OTB cuts payments to local governments

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Pay raises and buyouts for executives are among the costs blamed for the Western Regional Off-Track Betting Corp. reducing its payments to local governments by $2.6 million this year.

In 2023, OTB leaders said Thursday, the agency sent $10.25 million to the 15 counties and two cities that own it. This year, that amount decreased to $7.6 million.

OTB did not specify how much the reduced payments will cost individual local governments. Erie County will be out an estimated $200,000.

Officials did not fully explain the reduction Thursday, but cited personnel, legal and development costs.

The drop follows a number of personnel expenses incurred by leadership this year as the agency has transitioned from outgoing CEO Henry Wojtaszek to former Buffalo Mayor Byron Brown.

Those costs include:

• $40,000 in raises for Wojtaszek and other executives approved in January.
• A $299,000 buyout for Wojtaszek that’s due to be paid at year’s end. 
• The hiring of Brown (salary $295,000), Chief of Staff Steven Casey (salary $190,000) and Director of Communications Michael DeGeorge (salary $130,000) in October.
• The retention, with pay raises, of Scott Kiedrowski, vice president of operations, (salary $190,000) and Ryan Hasenauer, marketing director (salary $130,000).
  

Wojtaszek said additional costs contributing to the reduction in payments include $300,000 in preparations to expand the hotel at Batavia Downs, $100,000 in legal costs, and other payroll expenses. OTB on Thursday subsequently put the hotel project on hold.

Wojtaszek said the legal bills were related to OTB pursuing an Employee Retention Credit with the IRS, a pandemic-era tax credit for certain tax-exempt organizations.

Figures displayed during OTB’s Thursday board meeting. Photo by J. Dale Shoemaker.

OTB has approved raises for executives and other employees of 8.5 percent over the past two years. 

Some board members Thursday were critical of the reduction of payments to municipalities.

“We’re not happy about it,” Board Chairman Dennis Bassett said. “That’s going to be our number one focus in 2025, turning that around.”

“Byron’s commitment is to make sure the municipalities’ amount goes up and that’s going to be our focus,” he added.

Bassett, however, said he had “no regrets” about voting for the raises or other expenditures this year.

“We’re fighting [in] a very competitive marketplace and we have to take care of our employees,” he said.

Timothy Callan, the Erie County board member, suggested the reduction in payments to the municipalities was evidence of deeper financial issues, not just this year’s raises.

“I’m not convinced the drop in revenue …. is driven by so-called one shot or one off expenditures,” he told Investigative Post.

“The corporation’s management has boasted all year about how great things are going there, record revenues, and this is why they’ve given raises to all the members of management,” he added. “But here we’re in year two of less revenue going to member governments and for me that’s not a sign of a corporation that’s doing the best it can do.”

By law, the public gambling agency sends a portion of its profits each year to the 15 counties and two cities that own it, including Buffalo and Rochester, as well as Erie, Niagara and Monroe counties.

In 2023, Erie County received $2.4 million from OTB. This year it’s projected to receive $2.2 million.

Brown told Investigative Post that his primary goal next year is increasing the payments to the municipalities. He told board members during Thursday’s meeting that he would adopt a “conservative” budget to achieve that. And he and Wojtaszek announced that the agency was putting the planned hotel expansion on hold to keep those costs from piling up.

“I can’t affect 2024,” Brown said. “My goal in 2025 is to return more revenue to the municipalities than they received in 2024.”

J. Dale Shoemaker