NYC OTB bankruptcy case dismissed

Churchill Downs Inc. tracks, and probably other non-New York tracks, will have to consider their next steps following a decision by a federal court in New York on Tuesday that ended the bankruptcy proceedings of New York City Off-Track Betting Corp.

The United States Bankruptcy Court for the Southern District of New York granted New York City OTB’s motion to dismiss its Chapter 9 case. The ruling ends an objection by Churchill Downs, which had planned to file an adversary proceeding in the bankruptcy case regarding settlement issues.

Churchill said New York City OTB owes its tracks $835,751 in host fees for wagering on its tracks including Calder Race Course, Churchill Downs, and Fair Grounds. Churchill acknowledged that it possesses $477,402 that properly belongs to winning pari-mutuel bettors at New York City OTB outlets. Churchill said the retention of these funds violates state and federal laws.

The $477,402 Churchill currently holds is money from winning wagers on Churchill races made at New York City OTB outlets. Churchill has not been able to return the money to the corporation—to cover the payouts to winning players—because New York City OTB ceased operations on December 10.