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WROTB projects bigger windfall for counties in 2013

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Posted: Friday, December 14, 2012 12:00 am

BATAVIA — Cash-strapped counties can expect bigger checks from Western Regional Off-Track Betting Corp. next year.

The public-benefit corporation anticipates $400,000 more to share with the 15 counties and cities of Rochester and Buffalo – WROTB’s owners.

Western Regional owns Batavia Downs and the video gaming operation are projecting gaming profits to grow by 3 percent for the first eight months of 2013 and then 6 percent the final four months, when the gaming floor expands from 640 to 779 gaming machines.

Michael Kane, WROTB president and CEO, said the budget is conservative and the numbers could be bigger, resulting in more revenue for the municipalities.

WROTB projects it will distribute $2.4 million to municipalities for 2012 with nearly $1.9 million from mandatory surcharges at OTB parlors and EZ-Bets. WROTB has already distributed $527,379 in profits. The corporation would have more to give counties but needs to account for $975,000 for retirees’ health insurance.

The corporation is gearing up for a major expansion. The board of directors on Jan. 8 will meet to award construction bids that will likely top $20 million. That includes significant renovations to the first floor, turning that space into a flashy video gaming center with 779 slot-like machines, up from the current 640 that are on the second floor.

The project also will include a Thurman Thomas sports bar, a new restaurant, a full-service Tim Hortons, and other improvements, including a revamped façade and two-story front atrium.

The project is expected to boost gaming revenues, but WROTB isn’t budgeting for a big windfall. It has penciled in a 3 percent gain from gaming through August and then a 6 percent jump from September through December, when the expansion will be complete.

That will lead to an overall $900,000 projected profit, on top of $1.9 million in surcharges for a total of $2,831,571 to share with counties and the two cities. The video gaming is carrying the corporation, offsetting $1.5 million in losses in running 30 OTB branches and a $400,000 deficit with 72 racing dates.

WROTB would have more to give back to the municipalities, but the organization faces a $307,709 rise in retirement costs, from $1,996,758 to $2,304,467. Health insurance also is up 8.6 percent.

With some uncertainties in the future – the impact of potential full-scale casino expansions at seven sites in the state plus the impact on health care costs with “Obamacare,” – WROTB has decided not to extend employee contracts beyond one year.

The board of directors on Thursday agreed to one-year extensions with three groups of employees, with most workers not getting raises. However, the 320 OTB branch workers and 170 at the video gaming will all receive $100 bonuses. WROTB also will give the gaming employees bonuses for 2012 that are about 3.5 percent of their salaries. That was part of the one-year deal with no wage hikes.

“It gives our employees a vested interest in how well we’re doing,” Kane said.

The OTB branch workers won’t be getting the bigger bonuses. The branches, as a whole, have been a drag on WROTB finances.

The board approved 2 percent raises next year for 95 non-union employees in supervisory and management roles.

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