A very bad bet
Here’s a great idea: How about we take this organization that for years has embraced the worst business practices, drawing censure from multiple sources, and we let it expand its operations into New York City and, heck, maybe into Westchester as well?
And when we say “Here’s a great idea,” what we mean, of course, is: What are they thinking ?
That anyone would consider the Catskill OTB a candidate for expansion is an utter mystery. Yet that’s the gist of a proposal floated by some state legislators.
This was an operation, the state inspector general’s office found in 2018, that had offices so full of trash that they were forced to hold meetings in rented rooms, and that spent millions on warehouses to store “worthless items and garbage.” This was an operation that Orange County legislators called a “private patronage mill”; that its partner counties said regularly didn’t follow through on required revenue sharing; that sought to file for bankruptcy in 2018 and whose director was rapped over allegedly inappropriate use of a company car. An organization whose board members were unaware of — or determinedly incurious about — the IG’S report and the inner workings of the public corporation, and who later dismissed the report entirely: “We know it’s all fabricated and probably politically motivated,” one member said. Oh, and when the state Gaming Commission said it had made the OTB clean up its act after the inspector general’s investigation? Board members called that a lie, too.
Catskill OTB’S longtime director, Donald Groth, said his organization did nothing wrong, though everything would be better if the state would just let him add video lottery terminals. “Catskill OTB has delivered amazing results for New York state,” Mr. Groth said last year. Yes, the sort of “amazing results” where you haven’t been profitable since 2016, per their 2021 financial statements.
What is it about this situation that would make anyone say, yeah, we want more of that?
But that’s what the Assembly’s Racing and Wagering Committee chairman, Assemblyman Gary Pretlow, proposes. He’d like to see Catskill OTB expand into New York City to operate self-service kiosks, perhaps later adding Westchester County to its portfolio.
Mr. Pretlow has called the state IG report a “hit job.” To put it mildly, that strains credulity.
True, Catskill OTB has a new president and CEO now, though Mr. Groth is apparently still on the payroll. But even if their mismanagement days are in the past, the Gaming Commission director fretted earlier this month over Catskill OTB’S “lack of a viable business model,” and an audit last fall raised similar warnings.
“Catskill OTB is the only OTB that has not generated a single year of positive revenue for distribution since 2017,” auditors wrote in 2022.
Do the organization’s defenders think that’s all lies and hit jobs, too?
With mobile sports betting, the decline of horse racing and more New York casinos than you can shake a stick at, gambling doesn’t look like it used to. The OTB era has come and gone. Expanding on that business model would be a mistake under the best of circumstances. Compared with other New York OTBS, the circumstances at Catskill appear to be the worst. This proposal makes no sense.