June 2, 2010
County losing revenue from OTB
Proceeds have declined 25 percent as industry faces statewide hardships
Cortland County’s yearly revenue from off track betting operations has declined more than 25 percent to $70,000 over the past three years as the industry statewide has hit financial hardships.
The state Comptroller’s Office conducted an audit from Jan. 1, 2004, to June 30, 2009, projecting a dismal future for five regional OTB corporations, including the Capital District Regional Off Track Betting Corp. that governs Cortland County OTBs.
Comptroller Thomas DiNapoli released his findings last week, saying the troubled economy and a dwindling interest in horse racing has led to a significant decline in the financial standing of the industry.
Capital District Regional Off Track Betting Corp.’s operating revenues, or money leftover after winners are paid and other expenses, diminished by approximately $3 million during the audit’s timeframe. In 2008, operating revenues dropped to $22.7 million from $25.6 million in 2004.
Capital OTB was formed in 1975 and is governed by a board of directors consisting of 17 participating counties and cities.
The decline has impacted local governments, which receive a percentage of the funds that OTB brings in. The revenue distribution to local governments has decreased 34 percent over the past four years, states the report.
Cortland County Deputy Treasurer Carolyn Kennedy said the three off track betting locations in Cortland County have brought in dwindling amounts of revenue for the county over the past three years.
The locations are Mijo’s Tavern in Marathon, the OTB Parlor on Tompkins Street Extension in Cortlandville, and the St. Charles Hotel on Central Avenue in Cortland.
It is not known what the breakdown is from each location.
In 2007, Kennedy said, the county received $97,748 in OTB revenues. This was reduced to $79,418 in 2008 and dwindled to $70,597 in 2009.
The county has budgeted to receive $70,000 in 2010.
So far in 2010 the county has brought in $17,058, said Kennedy.
Kennedy attributes the decline partly to the economy.
“People don’t have as much disposable income to spend or they don’t have jobs so don’t have the money,” Kennedy said.
The state audit issued five recommendations to stay afloat in the future.
Among them is a recommendation to close or convert underperforming branches to “EZ Bet locations” to reduce operating expenses.
Both Mijo’s Tavern and the St. Charles Hotel have these self service machines and both locations reported steady attendance over the years.
Corey Braig, who works at Mijo’s Tavern, said business has been consistent.
“We have our regulars who come in here every day who play,” Braig said, noting the tavern has two machines and serves food and hosts parties for big races such as the Kentucky Derby.
The owner of the St. Charles reiterated Braig’s comments.
Kent Finkelstein, who owns Uncle Louie’s Backyard next door to the OTB Parlor in Cortlandville, said the parlor’s business has been going downhill.
Finkelstein said a year ago the parlor laid off three of its four employees, and it used to be open until 10 p.m. It is open until 5:30 p.m. and closed Tuesdays.
“People can do almost all the gambling they want online. They do not have to go out in the middle of the winter and go to the OTB, they can send bets in over the phone and watch races,” Finkelstein said.
State Comptroller spokesman Bill Reynolds said the audit provides guidelines for the state and regional OTBs to follow in creating solutions to the financial difficulties.
“It’s up to the Legislature and state agencies responsible for administering the law and policy to make it easier for the OTBs to operate,” Reynolds said.
Reynolds said OTBs should also turn to the Internet, as he says Capital OTB has done with success.
“With the advent of the Internet as the place for people to go to place their wagers, if OTBs aren’t present online people aren’t going to go to them,” Reynolds said.
In its response to the audit, Capital OTB recommends the state prohibit out of state wagering sites or mandate they pay the same statutory costs New York sites are required to pay.
OTBs must distribute the funds received from betting patrons to the horse racing industry, the state and the city of Albany. OTBs charge a 5 percent surcharge, which funds participating municipalities and the local government where the tracks are located.
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