Nearly $65 million in debt will be forgiven – and the New York City Off Track Betting Corporation (OTB) will continue to operate, literally saving tens of thousands of jobs – thanks to a historic agreement with its creditors.
On Wednesday, October 20, Governor David A. Paterson and OTB announced that the corporation entered into a historic agreement with the Official Committee of Unsecured Creditors of NYC OTB (Creditor’s Committee) that will prevent the closure of NYC OTB.
The action will save hundreds of NYC OTB jobs and provide stability to the state’s horse racing industry, protecting an estimated 35,000 related jobs throughout New York.
“This agreement is a tremendous achievement and will help to reassure communities in New York that rely on the horse racing industry,” Paterson said. “When my administration took over the operation of NYC OTB, we did it because we knew the corporation could be saved, and the benefits would help the entire state. More than 17,000 jobs in New York are directly supported by the racing industry, and many thousands more are supported by the economic activity generated by horse racing. I commend NYC OTB Chairman Larry Schwartz and CEO Greg Rayburn for their efforts.”
This unprecedented agreement follows months of intense negotiations and is the cornerstone of NYC OTB’s Plan of Adjustment to be filed with the Bankruptcy Court. In addition to having the support of the Creditor’s Committee, the labor unions representing OTB employees reached agreements earlier this fall, which were ratified by their members.
Under the terms of the agreement, approximately $95 million in pre and post-petition debt owed by NYC OTB to the committee members will be resolved. Approximately $65 million will be forgiven by the New York-based track members of the committee in exchange for the transfer by NYC OTB of its advance deposit wagering operations and certain essential changes to the New York Racing Laws. The legislative changes will include provisions to help Video Lottery Terminal (VLT) operators, located at several harness tracks and Aqueduct Race Track, generate additional – measures that will increase aid to education.