Reforms, at last, at OTB

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OTB boss Byron Brown speaks to reporters at Batavia Downs. Photo by Garrett Looker.

After years of scandal and critical audits, the governing board of the Western Regional Off-Track Betting Corp. has agreed in principle to a slate of reforms that address some longstanding criticisms of the agency. 

The course correction includes capping severance pay and travel expenses, putting more contracts out to bid, and tighter monitoring of promotional giveaways. 

Also under consideration is whether OTB will purchase a suite at the new Buffalo Bills stadium. Not under consideration is termination of health insurance provided to OTB’s chairman and 23 former board members or their widowed spouses.

In an interview with Investigative Post, OTB President and CEO Byron Brown said his package of reforms are a result of his management team conducting a “comprehensive review” of OTB policies and operations. He said the aim is to more clearly document certain practices and save money.

“We saw a number of things working with the board that needed to be updated, that needed to be improved, that needed to be reformed,” Brown said.

Brown’s reform agenda submitted to the OTB board.

The reforms come as a team from state Comptroller Thomas DiNapoli’s office sets up shop at OTB headquarters at Batavia Downs where they’ll spend the next six to eight months. Brown said he and other leaders met with the auditors last week and that he’s given them office space and access cards to various parts of the facility. The auditors are reviewing three to five years of OTB policy and operations and are expected to complete their review before the end of the year.

“They will have full access,” Brown said.

The reforms of the publicly owned horse racing and casino operation mark Brown’s first major move as OTB’s new leader. He left City Hall for the position in October, the culmination of a broader reform effort by the state Legislature that was initiated nearly two years ago. 

Under Brown’s predecessor Henry Wojtaszek, OTB was the subject of reporting that highlighted extravagant spending, critical audits by the state Comptroller, an FBI investigation, and numerous lawsuits. Any savings netted by the reforms could ultimately be returned to Buffalo, Rochester and the 15 western and central New York counties that own the organization.

Timothy Callan, Erie County’s deputy comptroller and representative on the OTB board of directors, called the package of reforms “encouraging.” A frequent critic of OTB operations, Callan said he’ll keep a close eye on how the new policies are implemented.

“Anybody can write a policy or say, ‘Oh yeah, we’re going to do this,’” he said. “But you actually got to do it. I’ll be monitoring that to see if, in fact, these things they’re saying they’re going to do, they will really do.”

Antonella Rotillio, who represents the unionized OTB employees, including bartenders and security guards, struck a similar tone. She said the reforms make her “hopefully optimistic” but that she wants to see action.

Some of the proposed reforms come in response to Investigative Post’s prior reporting. In December, for example, Investigative Post reported on the lavish travel enjoyed by Wojtaszek and some board members. Using a company credit card, records showed Wojtaszek spending $3,300 on a Las Vegas hotel, more than $2,400 on a nine-person dinner during a conference at Saratoga Springs, and $1,200 on an overnight trip to New York City.

The OTB board will now approve all out-of-state travel. Daily reimbursements will be capped at $58 for in-state travel and $87.50 for out-of-state travel or trips to New York City — amounts recommended by the state Comptroller. 

Other key reforms include:

Severance pay: Wojtaszek retired in December with a buyout package that included nearly $300,000 in pay and lifetime health insurance. OTB’s new policy will limit buyouts to four months of pay.

Competitive bidding: OTB last year awarded 80 contracts, half of them “sole source,” which involved no competitive bids. Brown said he wants to put more contracts out to bid. 

“We want to put most contracts out to bid unless it is clear that they are single source or sole source, according to the guidelines of the New York State Comptroller,” Brown told Investigative Post.

Merit raises: The board of directors will have to approve merit pay raises proposed for management and other non-union employees. Brown said he wants to “eliminate the perception of favoritism.”

Tipping: OTB charges hosts of special events at Batavia Downs a 20 percent fee. Servers and bartenders receive 18 percent of that total, bar backs and supervisors 1 percent each. Supervisors will no longer be eligible for tips and barbacks will be grouped in with other servers.

Promotional giveaways: OTB distributed “free play” certificates worth $13 million last year and gift cards worth $160,000 — perks distributed by management as a way to encourage patrons to stay longer and spend more. 

After March 15, only free play certificates physically signed by a manager and logged into an OTB database will be accepted. That practice will allow the agency to audit how the certificates are distributed. Brown said he would implement a similar tracking system for gift cards.

Transparency: Brown said OTB’s March board and committee meetings will be videotaped and posted online within 24 hours. He said he hopes to livestream meetings in the near future.

The OTB board has yet to act on another possible change.

OTB leases a suite at Highmark Stadium for Buffalo Bills games, a practice that was the subject of both Investigative Post reporting and a state Comptroller audit. That reporting and auditing found that OTB leadership and their guests often enjoyed use of the suite, which came with complimentary food and alcohol. 

The cost of a suite at the new Bills stadium scheduled to open in 2026, is substantially higher and Brown told Investigative Post he is talking with the Bills about a possible discount. Brown said OTB will purchase a suite if it can get a good deal. Otherwise, he said, OTB will purchase less expensive club seat tickets for distribution.

“We would like to get a better price. We’re not ruling it out, but … we will be doing a cost-benefit analysis,” he said.

Brown’s reform package noted that, should the agency opt for regular Bills tickets, it would not pay for food and drinks in the suites, which could save the agency up to $18,000 annually.

Left unaddressed are suites OTB has purchased at KeyBank Center for concerts and Buffalo Sabres games and Blue Cross Arena in Rochester for American Hockey league games. Brown noted those suites are significantly cheaper than those at the new Bills stadium. 

Absent from the reforms is any mention of health insurance provided board Chairman Dennis Bassett and former board members or their widows, a practice deemed “impermissible” by the state Comptroller and which in recent years has cost OTB about $149,000 annually.

Brown said that was not included in his reforms because he considers it a matter for the board of directors to address.

“I didn’t think as CEO reporting to the board that was an issue I had to bring to the board’s attention,” he said. “I think they’re very well aware of that issue.”

Callan, Erie County’s representative, said a change is called for.

“I wish that the new management team would go to the board and propose some changes on director health insurance,” he said. “It may not be a lot in the grand scheme of the overall budget of the corporation … but symbolism is important.”

J. Dale Shoemaker