HARNESS TRACKS OF AMERICA Executive Newsletter

HARNESS TRACKS OF AMERICAExecutive NewsletterA daily fax and e-mail report on racing and gaming developments in North America and beyondStanley F. Bergstein, EditorThursday, September 2, 2010SO MUCH FOR OTB’S PLAN AGreg Rayburn, New York City OTB’schief executive, withdrew his offer ofearly retirements for OTB employeesyesterday after his deadline for unionagreement passed. Rayburn showed hemeans business in either saving or closingthe nation’s biggest betting service,handling more than $750 million a year.Rayburn issued a brief announcement,saying, “Yesterday the NYC OTB boardof directors passed a resolution approvingtargeted early retirement incentivescontingent on management reaching anacceptable agreement with its two largestunions. No such agreement was reachedwith either of the two unions by the deadlineyesterday. As a result, there will beno early retirement incentives availableto NYC OTB employees. Management ofNYC OTB will continue to work with itsunsecured creditors committee to determinethe path forward.” That path forward,as Rayburn characterized it, meantnot only that there would be layoffs ratherthan early retirement for employees ofthe state, which now runs OTB, but thatthe offer of transferring account wageringto New York harness and thoroughbredtracks was now off the table. That is partof Rayburn’s Plan B, and Paul Post, writingin The Saratogian, said that after severingall union contracts, all payroll andbenefits would be significantly reducedand OTB “would also seek reduceddistributions from tracks.”Considering that highly unlikely, wecalled Post, and he agreed, saying thequote had been taken from a governor’soffice report. More on that tomorrow. Healso wrote that Rayburn wants to avoidclosing NYC OTB because of the hugeimpact it would have on racing. He quotedRayburn, “Liquidating the business isa bad outcome for the racing industry inNew York. Massive loss of handle is goingto have some downstream effects.” Postnoted that attempting to sever union contracts“is almost sure to trigger expensiveand lengthy litigation, which could delayan ultimate resolution indefinitely.” MattHegarty, in his Daily Racing Form storyon the issue, explained that the accountwagering takeover would have been in exchange“for forgiveness of $65 million indebt.” Hegarty quoted Morgan Hook, aspokesman for Gov. David Paterson andNYC OTB, saying “Plan A is effectivelynot an option anymore. There was adeadline, and that deadline has passed.”CAL EXPRESS BETS PASSCalifornia’s rush-rush toward expressbetting sailed through the Senate andwent to Gov. Arnold Schwarzenegger’sdesk, where quick approval also is expected.Proponents wanted it effective immediately,but cooler heads prevailed, and itwill not take effect until May of 2012, allowingtime for rules and regulations tobe created.