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December 6, 2011 | 539 views
Judge grants extension to Nassau OTB
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A judge granted another extension last week to the Nassau Off-Track Betting Corporation for its multimillion-dollar legal battle with New York harness tracks.
On Nov. 29, Judge Guy P. Tomlinson — whose judicial district (District 4) includes Schenectady, the home of the state Racing and Wagering Board’s headquarters — granted the corporation another extension, giving Nassau OTB and state harness tracks until Jan. 13 to try to reach a settlement with harness tracks.
Nassau OTB hasn't made any payments since 2004 to harness tracks — including Batavia Downs, Yonkers Raceway and Buffalo Raceway — for annual simulcasting proceeds. In March, the New York Racing and Wagering Board gave Nassau OTB an Oct. 31 deadline to pay $647,000 — its debt to harness tracks for 2010 alone. Currently, the corporation’s total liability is $4.5 million — the largest amount of debt among regional OTBs in the state.
Nassau OTB appealed the Oct. 31 deadline and a new deadline of Nov. 30 was granted in early November, under an agreement between the corporation and harness track officials. According to Arthur Walsh, counsel for Nassau OTB, the new Jan. 13 deadline "would be a ripe time for the court to enter a new judgment," which Nassau OTB hopes will include a reasonable payment plan for Nassau OTB and a reduction of its debt.
Walsh explained that all regional OTBs in the state have been working over the past nearly eight years to get rid of, or at least reduce, “maintenance of effort payments” — a category under which simulcasting fees fall, under state law. In 2004, he said, regional OTBs filed litigation against the tracks for the fees, alleging that the law doesn't require OTB corporations to make payments to tracks, but tracks to make such payments to each other.
Judge grants extension to Nassau OTB
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That litigation has been pending since 2004, and since that time, some harness tracks have installed video lottery terminals, causing their revenue to sky-rocket, Walsh said. "For us to subsidize them is bonkers," he said, adding that although while the current simulcasting law might has been reasonable a decade ago, "in practice, the law doesn’t work now. We have reached a point now where they should be subsidizing us because they have this new source of revenue. I think the coin has flipped." Walsh said that some tracks with VLTs, including the Yonkers Raceway, bring in nearly $9 million weekly — significantly more than Nassau OTB. "What they do in two and a half weeks is what we bring in annually," he said, adding that Nassau OTB's annual revenue is currently around $250 million.
In Franklin Square, several businesses, especially those surrounding the OTB branch on Hempstead Turnpike, are bolstered by spillover business brought by the OTB branch.
Refaqat Malik, who owns the 99 Cent Express at 1081 Hempstead Turnpike in Franklin Square, said that and a large portion of his clientele comes from the OTB branch, located just east of his store. Similarly, the Quarter Mile Sports Café, at 1049 Hempstead Turnpike in Franklin Square, shares patrons with the Franklin Square OTB.
Dave Herman, owner of New Generation Karate in Franklin Square, which shares a block with the 99 Cent Express, said that he’s ready to say goodbye to the OTB branch — which, he believes, could be spending money illegally. “It’s baffling how OTB can not have the money to pay their bills and taxes,” he explained. “They are basically a casino, and like with any other casino, the odds always favor the casino ... as a neighbor of the Franklin Square OTB, there is never a shortage of patrons in that location ... This would make one question where all the money is going.”
The Nassau OTB Board of Directors will hold a public meeting on Dec. 7 at 11 a.m., at the Race Palace: 1600 Round Swamp Rd. in Plainview. For more information, call Laura Tomeo at (516) 572-2800 ext. 139.
Comments on this story? JNash@liherald.com or (516) 569-4000 ext. 214.
Some local residents, however, have chalked up Nassau OTB’s recent filings for extensions to a sheer loss of funds, as was the case for the Suffolk OTB Corporation, which filed for bankruptcy in 2010, and the New York City OTB Corporation — once the largest bet-taker in the nation, annually turning over millions of dollars in profits and surcharge revenues to New York City — which was shut down after being taken over by the state in 2008 and filing for bankruptcy in 2009.
Additionally, the opening of VLTs at Aqueduct on Oct. 28 and the New York Racing Association’s new Belmont Café, the state’s highest-grossing off-track betting facility, has reportedly been a financial detriment to the OTB branch in Franklin Square. Nassau OTB includes branches in Carle Place, Farmingdale, Freeport, Levittown and Franklin Square.In Franklin Square, several businesses, especially those surrounding the OTB branch on Hempstead Turnpike, are bolstered by spillover business brought by the OTB branch.
Refaqat Malik, who owns the 99 Cent Express at 1081 Hempstead Turnpike in Franklin Square, said that and a large portion of his clientele comes from the OTB branch, located just east of his store. Similarly, the Quarter Mile Sports Café, at 1049 Hempstead Turnpike in Franklin Square, shares patrons with the Franklin Square OTB.
Dave Herman, owner of New Generation Karate in Franklin Square, which shares a block with the 99 Cent Express, said that he’s ready to say goodbye to the OTB branch — which, he believes, could be spending money illegally. “It’s baffling how OTB can not have the money to pay their bills and taxes,” he explained. “They are basically a casino, and like with any other casino, the odds always favor the casino ... as a neighbor of the Franklin Square OTB, there is never a shortage of patrons in that location ... This would make one question where all the money is going.”
Herman said that he’s received complaints about “homeless” people urinating and defecating near the OTB branch, and stumbling back into the Franklin Square OTB. “OTB seems to bring an element which I, and many others, find to be most unbecoming of a Franklin Square resident, or patron,” he said. “[Not having a branch in Franklin Square] would mean safer, cleaner streets, sidewalks and municipal parking lots in the immediately surrounding area.”
Although he's not a fan of the branch, he added, he acknowledges the business it brings to some businesses in the community.
Walsh said that concerns regarding Nassau OTB's financial state are simply incorrect. Unlike other regional OTBs in the state, he explained, Nassau OTB's revenue has risen by $12 million, or 8.4 percent, since 2010 — possible largely due to NYC OTB's demise. "We are not just delaying this thing," he said about Nassau OTB's extensions to pay its debt. "It’s been an ongoing discussion.”
According to Walsh, it's unrealistic for the simulcasting-fee litigation to be resolved by Jan. 13; it’s more likely for a court decision to be made during the next several months. If a court finds the fees to be reasonable, he added, the best-case scenario for Nassau OTB would be reaching a simulcasting-fee agreement with tracks that includes a payment plan. According to Joe Cairo, Nassau OTB's president, the corporation is hoping to formulate a settlement with harness tracks, outside of court, before the January deadline.
The Nassau OTB Board of Directors will hold a public meeting on Dec. 7 at 11 a.m., at the Race Palace: 1600 Round Swamp Rd. in Plainview. For more information, call Laura Tomeo at (516) 572-2800 ext. 139.
Comments on this story? JNash@liherald.com or (516) 569-4000 ext. 214.
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