By DAVID SEIFMAN, City Hall Bureau Chief
The city’s teetering Off-Track Betting Corp. will seek permission to close as many as two-thirds of its 68 branches when it files a bankruptcy reorganization plan, The Post has learned.
Sources said the plan also calls for eliminating half of the remaining 1,100 betting clerks, through attrition or buyouts, and for OTB to float $250 million in bonds to meet its obligations.
One source said the bonds would have to be backed by the state, which faces its own monumental budget woes.
"Who in their right mind is going to buy OTB bonds?" asked the source. "The only way it works is with a state guarantee."
Another insider questioned whether Albany would be willing to place such a large bet on OTB.
"I think the bonds will have to stand on their own," the insider said.
Even though its churning $900 million annually through its betting windows, OTB is losing millions, largely because of a lopsided revenue-sharing formula imposed by Albany seven years ago.
As of six months ago, it owed the state, the racing industry and other creditors at least $75 million.
Sources said the state recently filed a tax lien against OTB to freeze $17 million due Monticello and Yonkers raceways.
Meyer "Sandy" Frucher, brought in by Gov. Paterson to head off financial disaster at the agency, is preparing a reorganization under Chapter 9 of the bankruptcy code, which would allow the city’s only legal bookie to keep functioning.
The official filing, originally set for Nov. 1, has been delayed.
Frucher told The Post that He was still formulating a plan and that no final decisions had been reached on what it might contain.
The state took over OTB from the city last year, after Mayor Bloomberg threatened to shut it down rather than spend taxpayer dollars to prop up a horse-betting operation.
One official said the state is in a bind because it could be on the hook for as much as $600 million in pension, health and other liabilities if OTB closes.