Feb 7
2020
$40 for a six pack of beer? OTB parties on.
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The Western Regional Off Track Betting Corp. is spending more than $300,000 a year on suites to Sabres and Bills games and concerts and running up large tabs for food and drinks, including copious amounts of alcohol. Officials claim they’re rewarding high rollers at its casino, but records show they’re also helping themselves to the free tickets and concessions.
OTB, along with other Sabres suite holders, chose from a menu last season that charged up to $130 for a bottle of liquor, $40 for a six-pack of beer and $53 for a pizza. OTB, spending public money, dropped $85,690 for the 2017-18 and 2018-19 hockey seasons.
That’s on top of $332,500 spent to lease the suite for those two seasons.
The expenditures ultimately came at the expense of taxpayers, as they ate into OTB’s profits, which are intended to flow to 15 counties and two cities in western and central New York. Recipients include Erie and Niagara counties and the City of Buffalo.
In addition to the spending at KeyBank Center, OTB spent another $192,240 to lease a suite at New Era Field for the 2017 and 2018 football seasons. Its tab for food and beverages was an additional $13,292, kept down thanks to a credit of $750 per game that comes with the lease.
OTB officials have maintained that tickets to sports and entertainment events are intended to reward players at its casino at Batavia Downs. But OTB records show that its executives and board members were slated to receive tickets, as well.
For example, OTB executives and board members were listed as receiving 35 percent of the tickets distributed to Bills home games in 2016. At a value of $525 each, those tickets were worth $23,625.
Dennis Virtuoso, the minority leader of the Niagara County Legislature, has questioned the use of the OTB tickets and who received them since allegations of impropriety were raised last year.
“It’s an abuse of their power, it’s an abuse of taxpayer money,” Virtuoso said.
OTB officials have refused to discuss the program in detail. CEO Henry Wojtaszek ignored repeated requests for an interview. When quizzed at a press conference held on an unrelated matter, he insisted the program was being administered properly.
“The tickets are used for promotional purposes. They’re proper promotional purposes,” he said. “That’s all I can tell you.”
Wojtaszek described the money spent on food and beverages as “a normal amount of money.”
“You can check with all the other corporations that use these suites. That’s a normal amount to entertain the customers that come here,” he said.
There’s a difference between OTB and most suite holders at Bills and Sabres game, however. Private corporations are spending their own money; OTB, a state-created public benefit corporation, is spending public funds.
“I think this whole program is in violation of this ethics code in state law that the OTB is required to follow,” said Alex Camarda, senior policy advisor at the nonprofit reform group Reinvent Albany.
The distribution of tickets is among the issues being investigated by the FBI, state Comptroller and state Gaming Commission. A federal grand jury has been empaneled, as well. Also under examination: OTB providing costly health insurance to its part-time board members.
Pricey menu items
The Western Regional OTB, a public benefit corporation, was created by state lawmakers in 1974 to curb the black market hold on bookmaking and provide revenues to local government. It operates 15 betting parlors, 30 betting kiosks in restaurants and bars, and a casino and harness racing track at Batavia Downs.
Each year OTB is required to dispense a portion of its profits to its government owners, divided based on population. The payout last year was $3.4 million, up from $2.2 million in 2018. That year Erie County received the largest cut, $528,382; Buffalo’s share was $209,895; Niagara County’s, $171,768.
Officials maintain the local gambling market is competitive, including casinos on both sides of the border in Niagara Falls, and the suites are a good way of rewarding and retaining customers at its Batavia casino.
Phil Gambini tells WBFO how OTB tried to obstruct his reporting
Using the state Freedom of Information Law, Investigative Post obtained invoices for OTB’s food and beverage purchases at KeyBank Center events, which include concerts and Sabres and Bandits home games played during the 2017-18 and 2018-19 seasons, and concerts and Bills games played in 2017 and 2018.
SportsService, a Delaware North company, provides the catering in both the Sabres and Bills suites. It charges $70 for a special occasion cake. A selection of candies such as M&M’s and Reese’s Pieces costs $100. Food packages to serve a dozen or more attendees run from $125 to $880.
A 750-milliliter bottle of Moet and Chandon Imperial champagne is priced at $155. A liter bottle of Absolut vodka fetches $110. A liter of Crown Royal goes for $105.
Spending was nominal for concerts and Bandit games, but costs at Sabres games routinely topped $1,000 per outing, records show. The highest was a $1,701 bill for a faceoff against the Chicago Blackhawks last February.
OTB paid for a lot of alcohol that night, according to the invoices. Purchases included eight six-packs of beer, two bottles of wine and one bottle each of whisky and rum, as well as pizza, chicken wings and cookies.
OTB dropped another $1,596 for a November 2018 game against the Ottawa Senators. Beer and liquor again accounted for a good chunk of the bill, according to the invoice.
OTB racked up a big bill when Buffalo hosted a preliminary round of the NCAA men’s basketball tournament in March 2017. There was the $3,140 spent on food and beverages during the two days of games, plus $7,500 to lease the suite, which was not included in the regular lease.
Likewise, a pair of 2017 concerts required separate lease agreements at New Era Field. OTB paid $2,400 for 12 seats and three parking passes for a Guns n’ Roses show. It also spent $1,865 on food and booze. For a U2 concert, OTB paid $3,600 for 12 tickets and three parking passes. It spent $1,343 for food and drinks.
OTB defends spending
Wojtaszek said he considers the food and beverage bills a “very wise use” of funds.
Speaking of OTB’s casino, he said, “Obviously it works, because we had the best year we’ve ever had possible at Batavia Downs.” he said.
Net revenue from the casino has grown from $52.6 million in 2015 to $62 million last year, a reflection in part of the addition of video slot machines.
OTB depends on revenue from the casino and online betting to stay in the black. Other arms of its operation, such as betting parlors and the Batavia Downs racetrack, are losing money. As a result, OTB profits shared with cities and counties across western and central New York have been in a downward spiral since the late 1980s.
According to OTB policy, suite tickets are to be distributed to casino patrons, advertising partners and charities. They can be provided to OTB employees on a “limited basis” to reward them for a job well done, the policy says.
OTB’s policy requires an employee to host the events in its suites and says additional tickets can be used by the host for certain “non-popular” events. The hosting employee is allowed to bring a guest. Numerous entries in the records fail to identify the host, however.
For nearly a year, OTB rejected media requests for a list of those provided tickets. Meanwhile, they repeated assurances that all was on the up and up. Officials finally relented last October and released a voluminous cache of documents covering from December 2016 to April 2019 that, by OTB’s own admission, were not a complete and accurate accounting of who received tickets.
Indeed, the records included many blank and vague entries. Few, if any, of the several hundred events listed in the documents included the first and last names of all attendees, or even a full roster of guests. Many of the accounts are recorded in shorthand.
Officials received tickets
Due to shortcomings in the records, it’s difficult to determine exactly what share of tickets were given to casino patrons as opposed to OTB executives and board members. But the records appear to show OTB executives and board members received tickets for numerous events in suites at KeyBank Center and New Era Field, as well as for concerts at Darien Lake Performing Arts Center.
The records do not indicate whether recipients actually attended, and it’s possible that some of the tickets may have been passed on to others.
The documents often use shorthand to identify ticket recipients. For example, a recipient named “Henry” or “the Prez” is presumably Wojtaszek. Another recipient, identified as “SK” or “Scott” or “Scott K,” is presumably Scott Kiedrowski, vice president of operations. A third recipient is presumably Chairman Richard Bianchi, identified in shorthand as “Richard,” “Richard B,” “Bianchi,” “RB” or “Chairman.”
Ryan Hasenhauer, OTB’s director of marketing, who oversees the suite and concert programs, declined an interview request and ignored a request to clarify the shorthand.
The inadequacies of the records make it very difficult to determine precisely how many tickets individual executives and board members received. But it appears likely Kiedrowski and Wojtaszek received tickets to numerous games and concerts where they did not serve as hosts.
Wojtaszek deflected when asked if he ever brought his wife, children or friends to games, reiterating that “the tickets are used for proper promotional purposes.”
When asked the same question, Kiedrowski said: “I follow the rules and regulations as given to me by the corporation.”
Board members’ names, or shorthand that suggests their names, also appear frequently in the records. At least seven board members are listed in documents as recipients of tickets for concerts and Sabres or Bills games.
Bianchi, the chairman, told Investigative Post that he only took tickets to distribute to charities.
“Most of them were for the Breast Cancer Coalition of Rochester and other charities,” Bianchi said during a brief interview.
Melisande Bianchi, the chairman’s wife, is the longtime vice chairwoman of the coalition.
Though permitted by OTB policy, Bianchi’s donations may conflict with state ethics law, according to Camarda of Reinvent Albany. The law prohibits a public officer from giving a gift from their agency to any third party, including charitable organizations.
“OTB’s weak ethics policy for the suites program should have never gotten past the starting gate,” Camarda said. “But the Gaming Commission must have blinders on, because they approved a policy that doesn’t meet the standards of state law.”
Beside Bianchi, at least six other current or former board members are listed in records— either by full name or by shorthand — as recipients of Bills and/or Sabres tickets. They include Sue May, who represents Wyoming County, Richard Siebert (Genesee), Edward Morgan (Orleans), Thomas Wamp (Livingston), Elliott Winter (Niagara), and John Clifford (Steuben).
In addition, “Mike Kane,” “MDK” or “Kane” is listed in records as receiving 19 tickets to four Bills games and one Sabres game. These are presumably references to Michael D. Kane, OTB’s former CEO.
Kane told Investigative Post he never attended a Bills or Sabres game, but his brother and his brother’s friends did. Kane said he would call the marketing officials and request tickets if any were available.
“I didn’t give anybody tickets. I called and asked if there were tickets available,” he said.
Camarda, of Reinvent Albany, said the slipshod record-keeping is another problematic layer in an already questionable program.
“Reinvent Albany does not believe this ‘high-rollers’ program is in compliance with state ethics laws,” he said. “The fact that the bookkeeping is vague and lacks necessary details only makes it worse.”
