New York City’s Off-Track Betting operations were to shut down at midnight Tuesday after the company’s reorganization plan was defeated in the State Senate. On a vote of 29-21 (with six senators failing to show for the vote), the motion came up three votes shy of the 32 necessary for passage. OTB, which is carrying some $228m in debt, now can’t go back to federal bankruptcy court with a plan to emerge from its Chapter 9 bankruptcy protection (which it entered a year ago this month).
State Democrats were in favor of passing the OTB plan (which had also been approved by OTB’s creditors), but most Republicans felt the New York City parts of the operation stood to benefit disproportionately compared to the OTB outlets across the state. Moreover, Republicans think the whole shut down move is/was a negotiating ploy. In response, OTB chairman Larry Schwartz said: “This is real. The corporation has no money.” OTB handles nearly 40% of the state’s pari-mutuel handle but has been bleeding red ink for years. Without a reorganization plan, OTB may face dismantling, with its more lucrative bits auctioned off to other gambling concerns.
Meanwhile, across the state line in New Jersey, the Assembly Regulatory Oversight and Gaming Committee is scheduled to hear a raft of bills on Thursday that seek to breathe life into their horse racing industry. Up for discussion are bills to decrease the number of races at the Meadowlands in order to create ‘elite meets,’ plus a bill to allow the state’s horse-wagering online betting site 4NJBets.com to offer wagers on out of state races.
Also on the agenda are the state’s bills allowing Atlantic City casinos to offer intrastate online gaming (from which the racing industry would get a cut of revenues). That bill has already passed a full vote in the Senate. A resolution to put the issue of permitting sports betting onto a ballot initiative will also be discussed, as will a proposal to allow state residents to purchase lottery tickets online.
Our last bit of Eastern Seaboard gambling news comes from the District of Columbia, where the DC Council passed an amendment (by a vote of 11-2) to redefine the DC Lottery’s mandate to include both “games of skill and games of chance.” The goal is to establish a DC Lottery-run private computer network that would permit DC residents to place fantasy-style sports bets and play poker online, so long as they didn’t leave the District. The bill will come up for a final vote before the end of the year.
The main motivator behind the Council’s push appears to have been DC Lottery’s sagging bottom line – the outfit’s revenue has dropped 10% over the past five years, and the District has a $188m budget gap. But before DC residents get too excited, DC’s outgoing Attorney General Peter Nickles (who appears to have been blindsided by the Council’s vote) says there are a whole lot of legal complications at the federal level that the non-lawyers on DC’s Council seem to have overlooked. And with all those federal politicians just down the road… Odd, that.
