Comptroller expresses concern about financial stability of OTBs
In an audit of New York's five regional off-track betting operations, Comptroller Thomas DiNapoli warned that OTB wagering has dropped precipitously over the past five years, threatening the viability of the OTBs.
Western OTB comes off a little better in DiNapoli's audit, primarily because the gains in video slot operations are more than offsetting the declines in horse wagering (full Western OTB report (pdf)).
Western OTB Corporate and Branch Operations has experienced a 10-percent ($15.6 million) decline in net handle (total amount bet) over the past five years. And through May 2009, its net handle was down over $5 million compared to the same time the previous year. In addition, live racing and inter-track wagering at Batavia Downs were down 7.6 percent in 2008 from the prior year and have decreased 25 percent since 2005.
However, the corporation’s new video-gaming facility has generated additional revenue for the OTB. As a result, operating revenues increased to more than $21 million in 2008 compared to nearly $17.6 million in 2004, a 19-percent hike. These increases have significantly affected revenue distributions to local governments, which have grown from almost $3.9 million in 2004 to more than $4.9 million in 2008.
In the report on Western OTB, DiNapoli expresses concern that VTL gaming could level off or decline, depending on the economy or changing competitive issues.
The Buffalo News received a written response from OTB President Martin Basinait, who said WOTB is "somewhat more optimistic."
But he said a number of changes can be made in state law to make the OTBs more competitive, such as changing the formula by which revenues are shared with tracks.
Basinait noted other past warnings from the state comptroller's office, including a 2005 report that found the OTB did not properly plan for the possibility of failure of Batavia Downs and the casino. He said the success of the casino has shown it was "not due to happenstance."
Basinait said DiNapoli's red flags about the future economic health of the OTB's casino are "unwarranted."