The Suffolk County Off-Track Betting Corp. is racing to file for bankruptcy as it became the latest public entity to be dealt a losing hand by the Great Recession.
The Suffolk County Legislature approved a measure granting the OTB permission to reorganize under Chapter 9 to gain temporary protection from creditors at a special session Wednesday—the second emergency meeting this month involving evasive action over budget issues. County Executive Steve Levy signed off on the measure later the same day.
“Our situation is serious,” Suffolk OTB President Jeff Casale told lawmakers prior to the vote. “The need to act is becoming more and more urgent.”
He said the public benefit corporation, which earns the county nearly $2 million annually, has developed a reorganization plan that will cut the number of branches from 12 to six and lay off 16 employees.
The OTB will continue to run branch facilities it owns, including the Racing Forum in Hauppauge, the Sunrise Branch in Bay Shore and Airport Branch in Bohemia. Details on which leased locations would close were not immediately clear.
It will also expand Internet betting operations and double the number of betting machines now in 18 bars and restaurants, operations known as Qwik Bet.
Casale said it will take six to eight months for the reorganization plan to be approved by the court, but the process might go quicker.
In the past five years, the OTB laid off about 140 employees and closed three branches, with a fourth in Huntington slated to close up shop at the end of this month, Casale said.
“We obviously hit a point where if we had just been dealing with a downturn in the economy, I think we wouldn’t be here today,” Casale said while describing prior efforts to cut costs.
He added that contributing factors in declining revenue are what he called “convoluted and outdated distribution formulas” requiring OTBs to pay more to the racers, leaving less for local governments.
The New York City Off-Track Betting Corp. is currently reorganizing under bankruptcy court protection.
“Downsizing probably isn’t the right word,” Casale said. “It’s probably rightsizing.”