By DAVID SEIFMAN City Hall Bureau Chief
In what would be the largest expansion of gambling in the city’s history, the chairman of the Off-Track Betting Corp. yesterday proposed adding up to 1,300 betting kiosks around the five boroughs — in bars, restaurants, bowling alleys and the like — as the only way to rescue the near-bankrupt agency.
"Believe me, if I could come up with another way of harvesting the revenues, I would do it," Meyer "Sandy" Frucher testified at a state Assembly hearing in lower Manhattan. With debts of $95 million and mounting, OTB has sought bankruptcy protection and permission from the state Legislature to proceed with a dramatic restructuring plan before it runs out of cash on March 31.
The plan includes shuttering 34 of 54 parlors, cutting half of the 1,300-person work force and adding 1,100 to 1,300 self-betting kiosks to bars, restaurants, bowling alleys and possibly bodegas.
Frucher described the parlors, which first opened in 1971 and handle more than half of OTB’s $800 million a year in wagers, as an "outdated" fiscal drain.
"They are much too expensive. They are a disaster," he said.
OTB officials blame the state for putting the agency in the hole by imposing a revenue-sharing formula that favors the racing industry.
Assemblyman Richard Brodsky (D-Westchester) told Frucher his plan was bound to stir new debate on the government’s role in promoting gambling
"This is an expansion of gambling, and to that extent the entire social debate about gambling is going to be had," said Brodsky. "That is not to say that your vision of what you want to do is wrong."
It didn’t take long for that debate to begin.
Assemblywoman Margaret Markey (D-Queens) insisted that local community boards approve locations for the kiosks, saying she has a "major concern" that kids would start betting the ponies.
Frucher immediately shot that down as unworkable.
"If you put it through that kind of mechanism, we’d be here 100 years from now trying to get the third machine up," he warned.
"Which restaurants are you talking about?" asked Assemblyman Michael Benjamin (D-Bronx). "Is it Peter Luger’s or McDonald’s?"
"You’re not going to put it in a five-star restaurant," responded Frucher.
OTB already operates terminals in eight restaurants, but they’re manned by tellers.
Frucher said the kiosks he’s proposing would be Internet-based and might be modeled on self-betting machines at racetracks, where a patron can buy a plastic card in different denominations and insert it into a device to make wagers.
At day’s end, the card is cashed out at a teller — assuming the bettor has picked winners.
If the Legislature approves the kiosks, Frucher said he’d be able to float $250 million in bonds to settle OTB’s debts and generate the funds to pay $50 million in severance costs and to build five super-parlors.
Taking a gamble * 1,300 OTB kiosks placed across the city
* In bars, restaurants, bodegas and more
* Patrons buy cards of various denominations
* Insert card into self-betting kiosk to make wager
* Card can be cashed out at a teller