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Nassau OTB fails to make $
Michael Siconolfi, investigations editorThe Wall Street Journal
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million payment to county
Video Lottery Terminals at Resorts World Casino at Aqueduct Racetrack. Credit: Danielle Silverman
Nassau Regional Off Track Betting Corp. failed to make a $5 million payment to Nassau County in May as it struggled to cope with sharply reduced revenues during the coronavirus shutdown, agency officials said.
Nassau OTB had been on track to pay Nassau $20 million in 2020 in profits from video lottery terminals at Aqueduct Racetrack in Queens, where Nassau OTB has dedicated machines.
OTB, which makes quarterly payments to Nassau, made its first $5 million payment last August, the second in November and the third in February.
But the agency, which closed down most of its business in March, did not make the $5 million payment scheduled for May 15.
Nassau OTB President Joseph Cairo said, “we feel confident that we could have made the $5 million payment to the county quarterly, except the pandemic turned the world upside down.”
OTB can't pay the county until its auditor conducts a review of OTB financials. The review was delayed due to the coronavirus shutdown, said Cairo, who also is chairman of the Nassau Republican Committee.
Nassau County had budgeted $21.94 million in revenue from Nassau OTB in its 2020 budget: $20 million for VLT profits at Aqueduct, and $1.94 million in fees.
The betting agency gets $25 million annually from casino operator Genting New York LLC, for the VLT machines, and provides $20 million annually to the county in profits.
OTB officials said Genting still is paying OTB for the VLT's, despite Aqueduct's closure.
But instead of sending OTB $2.08 million a month, Genting has been paying OTB a monthly fee of $1.18 million, effective March 15.
OTB officials said they agreed to a smaller cut because of the extraordinary circumstances. But they characterized the $1.18 million monthly payment as significant, given the casino's closure.
When Genting resumes 90% of its normal business, the payment will return to normal, Cairo said.
Nassau Comptroller Jack Schnirman called the OTB payments "a significant revenue for the county" that had been "anticipated to grow" in 2020. Total payments from OTB to the county for VLT profits jumped to $20 million last year, compared with about $3 million in 2018.
Cairo said OTB plans to make a payment at the end of June "when the financials are completed.”
It's unclear whether the agency can the full $5 million payment that was due last month.
Referring to OTB's reduced revenue stream,Cairo said: “Obviously, that has to be a factor in what we give the county. We can’t give them what we don’t have.”
Mike Fricchione, a Nassau County spokesman, said the county expects "OTB will meet its commitment by June 20th.”
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