Dec. 1 (Bloomberg) -- New York City Off-Track Betting Corp., the bankrupt operator of horse-race gambling sites, plans to shut down in two days unless the state Senate passes legislation to keep it in business.
OTB’s board of directors voted today to approve a closing plan, said Jessica Bassett, a spokeswoman for New York Governor David Paterson. The closing would lead to the loss of as many as 800 employee jobs, she said.
“They don’t have enough money to get through December,” Bassett said.
OTB, which is trying to restructure in bankruptcy, pressed lawmakers at a special session this week to pass legislation it needs to continue operating. The state Assembly passed the bill yesterday. The Senate didn’t take up the measure and must approve it by Dec. 3 to avert a shutdown, according to Bassett.
“I ask and urge the good men and women of the New York Senate, to come back by Friday and approve the plan that the Assembly approved so we don’t have to go ahead with the closing,” board Chairman Larry Schwartz at a meeting after an executive session.
OTB “intends to discontinue all business operations and shut down each and all of its facilities” on Dec. 3, OTB Chief of Staff Sylvia Hamer wrote to Mayor Michael Bloomberg yesterday. “The corporation will have exhausted all unrestricted funds available to continue its operations beyond that date unless circumstances materially change.”
A copy of Hamer’s letter was provided by Paterson’s office.
The proposed state legislation would reduce or eliminate certain payments OTB makes, according to a summary of the measure filed with the U.S. Bankruptcy Court in Manhattan. It would also prohibit OTB from filing another Chapter 9 bankruptcy petition and require its annual budget to be independently reviewed by the state budget director.
“Right now, there are concerns with the legislation proposed by the governor, and if he wants to secure passage, he will have to secure 32 votes among the 61 members of the Senate before the bill can be acted on,” Austin Shafran, spokesman for the Senate Majority Conference, said today in an e-mailed response to questions.
OTB’s bankruptcy plan depends on passage of the legislation. U.S. Bankruptcy Judge Martin Glenn in Manhattan said in a written order today that OTB could send the plan to creditors for a vote.
Richard Levin, OTB’s bankruptcy attorney, told Glenn at a hearing yesterday that the corporation won’t seek creditor support for the plan if the legislation fails. Levin declined to comment today.
OTB, which filed for bankruptcy in December 2009 after years of loses, receives a percentage of total dollars wagered through its services and makes distributions to the state, local governments and various horse racetracks. For the year ending March 31, OTB had an operating loss of $37.2 million after making the required payments, it said in court papers.
The case is In re New York City Off-Track Betting Corp., 09-17121, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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