer, is the appointee of Senate Democratic Majority
Conference Leader John Sampson. Mr. Fischer was preceded on the Task
Force by Jon McCloskey, one of the original participants. The other Task
Force members thanked Mr. McCloskey for his service.

Biographical information on all the Task Force members is contained
within the panel's report, which can be found on its web site: -
www.otbfuture.com <http://www.otbfuture.com>




New York OTB threatens to close on March 30
By Matt Hegarty

http://www.drf.com/news/article/110350.html

The New York City Off-Track Betting Corporation will shut down as of the close of business on March 30 if it does not receive assurances from the state legislature that elements of its reorganization plan will be approved, according to officials of the organization.

The board of the corporation met on Monday and approved the plan to close of all the company's storefronts and its account-wagering operation, which together account for approximately $1 billion in handle each year. According to members of the organization, the board was required to announce that it would seek to close within 60 days in order to comply with statutes requiring the distribution of notices to unions representing its employees.

The announcement will likely put pressure on the legislature to begin deliberations on the OTB's reorganization plan, which would entail the reworking of statutory obligations to the racing industry and state and local governments. Since OTB filed for Chapter 9 bankruptcy late in 2009, the state legislature has failed to weigh in on the reorganization.

Of the six OTBs, only New York City OTB is believed to be facing dire financial circumstances. Robert Garry, the OTB's chief financial officer, told the board during the Monday meeting that, under current projections, the company would run out of cash after the first week in April and post a $5 million deficit for the second week of that month. If the OTB shuts down, all but a handful of the company's 1,400 employees will be laid off, officials said.

The threat to completely shut down is the second made by the OTB corporation in two years. In February, 2008, the board also authorized a shut down, when the city owned the company. As a result of that threat, the state of New York took over the company's operations late in 2008.

The racing industry has resisted the company's plan to change the statutes governing OTB's distributions. In 2009, the company provided approximately $100 million to both the Thoroughbred and harness racing industries, according to financial documents.