WROTB

Gov. Andrew Cuomo's decision to legalize interactive fantasy sports in New York State couldn't have come at a better time for Western Regional Off-Track Corp., which recently signed a four-year deal with FanDuel to offer fantasy sports competition at Batavia Downs Gaming and at some of its OTB branches.

"We are very excited, and since we have a team flying down on Friday to FanDuel headquarters (in New York City) to meet with company officials, the timing of this is very good for Western Regional Off-Track Betting," said Michael P. Nolan, WROTB chief operating officer Wednesday night.

Earlier Wednesday, the governor signed bill S.8153/A.10736 that requires fantasy sports companies to register with, and operate under regulations issued by, the New York State Gaming Commission. It is expected that once fully implemented, the legislation will generate approximately $4 million in revenue to fund state education aid.

Nolan said that he expects WROTB's contract with FanDuel to be approved by the Gaming Commission in time for Batavia Downs Gaming to have its fantasy sports program up and running for the 2016 NFL season.

"Three weeks ago, Nigel Eccles, the co-founder and owner of FanDuel, came to Batavia and we gave him a tour of Batavia Downs and a few of our branches," Nolan said. "With this agreement, Western New Yorkers can expect the FanDuel product to be much more prominent in this area, and we will be bringing more people into Genesee County."

The WROTB-FanDuel partnership is truly that -- "a 100 percent incentive-based partnership," Nolan said.

"We feel that FanDuel is the best fantasy sports provider in the world and that's who we want to be associated with," he added.

Nolan said that he along with WROTB President Henry F. Wojtaszek and a few other members of the project's operations team will be going to New York City on Friday. He noted that while other race tracks and casinos in the state have voiced opposition to legalizing fantasy sports (claiming that it would hurt their businesses), WROTB management sees FanDuel's "synergy" with Batavia Downs Gaming's business model and "agreed that this was the best direction to proceed."

The governor's action ends a battle between New York State and the fantasy sports companies (Draft Kings is the other major player). State Attorney General Eric Schneiderman had unleashed investigations, lawsuits and regulations to shut them down, calling them illegal gambling ventures that raked in around $200 million in entry fees from more than a half-million customers in New York in 2015.

In signing the bill, Gov. Cuomo said in a press release that "daily fantasy sports have proven to be popular in New York, but until now have operated with no supervision and no protections for players. This legislation strikes the right balance that allows this activity to continue with oversight from state regulators, new consumer protections, and more funding for education.”

Interactive (online) fantasy sports are games of skill in which contestants assemble a roster of athletes in a given sport and use the actual performance statistics of those athletes to determine the contest’s winner. Contestants pay fees to enter the contest and, if successful in performing against their opponent, win prizes.

In addition to establishing the means for regulating interactive fantasy sports in New York State, this legislation also takes steps to institute important consumer protections for players for the first time, some of which include offering introductory procedures to new players, identifying highly experienced players, prohibiting the participation of minors and protecting players' funds upon deposit.

Michael D. Kane shares a moment with Pauline Andrews, his executive secretary, following today's Western Regional Off-Track Betting Corp. board meeting at Batavia Downs Gaming. Kane is retiring after five years as the corporation's president and chief executive officer. Photo by Mike Pettinella.

Western Regional Off-Track Betting Corp. directors this morning (Thursday, July 28) said farewell -- sort of -- to President and Chief Executive Officer Michael D. Kane at their monthly meeting at Batavia Downs Gaming.

Kane is retiring after a 17-year affiliation with Batavia Downs, including the last five as the president/CEO. The Dansville native (and former mayor of the Livingston County village) presided over his final meeting today, but will continue on for an indefinite period as advisor to the corporation's new president, Henry F. Wojtaszek, of North Tonwanda, who was promoted to the position after serving as general counsel to the board.

Directors and executive staff members had nothing but great things to say about Kane's work.

"Speaking for the board and our employees, I would like to thank Mike for his leadership and guidance that he has provided to us to take this corporation into the future," said Michael P. Nolan, WROTB chief operating officer. "Furthermore, it is important that we will be able to use his knowlege as he continues on in an advisory capacity."

The board authorized a weekly salary of $1,000 for Kane's services.

Board Chairman Richard Bianchi called Kane a "loyal and dedicated employee," who elevated Batavia Downs to its current level of success and "brought this board together better than I've ever seen it since 2003."

At the close of the meeting, the board celebrated the retirements of Kane and Barbara Hanft, executive assistant to the comptroller, with a birthday cake. Hanft will retire in September after 36 years with the corporation.

In other developments:

-- Nolan reported that the Batavia Downs Gaming Hotel is expected to open by the second week of September, adding that crews will be installing furniture in the rooms starting at the fourth floor and working their way to the first floor. The $7.5 million, 84-room hotel is being built by ADK Hospitality, a group of Buffalo investors.

-- The Downs' valet parking area has been moved from the south side of the facility to the front, and the parking lot will be reconstructed in certain areas in the coming weeks to make it safer for pedestrians entering the Park Road building, Nolan said. He also said a temporary covering over the entrance, which will mimic the completed project, will be in place within the next few months.

Valet Parking Update -- 6:30 p.m.: Downs' officials announced via Facebook that the valet parking will return to the south entrance due to concerns voiced by their patrons.

-- Nolan and five other WROTB representatives will be traveling to New York City to meet with officials of Fan Dual, a fantasy sports contest that will be offered at Batavia Downs. "We are looking to integrate our business relationship (with Fan Dual) in order to be up and running, when and if the governor (Andrew Cuomo) signs the bill."

-- WROTB's second quarter distributions to its Western New York counties totaled $867,364, about 21 percent more than earnings distributions for the same time period last year. In June, the surcharge for distrbution was $122,000 and earnings were $227,000. EZ Bet (wagering through terminals at sports bars) year-to-date handle is up $38,000 from 2015, and Batavia Bets (online wagering) was up 36 percent in June, 10 percent this mornth and 10 percent for the year.

-- The board welcomed a new director -- Elliott Winter, of Niagara County.

The Batavia Town Board on Wednesday night approved payment of additional expenses for work on the Townline Water Project and for engineering services for the Townline and Pratt Road water districts and the West Main Street Road Sewer District.

In unanimous votes, the board:

-- Agreed to pay a $47,680 change order submitted by Sergi Construction of East Aurora, which previously had won a bid for a $2.4 million contract for the construction of approximately 107,000 linear feet of 8-inch and 12-inch water main, valves, hydrants and related equipment along various roads in the towns of Batavia, Oakfield, Elba and Stafford.

The added funds were needed to cover the cost of furnishing and installing new 8-inch waterline with two hydrants and service, and the installation of 2-inch PVC at the Genesee County Fire Training Center on State Street Road.

-- Authorized payment of $16,061 to Visone Construction of Depew, which previously was awarded a $3 million contract for the same Townline Water Project. The increase was needed to cover the cost for new connections along Oak Orchard Road to the Village of Elba, and for an emergency water main break in Elba two months ago.

-- Approved payments to Clark Patterson Lee for additional design and construction inspection services for the Townline Water District ($66,900), the Pratt Road Water District ($9,600), and the West Main Street Road Sewer District ($21,000).

The board also OK'd a couple of resolutions in connection with sanitary sewer service with Western Regional Off-Track Betting Corp.

One of them was an amendment to a sewer service agreement that calls for WROTB to pay for construction of an extension of a sanitary sewer service line if requested by the Town, based upon requirements of future need or development; and the other was a resolution granting the Town of Batavia an easement from WROTB to maintain the sanitary sewer located on the east side of Batavia Downs Gaming and any future extension up to the south end of Richmond Avenue.

Officials at Western OTB think the odds of hitting a jackpot are better if their proposed hotel overlooks the Batavia Downs racetrack.

It is, after all, the oldest lighted harness racing track in America and the reason Batavia Downs exists in the first place.

Shoehorning it into the constrained space around the track, however, will require some bending of the rules.

There are zoning variances needed to lot size, lot frontage, front, side and rear setbacks and building height.

The scope of the variances prompted county planning staff to recommend disapproval of the project.

After Western OTB VP Mike Nolan pleaded with the board to support the project, saying it's the only viable option to ensure Batavia Downs continues to thrive and generate millions of dollars for the local economy, planning board members were unwilling to say no to the plan. They also didn't say yes.

The board took no action and the plan is now kicked back with no recommendation to Town of Batavia planners. It will be up to the town's Planning Board to decide whether to grant the variances.

Yes, Town of Batavia, not City of Batavia.

When the hotel plans were first announced, for the 80- to 100-room hotel, officials were talking about a location on the south end of the track, near Tops Plaza, but Nolan said further study on that location indicated it just wasn't viable. It's simply not big enough.

The current proposed location is on the north end of the track and would require the removal of some of the current paddock area.

It's critical, Nolan said, that the hotel be attached to the gaming facility and that it have suites with balconies overlooking the track.

A board member asked, why not in the parking lot on the west side of Park Road?

"It's important that horse racing stays strong and vibrant," Nolan said. "Over in the parking lot, it wouldn't have the same appeal as overlooking the oldest lighted harness racing track in America."

The target audience for the hotel aren't travelers passing through the area, but people willing to travel to Batavia specifically to place bets on races and drop coins in slots.

The desk for the hotel would, in fact, be in the gaming facility itself. (Some of us might call it a casino, but the state's compact with the Senecas prohibits Batavia Downs officials from calling it a casino).

The gaming environment in WNY is getting more competitive, Nolan said, and with the Senecas planning a new $400-million casino a short drive away, it's critical Batavia Downs up its wager on local gaming. Western OTB recently completed a $28-million upgrade to Batavia Downs and the hotel represents the next phase in making Batavia Downs more attractive to gambling dollars.

The land for the hotel would be sold to private investors who would own the hotel and operate it as a franchise of a national hotel company.

Nolan noted that when Western OTB took over Batavia Downs, since Western OTB is a public benefit corporation, it took $3 million in assessed value off the tax roles. The new hotel would be assessed at something in the neighborhood of $7 million, and while tax abatements used to help fund development would delay the full value of that tax levy being realized by some local governments, eventually it would generate substantial tax revenue for the county and school district.

Even if the private developers decided to eventually sell the property and Western OTB became the owner, the property would stay on the tax roll, Nolan said.

Press release:

In a letter to Monroe County Legislator Justin Wilcox, Seneca Nation President Barry Snyder Sr. announced that the Seneca Nation will no longer pursue the siting of a casino development project in Henrietta or Monroe County at this time. Subsequently, representatives of Western Region Off-Track Betting Corporation expressed appreciation to the people of the region for voicing their opposition to the proposal.

In the letter to Wilcox, Snyder stated, “We will not engage in the demanding and complex process required to get a casino approved pursuant to the laws and regulations governing Indian gaming without the support of the local community and New York State.”

To date, 17 towns and 11 counties, as well as the 19-member Inter-County Association of Western New York, have taken formal action opposing the expansion of casino gaming in Henrietta and Monroe County. In addition, 15 members of the State Legislature from across Western and Central New York have publicly expresses their opposition to the proposed expansion of casino gaming in the region. Governor Andrew Cuomo has stated that public support is critical when weighing the decision to expand casino gaming in the state. 

“From businesses, church groups, civic organizations, and everyday people from across the region to state leaders and local municipalities, the opposition to a casino in Monroe County has been overwhelming,” said Michael P. Nolan, executive vice president/COO of WROTB. “Clearly the Seneca Nation has heard the will of the people and responded accordingly.”

While acknowledging the Seneca Nation’s cessation of its efforts to expand casino gaming in Monroe County at this time, Nolan understands that the Senecas could reinitiate their efforts at a later date.

“If in the future the Seneca Nation should move forward with a proposal to expand casino gaming in Monroe County, we will once again emphatically oppose such a plan,” Nolan said. “The people of Monroe County recognize the fact that a Seneca-owned casino would adversely impact the local community and give the Seneca Nation a competitive advantage that will be damaging to businesses, both large and small, across the region. That is something that the people of this community are unwilling to accept, and they resoundingly made that point.”

Owned and operated by 15 Western New York counties and the cities of Rochester and Buffalo, Western Regional OTB is a public benefit corporation with headquarters in Batavia. WROTB owns and operates 29 branches, as well as Batavia Downs Gaming, a standard bred racetrack and gaming facility. Since its inception, Western OTB has generated more than $215 million in operating and surcharge revenues to the taxpayers of those participating municipalities.

Via WBTA:

Tensions are rising over a proposed Seneca Casino in Henrietta.

The law firm for Rochester developer David Flaum -- who’s working with the Senecas to explore a Las Vegas-style casino in Henrietta -- has written a letter to Western Regional Off-Track Betting threatening legal action.

It’s over the complaint filed by WROTB to the state ethics board over alleged illegal lobbying activities. The complaint seeks exploration of potential violations of the state’s lobbying law between the Seneca Gaming Corporation/Seneca Nation and Flaum. Batavia Downs CEO Michael Nolan told WBTA at the time of the filing that “evidence exists to support the conclusion that Mr. Flaum and Flaum Rochester have been acting as unregistered lobbyists and have accepted a contingent-based employment from the Nation.

Also some evidence exists to support that the Nation and the Seneca Gaming Corporation are considered lobbying clients of Mr. Flaum and Flaum Rochester and have failed to submit required semiannual reports.”

The developer’s attorney called the complaint “fabricated” and that if it wasn’t dropped, they would sue OTB.

OTB officials say it’s well within their right to seek an opinion from the ethics panel.

“We just submitted the complaint to JCOPE, which is a state commission that’s tasked with interpreting if a contract of this type falls within the ethics law,” OTB President and CEO Michael Kane said. “That’s all we’ve done.”

Multiple municipalities and politicians have voiced their opposition to the casino, saying it would have negative effects on Batavia Downs and the area.

The Senecas purchased 32 acres of land in the Town of Henrietta earlier this month.

Rochester media is buzzing today about a purported announcement by the Seneca Nation looking to open a casino in Henrietta.

WHAM 13 is among the stations reporting that the tribe wants to expand to the Rochester suburb.

Michael D. Kane, president and CEO of Western Region OTB, said this afternoon, there will be no Seneca-owned casino in Henrietta, at least not any time soon.

"Under the current statutory scheme, they will not be able to put a casino in Western New York," Kane said. "Without a statutory change, which isn't likely to happen in today's environment, they cannot do what they're looking to do."

Kane said he isn't really sure what prompted the Seneca's to announce an interest in a casino in Henrietta when something like that happening at this time is more of a dream than even a hope.

"If casino gaming became regulated in New York State rather than prohibited, then perhaps they could fashion some agreement with the federal government to do it," Kane said. "From my point of view, there's no change in enforcement from today than there was yesterday."

Western OTB runs Batavia Downs Racetrack and Casino which, under terms of an agreement between the Senecas and Gov. Andrew Cuomo, is blocked from expanding into a full-fledged casino.

According to WHAM, the Senecas have hired Flaum Management to "coordinate the development" of a casino.

"This is an exciting day," CEO David Flaum said. "I am profoundly grateful for Seneca Nation for choosing me. I hope to assist them in bringing a casino here."

Kane said Flaum has been a consultant for the Senecas for 12 years.

Also, see the Rochester Business Journal: Seneca Nation to work with Flaum on gaming, hospitality development here.

Press release:

Western Regional Off-Track Betting Corporation (WROTBC), owner/operator of Batavia Downs has pledged its support of the Upstate New York Gaming Economic Development Act and the referendum that will be put to the citizens of New York State in November.

“This legislation keeps Batavia Downs Gaming as a vital partner to state and local governments,” said Michael Kane, president and CEO of WROTBC and Batavia Downs Gaming. “This act will allow us to continue providing good paying jobs and generating significant funding for schools and our municipalities. Governor Cuomo and the legislature recognize the significant contributions made by racetrack casinos in Western New York to state education funding and job creation.”

Press release:

Batavia Downs Casino has closed the books on another record year, with a casino expansion starting in less than one month and the possibility of enhanced gaming on the horizon. The facility has enjoyed at least 4-percent growth every year since opening in 2005.

The 640 video lottery terminals at the track’s gaming parlor generated $45.1 million last year in net winnings, according to the NY Lottery. This figure is up 13.38 percent from 2011’s $39.78 million. Earnings in 2011 were 5.53 percent over what was earned in 2010.

“As one of the nine New York State Racetrack Casinos, we are giving back to the State of New York via our daily contributions to the New York State Lottery, and our distributions to our member municipalities,” said Michael Kane, CEO and president for Batavia Downs Casino.

Batavia Downs in owned and operated by Western Regional Off-Track Betting, a public benefit corporation. Municipalities that own Batavia Downs Casino include: the cities of Buffalo and Rochester, and the counties of Cattaraugus, Cayuga, Chautauqua, Erie, Genesee, Livingston, Monroe, Niagara, Orleans, Oswego, Schuyler, Seneca, Steuben, Wayne, and Wyoming.

“As a public benefit corporation, all revenues net expenses are distributed to the fifteen counties and two cities of Western New York,” said Ryan Hasenauer, director of marketing for Batavia Downs Casino. “People know that when they come here for entertainment, their money is going to New York State, either via the lottery for education or to the counties that they live and work in. We’re happy to give back.”

An attempt to fill a long-vacant executive position at Western Regional OTB with a Monroe County politician with some baggage is meeting resistance locally.

Genesee County's representative on the OTB board, Richard Siebert, told the Democrat & Chronicle that Monroe County officials are trying to make the appointment without going through proper procedures.

James Smith is a former deputy executive for Monroe County who was charged -- and later acquitted -- of misdemeanors related to alleged misuse of county workers for non-county work.

Smith's nomination is supported by Dennis Bassett, who is Rochester Mayor Robert Duffy’s appointee to the board.

According to Siebert, there's been no interview process and no other candidates considered.

One subcommittee vote was a tie, effectively killing Smith's application.

However, Bassett is now reportedly trying to bring a vote on Smith to the entire board.

A meeting with this single item on the agenda is scheduled for Oct. 11.

From the D&C:

Siebert said Smith supporters are trying to push the appointment through without advertising the job. Smith lacks gaming experience and, while Smith was acquitted of criminal charges, the accusations against him did raise questions about his managerial work, Siebert said.

“They’re ramming it down our throats,” Siebert said.

After 29 years of driving Western Regional Off-Track Betting, Martin Basinait is stepping down as CEO.

Basinait announced his retirement to the OTB board in a letter yesterday.

His legacy will be the revival of Batavia Downs. It was Basinait who convinced OTB to buy the vacility and bring back horseracing.

Dick Seibert said it was also Basinait who championed the addition of video lottery terminals.

"Horseracing is a declining industry and there's nothing you can do about it," Seibert told WBTA. "Without the VLTs, we would be facing a dismal future. We have a bright future now."

Basinait's resignation is effective in February 2011. The board will now begin the search for a new CEO.

In an audit of New York's five regional off-track betting operations, Comptroller Thomas DiNapoli warned that OTB wagering has dropped precipitously over the past five years, threatening the viability of the OTBs.

Western OTB comes off a little better in DiNapoli's audit, primarily because the gains in video slot operations are more than offsetting the declines in horse wagering (full Western OTB report (pdf)).

Western OTB Corporate and Branch Operations has experienced a 10-percent ($15.6 million) decline in net handle (total amount bet) over the past five years. And through May 2009, its net handle was down over $5 million compared to the same time the previous year. In addition, live racing and inter-track wagering at Batavia Downs were down 7.6 percent in 2008 from the prior year and have decreased 25 percent since 2005.

However, the corporation’s new video-gaming facility has generated additional revenue for the OTB. As a result, operating revenues increased to more than $21 million in 2008 compared to nearly $17.6 million in 2004, a 19-percent hike. These increases have significantly affected revenue distributions to local governments, which have grown from almost $3.9 million in 2004 to more than $4.9 million in 2008.

In the report on Western OTB, DiNapoli expresses concern that VTL gaming could level off or decline, depending on the economy or changing competitive issues.

The Buffalo News received a written response from OTB President Martin Basinait, who said WOTB is "somewhat more optimistic."

But he said a number of changes can be made in state law to make the OTBs more competitive, such as changing the formula by which revenues are shared with tracks.

Basinait noted other past warnings from the state comptroller's office, including a 2005 report that found the OTB did not properly plan for the possibility of failure of Batavia Downs and the casino. He said the success of the casino has shown it was "not due to happenstance."

Basinait said DiNapoli's red flags about the future economic health of the OTB's casino are "unwarranted."