The Privatization of NYC off Track Betting a Must
By: Frank Paul Gambino
I think a round figure of $500 Million for the purchase of NYC off Track Betting would be a reasonable deal and would close half of the gap of the transit deficit of $1 Billion. I think private industry can do a better job with the OTB operations, furthermore from this brief summary on the history and stat of OTB New York City has little choice on the matter. I think a $500 Million offer is very generous.
“When New York City went into the bookmaking business in 1971, its officials envisioned that their monopoly franchise would ultimately yield annual profits of $200 million. As it turns out, their projection was off -- by just a little more than $200 million.”
By: Frank Paul Gambino
I think a round figure of $500 Million for the purchase of NYC off Track Betting would be a reasonable deal and would close half of the gap of the transit deficit of $1 Billion. I think private industry can do a better job with the OTB operations, furthermore from this brief summary on the history and stat of OTB New York City has little choice on the matter. I think a $500 Million offer is very generous.
“When New York City went into the bookmaking business in 1971, its officials envisioned that their monopoly franchise would ultimately yield annual profits of $200 million. As it turns out, their projection was off -- by just a little more than $200 million.”
By Mayor Rudy Giuliani
“The transfer of OTB to private management will bring nearly $400 million dollars into the City and allow us to retain a sizable stake in the future success of the operation. The offer includes an immediate payment of up to $260 million, and an ongoing annual cash flow that will bring millions of dollars more to the City each year. The offer was approximately $113 million more than the runner-up bid. In addition, the offer provides for $50 million in capital improvements to OTB locations throughout the five boroughs of New York City. Completion of the sale requires approval from the State Legislature.
The New York City OTB used to be known as "the only bookie in the world that lost money." It was formed in 1970 to allow the City to profit from New York's popular horse-racing industry, but over time OTB was frequently the source of controversy because of mismanagement and profit shortfalls. By the time I first took office in 1994, the steady decline at OTB had resulted in a $5.3 million dollar deficit and a sub-par racing experience for horse-racing fans. It's no surprise that when I first proposed selling OTB, very few investors were interested in taking over the organization. Now that our management reforms and emphasis on accountability have turned this money-losing operation into a profitable business venture - with $35 million dollars net to the City last year - OTB has a market value that justifies the duration of our 31-year investment.”
New York City Off-Track Betting Corporation
Address:
1501 Broadway
New York, New York
10036 U.S.A. Telephone:
(212) 221-5200
Statistics: Government-Owned Corporation Incorporated: 1971 Employees: 1,500 (est.) Operating Revenues: $1 billion (2000) NAIC: 713290 Other Gambling Industries Company Perspectives: Our goal at NYC OTB is to provide a clean, comfortable environment to enjoy all the action and sport of horse racing.
Key Dates: 1963:
New York City voters support an off-track betting (OTB) referendum. 1970: New York State Legislature passes legislation leading to the creation of OTB. 1971: New York City Off-Track Betting Corporation begins operations. 1986: The first OTB Teletheater opens. 1995: Home simulcasting of races is initiated. 1997: The first OTB restaurant outlet opened. 2001: Agreement to sell OTB is reached but not executed.
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