Bankruptcy action taken by NYC betting parlors

AP News
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Posted: Dec 03, 2009 5:43 PM

The New York City Off-Track Betting Corp. is threatening to close unless the state changes racing laws so it can be profitable.

The corporation announced Thursday it had filed for Chapter 9 bankruptcy protection, which is available to government-created entities.

The corporation says laws require much of the betting handle to be divided immediately among the racing industry, the state and others, leaving little, especially with declining wagering revenues and an outdated business model.

New York City OTB said it may close if the New York Legislature doesn't change laws.

The independent public benefit corporation attracts about $1 billion annually by providing horse race betting parlors. It owes about $82 million.

Mike Bickford, who tracks bankruptcy filing data at AACER, says there have been no Chapter 9 filings in New York since 1985, the earliest year for which data were available.