BILL NUMBER: S7855

SPONSOR: KENNEDY
 
TITLE OF BILL:

An act to amend the racing, pari-mutuel wagering and breeding law, in
relation to the membership of the board of directors of the western
regional off-track betting corporation

 
PURPOSE:

This legislation would amend the membership of the board of directors of
the Western New York regional off track betting corporation, to provide
more equal representation of the people of the area who benefit from
proceeds from said corporation, and to provide board representation by
the Governor and legislative leaders.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section one amend the racing, pari-mutuel, wagering and breeding law by
adding new section 502-a to deem expired the current membership of the
WNY OTB board of directors, and to replace the board with representation
              

as follows: three seats appointed by Monroe, Wyoming and Orleans coun-
ties; one member to represent Chautauqua, Cayuga, Genesee, Livingston,
Schuyler, and Seneca counties; four members to represent Erie County;
one member to represent Niagara County; one member to represent Oswego,
Cattaraugus, and Wayne counties; one member to represent the city of
Buffalo; one member to represent the city of Rochester; one member
appointed by the Governor; one member appointed by the temporary presi-
dent of the senate; and one member appointed by the speaker of the
assembly.

Section two sets the effective date.

 
JUSTIFICATION:

The Western New York OTB is a public benefit corporation owned by 15
counties in Western New York, as well as the cities of Buffalo and
Rochester. As such, any profits made by the corporation must be returned
to the residents of these counties and cities. At present, the 15 coun-
ties each have one appointment to the board of directors, despite huge
discrepancies in population. As an example, Schuyler County, with a
population of 17,898, has an equal representation on the board as Erie
County, with a population of 954,236. This means for every person in
Schuyler County, the representative for Erie County represents 53
people. This hardly results in equal representation for the residents of
Western New York, especially when profits made by the corporation are
distributed based on the population of the county or municipality.

Further, the board has recently been marred by inaction in the face of
several investigations into its management. In 2019, the corporation was
subject to an FBI investigation into political motivation behind the
awarding of contracts.(1) This allegation was supported by a retired New
York State Senator, who worked closely with senior staff of the OTB in
political areas.(2) However, no action has been taken by the current
board in response.

Further, members of the OTB Board of Directors have received health
insurance coverage as part of their duties, in apparent violation of the
Comptroller's opinion on the matter.(3) Despite public uproar over this
action, board members still have not corrected this mistake.

Finally, on September 23, 2021, the New York State Comptroller released
an audit that uncovered that the Western New York Off-Track Betting
Corp. (OTB) spent at least $121,000 on tickets to sporting events,
concerts, food and alcohol for board members, employees and other indi-
viduals without the oversight required by state rules. The audit found
that OTB officials did not keep accurate records of who received tickets
and concessions, which were valued, on average, at $221. Additionally,
auditors identified specific instances when board members received tick-
ets, but no business purpose was identified by OTB officials.

For these reasons, it is clear that Western New York deserves new repre-
sentation on the board. As profits are distributed by population, it is
fair for the membership of the board of directors to be based on popu-
lation. Using the allocations provided for in this bill, each board
member will represent approximately 210,000 people.  Further, allowing
for one appointee each by the Governor, Speaker and Temporary President
will allow for some membership that is not subject to the internal
selection process of a county or city government, allowing for some
independence in thought.

 
LEGISLATIVE HISTORY:

New legislation

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:

This act shall take effect on the one hundred twentieth day after it
shall have become law, provided, however, that effective immediately
municipalities may take any action necessary to begin the selection and
appointment process for new board member terms pursuant to this act.

(1) See https://www.investigativepost.org/2019/04/26/ fbi-investigat-
ing-buffalo-area-otb/

(2)https://buffalonews.com/news/local/maziarz-reignites- niagara-coun-
ty-republicans-feud-with-bid-rigging-charge/ article_c77
OOOfa-875f-511b-9c67-d318cfdfd72a.html

(3)https://investigativepost.org/2019/04/26/fbi-investigating- buffalo-
area-otb/