Governor Paterson and NYC OTB Announce Agreement to Prevent Closure of NYC OTB

ALBANY, NY (10/20/2010)(readMedia)-- Governor David A. Paterson and New York City Off Track Betting Corporation (NYC OTB) today announced that NYC OTB has entered into an historic agreement with the Official Committee of Unsecured Creditors of NYC OTB (Creditor's Committee) that will prevent the closure of NYC OTB. The action will save hundreds of NYC OTB jobs and provide stability to the State's horse racing industry, protecting an estimated 35,000 related jobs throughout New York.

"This agreement is a tremendous achievement and will help to reassure communities in New York that rely on the horse racing industry," Governor Paterson said. "When my administration took over the operation of NYC OTB, we did it because we knew the Corporation could be saved, and the benefits would help the entire State. More than 17,000 jobs in New York are directly supported by the racing industry, and many thousands more are supported by the economic activity generated by horse racing. I commend NYC OTB Chairman Larry Schwartz and CEO Greg Rayburn for their efforts."

Senator Eric Adams said: "The OTB industry is of importance to the economic growth of New York State. I am pleased that this agreement was reached to prevent the closure of OTB. It will support and stimulate future financial health for the racing industry."

NYC OTB CEO Greg Rayburn said: "This is an agreement that involves shared pain across all of the participants in the process in order to arrive at a viable solution. I would like to thank the employees, our Board of Directors, the unions and the creditors for their diligence and willingness to be a part of the solution. We believe that the concessions made by all parties involved are in the best interests of the State and the racing industry, and we look forward to working with the Creditor's Committee in the future to continue strengthening horse racing in the Empire State."

This unprecedented agreement follows months of intense negotiations and is the cornerstone of NYC OTB's Plan of Adjustment to be filed with the Bankruptcy Court. In addition to having the support of the Creditor's Committee, the labor unions representing OTB employees reached agreements earlier this fall which were ratified by their members.

Under the terms of the agreement, approximately $95 million in pre and post-petition debt owed by NYC OTB to the Committee members will be resolved. Approximately $65 million will be forgiven by the New York-based track members of the Committee in exchange for the transfer by NYC OTB of its advance deposit wagering operations and certain essential changes to the New York Racing Laws. The legislative changes will include provisions to help video lottery terminal operators, located at several harness tracks and Aqueduct Race Track, generate additional revenue; measures that will increase aid to education.

The Creditor's Committee includes: Yonkers Racing Corporation; the New York Racing Association; Empire Resorts/Monticello Raceway; District Council 37, Local 2021; Finger Lakes Racing Association; Churchill Downs, Incorporated; and Paramount Leasehold, L.P.

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