Senate Bill S6293

                                BILL NUMBER:S6293

TITLE OF BILL:
An act
to amend the racing, pari-mutuel wagering and breeding law, in relation
to authorizing the Suffolk regional
off-track betting corporation to file for
bankruptcy; and providing that all funds in the capital acquisition fund
shall be available to the Suffolk
regional OTB
for any corporate purpose

PURPOSE OR GENERAL IDEA OF BILL:
This bill would provide Suffolk OTB with the specific power to file
for bankruptcy under the United States Bankruptcy Code. The ability
to file for bankruptcy protection would allow Suffolk OTB to address
its debts and long-term obligations in an orderly manner, while
continuing to operate and generate revenue to pay creditors and
Suffolk County. The bill also allows Suffolk OTB to access funds in
its capital acquisition fund for general corporate purposes of the
Suffolk OTB.

JUSTIFICATION:
Suffolk OTB was created in the early 1970s to raise revenue for
Suffolk County as a participating municipality, curb illegal
bookmaking, and support the State's horse racing industry. It is
              

required by statute to make payments to the State, Suffolk County,
other municipalities and the horse racing industry. In recent years
it has faced fiscal challenges.

This bill would amend the Racing and Wagering Law to specifically
empower Suffolk OTB to file for bankruptcy. This specific
authorization to allow Suffolk OTB to file for bankruptcy will
protect taxpayers as well as the horse racing industry in New York.
Without bankruptcy protection, in the face of fiscal difficulty,
Suffolk OTB could be forced to shut its doors and terminate hundreds
of employees. This has devastating consequences for employees,
suppliers, landlords, neighborhoods and creditors, and creates
complicated and expensive issues for taxpayers. In addition, it
causes New York horse racing enthusiasts and racing revenue to shift
from New York State-based operations to out-of-state horse racing
ventures.

In March, 2011, Suffolk OTB filed for bankruptcy protection. It filed
a Plan of Debt Adjustment with the bankruptcy court, providing for
the 100 percent payment of its creditors over time according to
specific schedules. The bankruptcy allowed Suffolk OTB to continue to
operate and generate revenue to pay creditors, while addressing its
debts and long-term obligations in an orderly manner. However, an
objection to the bankruptcy petition filed by an out-of-state
competitor, challenging the OTB's legal authority to declare
bankruptcy, was ultimately sustained.

Amending the Racing and Wagering Law to specifically authorize Suffolk
OTB to file for bankruptcy protection will provide Suffolk OTB with
the tools to methodically address debts and long term obligations


such as leases and health care coverage while continuing to operate,
serve the public, generate revenue for the State and Suffolk County
and pay creditors; and then exit bankruptcy as soon as practicable.
Suffolk OTB is not on the expense side of State or local budgets.

Section 509-a of the Racing and Wagering Law expressly authorizes
regional OTBs to create capital acquisition funds, funded by
pari-mutuel wagering pools, for the purpose of financing the future
acquisition, construction or equipping of facilities. This bill would
provide that all funds accumulated in Suffolk OTB's capital
acquisition fund created pursuant to section 509-a of the Racing and
Wagering Law or deposited into such fund thereafter will be available
to Suffolk OTB for any corporate purpose. It will allow Suffolk OTB
to access and use for corporate purposes funds that are simply not
needed for the future acquisition, construction and equipping of
facilities.

PRIOR LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act shall take effect immediately.