Furloughs at OTB despite federal aid

With its profitable casino in Batavia closed because of the pandemic, OTB is furloughing 300 workers despite federal aid intended to keep staff employed

Western Regional Off-Track Betting Corp. has furloughed two-thirds of its workforce after accepting more than $3 million from the federal government intended to keep employees working during the pandemic.

The Batavia-based OTB has been forced to shutter most of its operations since March. Its casino at Batavia Downs, the largest source of revenue, is closed under state order. OTB’s 19 betting parlors, located around Western and Central New York, have reopened at 50 percent capacity. The harness racing season at Batavia Downs is scheduled to start on time July 25 and run through  December.

The shutdown has cost OTB an estimated $20 million in profits, according to data reported by the state Gaming Commission. Hence the decision to furlough 300 of its 450 full- and part-time employees, while allowing them to maintain their health insurance.

President and CEO Henry Wojtaszek announced the job cuts to employees in a July 7 letter obtained by Investigative Post. He said “non-essential” staff would be on furloughed “until further notice” as of July 10.

“This current pandemic situation has impacted our business significantly, and, as a result, we find that we must take some difficult short-term actions,” Wojtaszek wrote.

OTB has otherwise tried to keep the furloughs under wraps. It has ignored inquiries from news organizations, including Investigative Post and the Niagara Gazette, and failed to provide Investigative Post mandated access to its July 9 board meeting where the furloughs were presumably discussed. A source told Investigative Post that, perhaps to avoid a quorum that would have required public participation, no more than five of the board’s 17 members met at any one time.

Details on the furloughs were first made public July 13 in an interview Wojtaszek granted to The Batavian, a local digital publication. The reporter who he spoke with manages a sporting organization sponsored by Batavia Downs Gaming. The Batavian added an editor’s note to the story indicating the relationship after an inquiry from Investigative Post.

Poloncarz wants answers

Erie County Executive Mark Poloncarz, who last week lambasted New Era Cap for laying off 117 staff after accepting Payroll Protection Program funds, told Investigative Post he wants to hear directly from OTB officials.

Poloncarz told Investigative Post there may be an appropriate reason for the furloughs, but that OTB representatives should explain that to the Erie County Legislature and account for how the $3.2 million in funding was spent.

“Those are legitimate questions that should be answered in the public,” he said.

Getting information out of OTB “has always been very difficult,” Poloncarz said. He called it a “Republican patronage dumping ground” that has for years lacked a working relationship with local lawmakers. 

The county and the City of Buffalo are among the 17 municipalities that own OTB, a public benefit corporation created by the state Legislature in 1973 to curb illegal gambling on horse racing. 

“If Western Region OTB refuses to answer (questions) then I have serious concerns and we have to take it up the ladder, including pushing it to the New York State Attorney General’s Office or the New York State Comptroller’s Office, saying ‘We need these answers,’ ” he said. 

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Erie County Legislator Kevin Hardwick, who chairs the Government Affairs Committee, has called on OTB representatives to appear in the past. He said lawmakers would “consider” doing so again with regards to the Payroll Protect Program funds.

In addition, he said, there are other OTB-related legislative actions afoot. 

“We have talked about replacing our representative on the OTB board and my guess is that’s going to happen in the next couple weeks,” he said. 

Hardwick said he sees a new representative as a vehicle to “affect change” at OTB.

Poloncarz is the most prominent Western New York elected official to publicly criticize OTB since Investigative Post began reporting on the state-created entity. OTB is being investigated by the FBI and the subject of an audit by the state Comptroller.

Those investigations prompted OTB to hire Terrance Connors, a prominent Western New York criminal defense attorney. His legal bill so far is $92,718 and the board last month increased the amount the organization could spend on Connors from $85,000 to $105,000. 

In addition to its legal expenses, OTB’s financial troubles have not prompted reconsideration of the deluxe benefits package, including health, dental and vision insurance, provided part-time board members. The coverage typically costs OTB up to $500,000 annually.

The union representing OTB employees, United Public Service Employees Union, did not respond to multiple requests for comment. 

Other OTBs also obtained funding

The federal Payroll Protection Program was rolled earlier this year to help small businesses stem revenue losses from the pandemic and keep their workers employed. It allowed businesses with less than 500 employees to apply for a loan that, if criteria are met, converts to a grant.

There’s five OTB’s in the state, all of which received the funds. Lawmakers  including Rep. Carolyn Maloney, D-Manhattan, have said the disbursements demand scrutiny,. 

Maloney, the chair of the House of Representatives Committee on Oversight and Reform, told the New York Post last week: “I’m going to question the appropriateness of the OTB loans” when speaking to Small Business Administration officials. 

According to state employment data collected by USA Today, 4,100 employees of New York casinos will be notified this week of impending layoffs due to pandemic restrictions.

Asked about Western Regional OTB, Rep. Brian Higgins, D-Buffalo, did not name the organization specifically, but said: “Entities that accepted loans and didn’t meet requirements will and should be made to pay back the loans. Others that accepted the money but are trying to play fast and loose with the numbers, at the expense of workers, should be scrutinized.”

Ryan Hasenhauer, a spokesman for OTB, said “90-percent” of the funding went to wages and benefits.

“Taking care of our employees, 50 of which reside in Erie County, outweighs any unfounded criticism we may have received,” he said in a statement.