Paterson Wins, Mayor Places In OTB Deal

Narrowly averting a shutdown of the city's Off-Track Betting parlors and the possibility of a hostile takeover by the state, Governor Paterson and Mayor Bloomberg have reached a last-minute deal that will allow the state to run the gambling centers.

Under the agreement, the city will receive a portion of the surcharge related to bets placed on races at tracks within the city, a figure that totaled $4.25 million in 2007, as well as an additional $3.25 million a year that the state has agreed to pay to broadcast races on two city television stations.

Mr. Bloomberg had been preparing to shutter the city's 68 betting parlors at the end of the day yesterday, saying he refused to subsidize the operation to keep it open. The city's gambling operations were on track to become a money-losing venture due to a financial formula that required the city to pay a growing portion of its revenues to the racing industry and the state.

"Working with State leaders, we have put out to pasture a fiscally flawed arrangement with OTB — one that threatened to divert City funds from police and fire protection, public schools, and other essential services. Instead, the City will continue to receive a public benefit from racing that takes place in New York City," Mr. Bloomberg said in a statement last night.

The agreement calls for the city's betting operations to be run by a newly formed state public benefit corporation. The city, meanwhile, agreed to postpone its plans to lay off 1,500 off-track betting employees and to rescind the layoff notices once the state takes over.

The deal, which has the support of the Assembly speaker, Sheldon Silver, and the Senate majority leader, Joseph Bruno, is expected to win approval in the Legislature, where lawmakers are scheduled to vote on it today.

Mr. Silver said in a statement that the city's Off-Track Betting operations are an important part of the thoroughbred racing industry, which he said is an important part of the state economy.

Off-Track Betting employees had been holding out hope that a deal would be brokered to save their jobs, even though a scrolling message on the city's Off-Track Betting Web site and signs in gambling parlors stated that the operation would close at the end of yesterday.

At a crowded gambling parlor in Chinatown's Chatham Square, about 200 gamblers gathered yesterday to place bets. One regular said it was a normal crowd for a Sunday. The floor was scattered with losing tickets that a janitor swept up as he moved about the room.

He said the fight over the city's off-track betting parlors had been going on for so long that all anyone could do was take it one day at a time.

"We're all staying positive that something can be done by tomorrow," the janitor, who asked not to be named, said hours before the deal was announced.

If an agreement hadn't been reached yesterday, the state had been expected to move ahead with a hostile takeover of the gambling operations that could have led to a showdown over the betting parlors.

Assemblyman J. Gary Pretlow, a Democrat of Westchester who is chairman of the Committee on Racing and Wagering, said that even if there was a hostile takeover, he seriously doubted "it would come to a border war between the state police and city police."

"If the mayor chose to close the OTBs, we would just open them, and if he put the city police on the state police, the state police would have authority over the city police anyway," he said.

City and state officials negotiated the gambling deal throughout the weekend, after Mr. Paterson prematurely announced on Friday that an agreement had been reached.

It didn't have the support of Mr. Bloomberg, who issued a statement later in the day that said until the city's "substantial legal and economic issues" were settled, he would "have no choice but to go forward with our plan to close the City's OTB parlors on Sunday."

He said he would fight to keep the gambling parlors from operating in the city unless they provided some public benefit.