State comptroller to audit OTB

Planned review follows reports by Investigative Post into generous perks doled out to board members and others

The state Comptroller announced Friday his office is going to take a close look at how the Western Regional Off Track Betting Corp. does business.

The audit will consider not only the routine aspects of the OTB’s operation, but several questionable business practices exposed by Investigative Post and the Niagara Gazette. They include deluxe health, vision and dental insurance provided to part-time board members and the distribution of tickets to concerts and sporting events.

“Questions have been raised about the Western Regional Off-Track Betting Corporation that warrant a deeper look,” Comptroller Thomas DiNapoli said in a statement.

“Our audit team will closely examine the organization’s operations and issue a report to the public,” the statement continued. “The Western Regional OTB, like all local authorities, is a public entity that is accountable to taxpayers and must operate with transparency and under specific rules.”

The OTB requested an audit by the comptroller in May and a spokesman Friday said: “We are certainly looking forward to fully cooperating with them.

“We welcome this opportunity to demonstrate how WROTB operates at the highest levels of transparency and is in strong financial shape, while at the same time implementing any recommendations that can further improve our operations,” Ryan Hasenauer said in an email statement.

OTB is already under scrutiny by the FBI, which is looking into a lucrative contract issued to Growth Marketing Group, which places advertising for Batavia Downs, a casino and racetrack the OTB owns and operates. The company is headed by Arnie Rothschild, who is active in Republican circles and close to OTB Chairman Richard Bianchi. At least one federal subpoena seeking documents related to contract has been served on the OTB, according to sources.

The Western Regional OTB is owned by 15 counties in Western and Central New York, plus the cities of Buffalo and Rochester. It operates 15 betting parlors, 30 betting kiosks in restaurants and bars, and a hotel, harness racing track and casino at Batavia Downs.

The OTB dispense its profits to its 17 government owners, divided up based on population. The total in 2017 was $2.9 million. Erie County received the biggest cut, $709,280; Buffalo’s share was about $281,749; Niagara County’s, $227,016.

State audits typically take between six months and a year to complete. According to the comptroller’s letter to the comptroller’s letter to the OTB, the audit will “focus on an evaluation of WROTB’s internal controls over its financial operations.”

A spokeswoman for the comptroller, Tania Lopez, declined to detail the specific objective and scope of the audit. “We’re looking at everything an audit is supposed to look at,” she said.

Board members have long enjoyed free health, dental and vision insurance. The state comptroller and attorney general have both gone as record saying board members are not entitled to the insurance, as have attorneys retained by the board this spring for an independent assessment. But the board has refused to act on that advice.

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Meanwhile, former state Sen. George Maziarz publicly alleged in February that the OTB has routinely given tickets to suites it rents for Bills and Sabres games to family, friends and political figures allied with OTB officials.

OTB President Henry Wojtaszek denies the charge, but the OTB has refused requests made by the Gazette and Investigative Post to release the names of ticket recipients under the state Freedom of Information Law. The state Committee on Open Government has disputed the OTB’s grounds for not releasing the names of ticket recipients.

While OTB officials have proclaimed their commitment to transparency, officials of late have been unwilling to grant interviews and been slow to release documents requested under the FOI Law. The OTB has also hired expensive lawyers and lobbyists to deal with fallout from reporting from Investigative Post and the Gazette.

The OTB in April retained noted Buffalo attorney Terry Connors at rates ranging up to $400 per hour. His bill through the end of May totaled $17,035.

Early this year, the OTB hired former Assemblyman Sam Hoyt as a lobbyist for $6,500 a month through June and $3,500 a month for the balance of the year. While Hoyt has worked primarily on legislative matters, he is known to have devoted some time in an effort to tamp down criticism of the OTB.