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NEWS from the Office of the New York State Comptroller
Contact: Press Office 518-474-4015

DiNapoli Audit Finds Western Regional OTB Lacks Accountability and Gave Out Lucrative Perks

September 23, 2021

The Western Regional 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 individuals without the oversight required by state rules, according to an audit released today by New York State Comptroller Thomas P. DiNapoli. A second audit released found the OTB’s CEO did not reimburse the organization for his personal use of an official vehicle in a timely manner.

Both audits found lax oversight of operations by the board of directors, a troubling tone at the top of the organization for establishing and following the rules, and poor documentation. DiNapoli urged the OTB to seek reimbursement for tickets and other expenses that were inappropriately handed out.

“The Western Regional Off-Track Betting Corporation needs to clean up its operations,” DiNapoli said. “Revenues from the OTB are supposed to go to participating municipalities, not to give board members and employees generous perks and other benefits. The board said they are acting on our recommendations and I urge them to continue to tighten oversight and eliminate questionable spending.”

The OTB was formed in 1973 and is owned by 15 participating counties and the cities of Buffalo and Rochester. It offers off-track pari-mutuel wagering on horse racing at Batavia Downs Gaming and other locations. The revenues generated are distributed to the participating municipalities.

In the first audit, DiNapoli’s auditors examined the OTB’s marketing and promotional program from Sept. 2017 to Dec. 2019. The program included ticket giveaways for Buffalo Bills, Buffalo Sabres and Rochester Americans games, as well as area concerts. It is aimed at increasing OTB patronage and game play. The New York State Gaming Commission permits giving out free tickets but requires the OTB to submit an annual marketing plan identifying who may receive promotions and keep information on who received the complimentary items. During the audit period, the OTB spent nearly $1.3 million on leases for suites at sporting venues, concert tickets and food and beverages.

Auditors found that OTB officials did not keep accurate records of who received tickets and gave tickets and concessions worth at least $121,000 to board members, employees and other individuals. The average ticket costs, including the amount spent on concessions, was $221. Records showing who received the tickets were incomplete, making it difficult for auditors to determine the full extent of tickets given out.

Auditors identified specific instances when board members received tickets, but no business purpose was identified by OTB officials. Some examples (more instances are included in the audit):

  • For a hockey game on Nov. 23, 2018, the board chairman received six tickets and the vice president of operations received nine tickets. In addition, one of the OTB’s vendors received three tickets. The OTB had no record of who actually attended the game. However, the bill for concessions was $1,167, which included $177 in alcohol purchases.
  • For another hockey game on Dec. 29, 2018, the board chairman received four tickets, five tickets were given to another board member and five other tickets were recorded as given to “host.” Again, the OTB had no record of who actually attended the game. The bill for concessions was $1,443, which included $493 in alcohol purchases.

Auditors recommended that the OTB:

  • Develop and adopt a written policy and procedures for the distribution of tickets and who is eligible to get them.
  • Seek reimbursement for tickets and food and beverages if not appropriately given.
  • Define in the marketing plan what groups or categories of complimentary items, including tickets, will be given out as required by state regulations.
  • Develop a system to maintain a complete, detailed, and accurate record of tickets distributed.

The second audit, on oversight of vehicles assigned to employees from the period of Jan. 2016 to April 2020, found that the CEO did not track his personal use of his official vehicle and keep mileage logs, as all employees were required to do. He also did not pay the annual fee of $260 paid by other employees. He later reimbursed the OTB $3,484 after an internal auditor found that he was not following the OTB’s policy.

Key recommendations:

  • Ensure all employees assigned take-home vehicles complete and file accurate weekly mileage logs.
  • Require employees to reimburse the OTB for personal use in a timely manner.

The audit findings were shared with OTB officials. Their response and actions on the recommendations are included in the audit.

Audits
Western Regional Off-Track Betting Corp. – Marketing and Promotion
Western Regional Off-Track Betting Corp. – Oversight of Take-Home Vehicles


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