New York City Comptroller William C. Thompson, Jr. joined District Council 37 at a City Hall news conference on June 11, 2008 to urge City and State officials to find a solution to resolve funding challenges facing New York City Off-Track Betting before it is forced to close its doors this coming weekend. Photo credit: Marla S. Maritzer

Related link: THOMPSON: NEW YORK CITY LOSING OUT ON OTB REVENUE

New York City Comptroller William C. Thompson, Jr. today called on City and State officials to work out a solution to resolve the funding challenges facing New York City Off-Track Betting (NYC OTB).

“I stand with labor leaders and my colleagues in government to urge the City and State to work together to save NYC OTB,” Comptroller Thompson said. “People should not lose their jobs as a result of an unfair funding formula that has consistently shortchanged New York City.”

Thompson will join labor leaders, members of District Council 37 and elected officials at a news conference at 11 AM today regarding the impending closure of NYC OTB. Over the last few years, Thompson has been a leading force in urging the State to change the mechanism that siphons revenue from NYC OTB.

“It is completely absurd that an organization that repeatedly operates in the black will see deficits in the tens of millions of dollars in upcoming years as a result of profits being drained from New York City,” Thompson said. “A formula needs to be developed that ensures that NYC OTB receives its fair share of any profits generated. It would be unfortunate if 1,500 people could lose their livelihood because the City and State could not come to a fair resolution.”

Over the last few years, Comptroller Thompson has reported on and testified about Off-Track Betting’s fiscal crisis, and the impact of dwindling revenue to New York City. He has strongly called for a restructuring of the financial formula to ensure that revenues are more equitably distributed. More recently, he testified on NYC OTB before the New York City Council Finance Committee on April 9. Today, he stressed the following key points:

• New York City has watched as its residual revenues plummeted from an average of $11 million in Fiscal Years 1997-2001 to $1 million in Fiscal Year 2002 and zero dollars in Fiscal Year 2007.
  
  
• NYC OTB’s current financial plan projects operating losses of $22.2 million in Fiscal Year 2009, growing to $30 million in FY 2012.
  
• A new formula would need to be established, or NYC OTB would need to close.
  
  
• Closure would mean the loss of 1,500 jobs, and the victims of this would likely need to seek unemployment and State-funded health benefits.

You can read more about the Comptroller’s reports and testimonies on NYC OTB at www.comptroller.nyc.gov

In July 2006, Thompson issued a report finding that NYC OTB’s payments to the racing industry and the State were absorbing a growing portion of its revenues, squeezing out revenues for the City.

Between Fiscal Years 1997 and 2001, the City received an average of $11 million in residual revenues from NYC OTB. The number fell to just $1 million in FY 2002. The City did not receive any residual revenues in FY 2003, FY 2005 and FY 2006 (FY 2004 revenues were minimal).

Thompson’s report found that, at the same time, the surcharge paid to the City declined as a share of NYC OTB’s statutory distributions, although these distributions were growing overall. In FY 1995 total surcharges due to the City were 24 percent of statutory distributions, but by FY 2005, those surcharges due to the City had dropped to 14 percent. Meanwhile, payments to the racing industry increased from 55 percent of statutory distributions in FY 1995 to 70 percent in FY 2005.

At the time Thompson issued the report, he indicated that NYC OTB projected operating losses of $8.2 million in FY 2006 rising to $22.6 million by FY 2010 – sending a message that the City likely would not receive any residual revenues during those years.

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