Mayor Michael R. Bloomberg today addressed the New York City Off Track Betting (OTB) Corporation's Board of Directors during an emergency meeting where the Board voted to implement a closure plan.  Although OTB's revenues exceed its operating costs by $129 million per year, State law requires that it provide millions more annually to Albany, which will cause the Corporation to run cash negative in June. The closure plan was presented to the Board to avoid a situation where OTB would need to be subsidized by taxpayer funds. Under the closure plan voted on today, layoff notices would be sent to OTB's 1,500 staff members on April 17th. Operations would cease on June 15th and layoffs would be effective on the 16th.  Additionally, at today's meeting, it was announced that OTB would close two storefront parlors by the end of the month, at 26-96 Hylan Boulevard in the New Dorp section of Staten Island and at 28-15 Steinway Street in the Astoria section of Queens.

"If we did nothing, by the end of June, OTB would be running a cash-negative operation for the first time in its history.  I believe that if OTB is unable to operate without taxpayer subsidies, then it should not operate - period," said Mayor Bloomberg. "The City simply cannot take dollars away from schools and hospitals to pay for a gambling operation.  We have no business subsidizing betting parlors at the expense of City taxpayers, particularly at a time when we're asking all agencies to cut their budgets. OTB has made every effort to remain profitable."

When OTB was first established in 1970, its core mission was to raise revenue for the City and State.  With annual sales of more than $1 billion, and revenues exceeding operating costs by more than $129 million, OTB could still be profitable.  However, State Legislative actions, which require distributions based on revenues rather than profits, have forced OTB to pay an increasing percentage of its profits to help prop up the on-track State racing industry. 

Since 2004, OTB has reduced management positions by 15%, cut overall headcount by 14%, and closed branches to remain profitable.  In 2006, the City's Economic Development Corporation hired a consulting firm to perform a six-month study and develop a comprehensive plan to revitalize the New York racing industry.  However, the funding formula imposed by the State has not been addressed.  Last week, the State Legislature and the Governor agreed to fund a bailout for the New York Racing Association, but ignored the plight of the local governments that are responsible for OTB parlors across the State.   

During his remarks, Mayor Bloomberg said that the City would stay in close contact with the unions affected by the closure.  He also thanked the Board, including Chairman David Cornstein and President Raymond Casey for their stewardship and service.