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Member municipality distributions to approach $10 million in 2024: WROTB chief financial officer

By Mike Pettinella

Western Regional Off-Track Betting Corp. management is projecting net revenue from its racing and gaming operations to approach $86.4 million in 2024, resulting in nearly $10 million in surcharge and earnings to be distributed to its 17 member municipalities.

At Wednesday’s board of directors meeting at Batavia Downs Gaming on Park Road, WROTB Chief Financial Officer Jacquelyne Leach went over the operating plan – or budget – for next year.

The plan is a comprehensive document detailing income and expense streams for all aspects of the public benefit company, and is based on actual numbers through October of this year and industry trends.

“It’s a work in progress,” Leach said, but acknowledged that it close to being finalized. The final plan will be presented to the board for review at its December meeting. After board approval, it is submitted to the New York State Gaming Commission.

According to the report, the 17 municipalities, including Genesee County, are expected to receive $606,616 in surcharge distributions and $9,268,586 in earnings distribution for a total of $9,875,202 in the 2024 calendar year. That is up from $9,654,748 to be distributed in 2023.

Surcharge funds are derived from a 5 percent fee collected from patrons on winning wagers at WROTB branches and EZ Bet locations. Leach said the earnings distribution is about 11 percent of the net revenue from operations.

While the 2024 distribution projections reflect the corporation’s record earnings the past two years, Leach said the numbers are more impressive when looking back to 2019, when surcharge and earnings distributions hit the $3.6 million mark, and considering the impact of COVID-19 the following year.

WROTB lost $9.6 million in 2020, Leach reported. Despite that, the corporation has and is projected to distribute $38 million in surcharge and earnings for the six-year period, 2019-2024.

“We ate into our coffers some $9.6 million in 2020. And that, from a financial perspective, is incredible if you think about it. That we will be distributing and anticipate, project, to distribute $38 million,” she said.

WROTB President/Chief Executive Officer Henry Wojtaszek added that profit realized in that year, beside the Payroll Protection Plan money to keep employees on the job, was from the off-track betting internet wagering side.

Batavia Downs Gaming was closed for six months due to the pandemic. It has bounced back strongly, however, with revenues, net win (credits played into the Video Lottery Terminals minus credits won) and distributions increasing each year. Leach is anticipating the net win total to increase to $89 million in 2024.

Leach and Wojtaszek touted the “very good news” when talking about gaming, food and beverage, and The Hotel at Batavia Downs, but painted a different picture when the subject turned to the harness horse racing industry and the financial health of the corporation’s eight brick-and-mortar OTB branches.

Only two of the branches – Lyell Avenue in Rochester and Clinton in Erie County – are expected to be profitable in 2024. Operational losses of the branches are at $418,202 through Oct. 30, 2023, continuing a downward trend.

Leach reported that all of WROTB’s EZ Bet (self-service) locations, however, have increased the company’s bottom line; none are in the red.

“On the OTB pari-mutuel side, they’re competing for the gambling dollar with sports betting, which came into New York State in January 2022,” she said. “Plus, we’re required to make statutory payments to other racing entities in New York State based on antiquated handle numbers from 1993 and 2002 when the handle was much more robust. We’re getting no legislative relief on that end.”

Wojtaszek said a “day of reckoning is coming” for horse racing, again mentioning sports betting and also a doping scandal that has rocked the industry.

“The sport has been damaged. The numbers are down,” he said. “Jackie's just giving the numbers from the last couple of years. If you look at what our handle was relative to OTB, when you go back a decade or two, it was $200 million. That was the handle -- $200 million.”

He said the horse racing industry needs to “police itself” better. He mentioned a recent CBS “60 Minutes” story that focused on a doping (drug) scandal that has resulted in deaths to numerous horses and prompted Congress to create the Horseracing Integrity and Safety Authority to institute uniform rules for the sport across the country.

Wojtaszek said WROTB is working with a consultant to help the corporation going forward “but it’s going to be much more expensive to have our live racing relative to the testing. But it’s something that’s necessary.”

State law mandates that Batavia Downs Gaming must operate a horse track to keep its gaming license.

The corporation has reduced the number of OTB branches (or parlors) over the years and more cutting may be on the way.

Director Vincent Horrigan (Chautauqua County) asked if WROTB will continue “to live with” the branch losses or “do we turn it around?”

“That’s a great question and worth a discussion after the first of the year,” Wojtaszek replied.

Currently, the eight branches – located in Auburn, Jamestown, Erie County (two), Monroe County (three) and Niagara County -- employ 31 people.

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