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https://www.bloomberg.com/profile/person/18460117
Jake's 58 operator wants federal judge to toss NY PML Sec 109 Suffolk OTB lawsuit alleging misuse of funds
Thanks for the help. The item’s below. I’d be happy to mail you a copy, if you give me a mailing address.
Claude Solnik
Long Island Business News
2150 Smithtown Ave.
Ronkonkoma, NY 11779-7348
Home > LI Confidential > Stop scratching on holidays
Stop scratching on holidays
Published: June 1, 2012
Off Track Betting in New York State has been racing into a crisis called shrinking revenue. Some people have spitballed a solution: Don’t close on holidays.
New York State Racing Law bars racing on Christmas, Easter and Palm Sunday, and the state has ruled OTBs can’t handle action on those days, even though they could easily broadcast races from out of state.
“You should be able to bet whenever you want,” said Jackson Leeds, a Nassau OTB employee who makes an occasional bet. He added some irrefutable logic: “How is the business going to make money if you’re not open to take people’s bets?”
Elias Tsekerides, president of the Federation of Hellenic Societies of Greater New York, said OTB is open on Greek Orthodox Easter and Palm Sunday.
“I don’t want discrimination,” Tsekerides said. “They close for the Catholics, but open for the Greek Orthodox? It’s either open for all or not open.”
OTB officials have said they lose millions by closing on Palm Sunday alone, with tracks such as Gulfstream, Santa Anita, Turf Paradise and Hawthorne running.
One option: OTBs could just stay open and face the consequences. New York City OTB did just that back in 2003. The handle was about $1.5 million – and OTB was fined $5,000.
Easy money.
Jake's 58 Hotel & Casino in Islandia is pictured May 17, 2017. Credit: Barry Sloan
The owner-operator of Jake's 58 casino has asked a federal bankruptcy court judge to throw out Suffolk OTB's lawsuit accusing the company of misappropriating funds from the Islandia betting parlor.
In court papers filed Thursday, lawyers for Delaware North said the OTB lawsuit included "false claims" that the Buffalo-based sports and entertainment conglomerate had unjustly enriched itself by taking more money than it was entitled to from OTB bank accounts.
The OTB lawsuit, filed on Oct. 7 in U.S. Bankruptcy Court in Brooklyn, seeks damages of more than $5 million and requests a court declaration that Suffolk OTB may terminate Delaware North’s management of Jake’s 58.
The lawsuit accuses Delaware North of using the video lottery casino as a "piggy bank" and paying itself inflated amounts from OTB accounts at taxpayer expense. The lawsuit includes allegations that the company used OTB's marketing budget as a “slush fund” for unoccupied hotel rooms, caused OTB to incur state Gaming Commission fines through faulty supervision of the facility and misused OTB trademarks.
Bankruptcy Court Judge Carla E. Craig scheduled a hearing for Jan. 8 to discuss Delaware North's motion to dismiss the suit.
In a statement, Delaware North officials denied OTB's allegations and said the company had invested $100 million to launch the venue, including "millions of dollars in loans" to prop up cash-strapped OTB. Suffolk OTB filed for bankruptcy in 2011 and owes an estimated $15 million to its creditors.
"This case involves an attempt by Suffolk OTB to force the termination of a court-approved contract, notwithstanding that this contract has led to undisputed financial success for Suffolk OTB and its creditors,” Delaware North's motion said.
Delaware North is represented by David G. Hille of White & Case, an international law firm with offices in New York, Los Angeles, London and elsewhere.
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