Oct. 7—Western Regional Off-Track Betting Corp. is now operating under a one-host-per-event policy for sports games, concerts and other events that are tied to its marketing program.
Of a longstanding controversy involving health insurance provided to OTB board directors at no cost, CEO and President Henry Wojtaszek said Thursday that OTB's attorney still contends the practice is allowable, despite rulings from both the state comptroller and state attorney general that say otherwise.
Wojtaszek addressed both topics one day after a closed-door meeting at Batavia Downs with Erie County Comptroller Kevin Hardwick and fiscal officers from seven other Western New York municipalities that have a stake in OTB operations. The meeting followed a series of letters Hardwick sent to Wojtaszek in recent weeks in an effort to get more detailed information about OTB operations, including handling of promotional tickets, health insurance for board members and the public benefit corporation's purchase of a hotel in July.
Wojtaszek said he thought the meeting, which was off limits to the public and the press, went "extremely well."
"They had some great questions. We provided some excellent answers. I think we cleared up a lot of misinformation."
"We certainly don't agree on everything, but I think we agree on a lot more than we did before," he added.
—-In a Thursday interview, Wojtaszek acknowledged — as was highlighted in an audit released last fall by the state Comptroller's Office — that OTB management "did not do a great job" of tracking tickets purchased with public money under a marketing program designed to encourage people to visit Batavia Downs casino and horse racing track.
State auditors found that at least $121,000 of public funds were used to buy tickets, food and beverages for OTB board members, employees and other associates. The audit examined OTB's marketing and promotional program from September 2017 to December 2019. The auditors recommended that OTB officials consult with legal counsel and / or the state gaming commission to determine who is allowed to receive tickets through the program and, if deemed necessary, seek reimbursement for ticket and concession costs incurred.
OTB recently agreed to extend suite agreements at Highmark Stadium for this season of Buffalo Bills football and at Blue Cross Arena for Rochester Americans hockey games as well as "various concerts" this season and next season. OTB has made similar suite arrangements for Sabres games and concerts at KeyBank Center in downtown Buffalo.
OTB officials say they have taken steps to address issues involving ticket distribution as identified in the audit.
Ryan Hasenauer, OTB's director of marketing, developed and adopted a written policy in November 2019 that took into account changes recommended by the comptroller's office to improve the monitoring of ticket distribution.
"A system was already in place that tracked the tickets," Hasenauer said. "The comptroller's office recommended a few minor changes to help more accurately account for the tickets. That recommendation was immediately adopted, well ahead of when the official report came out."
OTB officials have consistently held that it was necessary for representatives of the organization to attend games, concerts and other events as "hosts" to assist guests as needed.
Wojtaszek said Paul Moskal, a former FBI agent whose compliance firm was hired by OTB to assess weaknesses in the organization's management, recommended that only one representative attend OTB-sponsored events to serve as a host moving forward.
Wojtaszek said OTB will be more "diligent and vigilant" when it comes to tracking ticket distribution and suite attendance.
"Prior to 2019, we did not properly track the use of the tickets and, in fact, we believe there is a better way to handle it," Wojtaszek said.
Hasenauer said a mixture of office employees from various departments are considered hosts for games and events, and members of the finance, marketing, food and beverage, IT and OTB staff are all "taking turns" working games.
He added that while guests did use the OTB suite at Highmark Stadium for the Buffalo Bills home opener on Sept. 19, only one OTB staff member was there as the host. No member of the board of directors or other employees utilized tickets for the game, he said.
—-The attorney general and the state comptroller both previously issued opinions that OTB directors — who serve on the board that oversees the agency — are not entitled to receive health insurance as compensation for their service. A private attorney hired years ago by OTB arrived at a similar conclusion, recommending that the agency should discontinue the practice.
OTB's current attorney, noted Buffalo defense lawyer Terry Connors, has reviewed the matter and provided OTB with an assessment that suggests the practice is not barred by any of the previous rulings. Because Batavia Downs operates in a competitive gaming market, Wojtaszek contends that the health insurance perk helps OTB attract quality board directors.
Wojtaszek acknowledged that OTB is prepared to argue the legality of the insurance issue in court if the matter ends being the subject of a lawsuit.
"We believe that there's a very good faith argument to be made that the health care is appropriate," he said.
—-The Wednesday meeting with Hardwick and other county officials featured presentations by Moskal and Hasenauer as well as OTB's Chief Financial Officer Jackie Leach and Dave Hart, president of Hart Hotels, the private company that manages OTB's hotel at Batavia Downs.
In one of his letters to Wojtaszek earlier this year, Hardwick requested more detailed information about OTB's purchase of a hotel outside Batavia Downs. Hardwick noted that the original owners constructed the building for between $5 million and $5.5 million, yet OTB paid $7.5 million to acquire it, a price he described as a "considerable markup."
Wojtaszek said OTB had the property appraised by a private company, GAR Associates of Amherst, which valued the hotel at more than $8 million. Wojtaszek said he believes OTB got a "fair deal" for the property.
OTB has for years given away hotel rooms to Batavia Downs patrons as part of its promotional program. Wojtaszek said he viewed the hotel purchase as a sound investment that helps with overall operations.
"We felt it was a good marketing tool and it's turned out to be a very good marketing tool," he said. "We're turning a profit and we're turning an even larger profit than the company that held it before us."
Wojtaszek said the Wednesday meeting lasted about three hours. Asked why the session was closed to the public and the press, Wojtaszek said he wanted participants to be able to engage in an honest, robust and open discussion. The meeting did not involve enough members of OTB's board to constitute a quorum, which is the minimum number of representatives needed for a public body to be able to conduct formal business.
"We just wanted to be very direct and very open without turning it into a little bit of a media circus," Wojtaszek said.
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