Off-Track Betting Bankrupt, Says Horse Racing's Share Too High

New York's Off Track Betting Corporation filed for bankruptcy protection, saying declining revenues made splitting with its state, city, and racing industry partners by gross gambling revenue percentages unfair.

As losses have mounted over the last several years, New York's Off-Track Betting Corporation found itself forced into Chapter 9 bankruptcy this week. The company says distribution of revenues by percentage of gross have failed to allow for operating costs, and asks that the New York legislature lower its commitment to horse racing.

Over the last five years, OTB says it has lost $45 million at its 68 betting outlets. Declining track wagering has caused gross percentages to sink below the set operating costs for the corporation.

Lawmakers will be asked to modify the distribution of gambling revenue, in which the state, city, and the horse racing industry are granted set percentages of gross gaming revenue.

"NYC OTB generates hundreds of millions of dollars annually for the region, but it has been hobbled by statutes that make it impossible for the corporation to cover its own operating expenses," said Chairman Michael Frucher of OTB. "We just require the common-sense legislative changes that will allow this important state asset to grow."

Among plans Frucher has to save OTB include the drawing of $250 million in financing to pay debts, fund operations and finance development. Figures show that OTB has delivered $2.2 billion for horse racing, $1.4 billion for New York City, and $600 million for the state since beginning operation in 1971.