Public Employee Press

Union testifies
OTB revenue distribution is a losing bet

In a push to save the city’s Off-Track Betting Corp., Local 2021 President Leonard Allen testified Dec. 4 before the City Council Finance Committee, calling for a change in OTB’s distributionformula.

The council scheduled the hearing in response to Mayor Michael Bloomberg’s recent comments about shutting down OTB by June 30 if nothing is done to allow the Big Apple to retain a greater share of the OTB purse.

OTB takes in $1 billion in bets and produces $130 million in profits annually. It is the backbone of the racing industry in New York. Local 2021 represents 1,400 clerks, who are responsible for the success of the betting parlors. The city’s 68 OTB parlors take in 40 percent of the wagers made statewide. But Albany siphons off 70 percent of OTB’s gross take, which, the union argues, leaves very little money for OTB to pay the city as required by law. OTB has not paid the city since 2004. The current payment formula is based on OTB’s gross revenues. “The formula by which OTB’s revenues are distributed must be changed to net revenues,” Allen said.

“Shuttering OTB is like cutting off our noses to spite our faces. Betting on horses will not disappear; it will just find other, less attractive venues. Instead, what needs to be done is to fix the distribution formula so that OTB keeps more of what it earns,” said Allen, who chairs DC 37’s Political Action Committee.

Besides the 1,400 unionized clerks at OTB, the racing industry employs nearly 40,000 people at racetracks, in food services, and on more than a thousand horse farms across New York State; all depend on the revenue stream OTB generates.

“If OTB were eliminated, most of these bets would disappear and so would the revenue we provide to support all those jobs,” Allen said.

Allen explained that harness race tracks statewide have rebounded by using revenues generated by video lottery terminals. The New York Racing Association, which was granted permission to operate 4,500 of these terminals at Aqueduct Racetrack in Queens, has failed to do so. “This inaction has cost the racing industry tens of millions of dollars in lost revenues,” Allen said.

“A fair and equitable solution must be found to make both OTB and the city whole,” said DC 37 Political Director Wanda Williams, who also spoke at the hearing.

“We need the state Legislature to take action and provide the city with its fair share of the revenues OTB generates by changing the current revenue distribution formula,” she said. “It is a losing gamble to continue operations under the current formula, which denies the city its fair share, threatens the operations of OTB and potentially means the loss of jobs.”

— DSW